Obama: More regulation for finance industry
Obama gave a speech on economics today that, of course, addresses the subprime mess.
The Atlantic/Ambinder: Obama today targeted the regulatory policies of George W. Bush and Bill Clinton. He implied that the Clinton administration was complicit in deregulating the economy to such a degree that it laid the groundwork for the subprime mortgage crisis.
“Under Republican and Democratic Administrations, we failed to guard against practices that all too often rewarded financial manipulation instead of productivity and sound business practices,” he said. He blamed a “$300 million lobbying effort” for hoodwinking Washington.
Obama was referring to the repeal of the New Deal’s Glass Stegal regs on banks by the Graham-Leach-Billey bill of 1999, which allowed financial institutions to merge without updating the regulatory framework.
Obama economics adviser Daniel Tarullo said that Obama opposes a resinstatement of Glass-Stegal but wants the regulatory apparatus to catch up. Obama said that banks ought to be required to increase their liquidity and capital requirements. He did not say by how much. He laid out six principles he said will guide him as president.
One — “First, if you can borrow from the government, you should be subject to government oversight and supervision.”
Two — better regulation of financial markets at home
Three — better regulation of worldwide interconnections between markets
Four — reducing duplicaton among regulatory bodies
Five — crack down on illegal trading activity
Six — more monitoring of systemic risks to the financial system.
Well, finally SOMEONE recognizes that we are in the worst economic environment of our lives, past or future.
Someone finally has stopped wasting time on silly things like race and faced up to the fact that the global financial system is very rapidly melting down.
Adult leadership at last!
.
How can we raise the reserve requirement when banks do not have the assets to cover the current requirements?
FROM POLITICO
Obama blames ‘ethic of greed’ for economy
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Didn’t Hillary basically lay out the same plans a day or two before?
Just what the world needs…more regulation. Typical lib response to a problem.
The problem is the government put tax payers on the hook for the loans via Freddie Mac, Fannie Mae……… We also guarantee depositors and re-insurance companies.
The issue is simple if someone lends money and both parties agree with full disclosure we should let the market dictate terms and price. Yet if lawmakers use tax payers to guarantee part of the deal we should stop the practice or have tight regulation.
I am all for deregulation but not at tax payers’ expense.
The problem is a catch 22 if we do nothing the tax payers will end up with the bill via the guarantee. And by doing something it will cost us all money.
The real issue is the something for nothing attitude that permeates via Washington and voters.
Why not ask the lawmakers on the banking commission why they would put tax payer money at risk via guaranteeing loans and not look at the ability to pay?
No matter what party you are in, most of you will give your lawmaker a pass and than complain about the other side while paying the bill.
JohnKonop: That was much too thoughtful a comment for this crew.
bb’s understanding of this issue is limited to: “regulation bad” (using a Frankenstein voice).
Aubrey and bb. You guys should be on the Visa commercial, because your ignorance is priceless.
We are currently bailing out unregulated investment firms. We are bailing them out because there were no rules by which they were required to play in order to be eligible for a taxpayer bailout.
Rather than protect the public interest (taxpayer $$$), you would rather scoff at those who have had enough of welfare for the rich.
Your true colors are showing… comrade. Your masters have trained you well, but educated you poorly.
I would rather that no one was bailed out. Why should they be? The market economy takes care of itself and part of the purge is getting rid of those corporations that don’t play the game right. Just like the stupid “stimulus package,” no interference is needed, especially from MY tax money.
Interesting how you call me “comrade,” but you scoff through insinuation (”welfare for the rich”). Would you have a job is some rich guy, with a bunch of ambition, didn’t start a firm some time ago? Talk about priceless ignorance. You hate the idea of rich people, but refuse to understand that without them everyone’s standard of living would be very much like your beloved Soviet Union’s failed socialistic experiment.
Aubrey
What part of my last comment (6) did you not understand?
Aubrey – I don’t have a job because some rich guy was ambitious. And the market is still a collection of human beings making decisions on where to put their money…so unless human beings became perfect somewhere along the line, this gospel of yours is worth rethinking.
When you get rid of Bear Sterns without another bank taking over their portfolio, then suddenly everything Bear has underwritten, and the derivatives transactions they’ve facilitated (like the credit swaps w/ book values of $100 million plus) go into default, taking the pensions of millions down with it.
An orthodoxy as simple as what you’re laying out here is no-doubt the Joe Six Pack perspective, but we’re not talking about the last episode of 24 or how much of a pussy Jeff Gordon really is…
You would rather that no one was bailed out…I’d rather you stuck to pontificating on subjects you actually know something about…whatever those are.
How to clean an M-16 perhaps.
I just came by to make sure you’d be ready to send that money over to Konop or whoever said they’d hold it…now that I think of it, it could be that you’re holding the money and not the person I bet with…either way, I’ve read enough nonsense in this thread to last me for the rest of the year.
My end is ready to be mailed, so after I search the history and figure out who it was that staked their hopes on McCain, I’ll post a reminder so we can get this done.
“You hate the idea of rich people”
No, I like money. And I would like to have lots of it.
However, when rich (or poor people) make horrible investment decisions I am quite happy to let them suffer the consequences (which generally aren’t life-threatening). I’m comfortable with the well-known concept of risk/reward. I’m not at all impressed with the “get-rich-quick” mentality that’s pervasive on Wall St. these days.
“Just like the stupid “stimulus package,” no interference is needed, especially from MY tax money.”
No interference is needed, but your team is serving it up regardless. You should be outraged by this; I am outraged at politicians who want to indebt my daughter to pay for the mistakes of ignorant “rich” investors.
Also, rich folk wouldn’t be rich without the government and the working class. They are not the saviors of the working class.
Al
Nice to hear from you!