Deregulation of the finance industry got us into our current mess. The time to impose new regs was over six months ago. The job can't be done now, because the teabaggers have successfully brainwashed a large section of the American populace into accepting the absurd "Obama the socialist" meme. Give the Republicans credit: They can't govern, but they sure know how to fight the meme wars.
Now, Treasury Secretary Geithner is talking about reforming the financial industry. The FDIC has a scheme of its own. Alas, as in the health care debate, the proposed reforms are worse than doing nothing.
Unfortunately, both plans are lousy, says William K. Black, professor at the University of Missouri Kansas City School of Law.Call it socialism for the rich. Call it Antisocialism. Call it WorstImaginableSituationism. Call it what you will. What it comes down to is this: Financial institutions with a record of lying, cheating, and wheeling-n-dealing will now be allowed to do so with a guarantee that taxpayers will pick up the tab whenever things go wrong.
A former regulator who helped resolve the Savings and Loan crisis in the 1980s, Black says the current reform plans take a terrible doctrine--Too Big To Fail--and write it into law.
Professor Black says Tim Geithner's plan includes a secret list of institutions that are too big to fail and that will always be bailed out no matter what.
An endless supply of free money for big bankers! Wheeeeeee!!
Here is a perfect example of the kind of fiendish behavior that Geithner wants to give eternal legal protection.
What should we do? Let's go back to Black:
A far better answer, Black says, is eliminating "Too Big To Fail" by seizing troubled financial institutions and restructuring them--the same thing the FDIC does with bankrupt banks. Contrary to the fears of the administration, this will not bring the system to its knees: It will resolve the problem quickly and cleanly, with no cost to the taxpayer.In other words, nationalize the "too big to fail" banks. Buy 'em. Take 'em. Clean 'em up. If need be, wipe 'em out. And fire (or jail) the fiends who packaged crap mortgages as Triple-A investment instruments.
That's what Paul Krugman recommended roughly a year ago. That's what a lot of smart people screamed for. At one time, the public would have applauded that move. We could have pursued that course of action in January, February, March...
...but I doubt that we could do it now. Obama blocked the idea, back when it was on the table. Now it's too late for him to change his mind, because the political winds have shifted and the public has reverted to its "Laissez faire solves all evils" default position.
Could Obama have made a worse mess? He had a historic opportunity and he blew it.
9 comments:
We should add no more regulation until we fix the problem with existing regulation, which has been captured by the banking industry. Until that problem is fixed, adding more regulation is pointless. Just look at how useless the SEC has been.
Nationalization is not the answer. Assuming it means gov taking control of the bank. You think the gov can do any better? The solution is for the bank to fail and settle in bankruptcy.
But I agree, Obama blew it!
"Nationalization is not the answer. Assuming it means gov taking control of the bank. You think the gov can do any better?"
You bet. FDIC does it all the time. The Resolution Trust Company managed the S&L debacle rather well.
It may take pressure on a local level by desperate people to get local government to stand up to the national banks in their own community.
Why are we allowing the banks to bury people with stupid credit card interest rate charges on OLD, EXISTING credit card debt.
Anybody who can pay down their credit card debts should be incentivized to do it as fast as can be done. That is how to stabilize and begin to heal our economy.
It was never Obama's aim to fix it!
He's here to ring in the Millennium for the New World Order or more appropriately for the New Age Movement.
If Obama, Pelosi, Reid, Dean, Kerry, and the other assorted bad actors that make up the New and Improved Democrat party are letting Wall Street Banksters run amok it isn't because they blew it. They are doing exactly what those people paid them to do, block reform until there is nothing left to loot.
I,m sure republican heads are spinning, trying to figure how they were elbowed aside from the moneyed special interests gravy trough.
The New World Order is a right-wing myth -- a John Birch meme. (And don't you DARE quote that stupid GHW Bush speech. He was referring to something else entirely. I've dealt with this many, many times.)
The New Age movement? Ridiculous. There is nothing "New Age" about Obama. In fact, the New Age thing often serves as a way to spread far-right fringe political ideas. The first time I ever saw the Protocols of Zion in print, it was in a New Age bookstore.
Stop chasing myths. Goldman Sachs is something REAL.
Yesterday I interacted with a 10-yr-old black boy (in an interview situation.) When asked who or what in effect ‘set up laws’, ‘made the rules’, ‘had the power to command the police’ he answered Obama (this is in Switzerland.) He was very moved, his eyes misted over. Obama, he added, was his hero, just to make his thinking crystal clear.
I warned ppl in this part of Europe about Obama. Nothing doing, of course. And they still love him - Republican oppo’ is seen as vicious, misguided, insane, etc. and part of the usual mess of US politics. He is the PRESIDENT and he will prevail. Quite. It is sadly abundantly clear that ‘we here’ don’t care about what happens to the ‘American people’ - they voted excellently, it is all very admirable, now they should get on with it.
The larger implications are not grasped, by the ‘public’ whatever that is, even in Switz. where the news each day has detailed articles about banking, insurance, UBS, Goldman, etc. and anti-US sentiment (because of the attack on Swiss banks - passport, visa shenanigans - new international accords - not to mention Iraqi refugees, *wars*, Palestine...) runs extremely high. Somehow, the two strands of opinion never meet!
Obama has not blown it. He is, within such a pov, or at least its caricature as presented here, simply a cool media figure; a paste cut-out who is to be respected, liked, even adulated. But not a person of power, divorced from it in fact. (Notwithstanding the posturing about ‘now like he is Prez he can do good stuff.’)
This attitude signals acceptance ...of I don’t quite know what. Bizarre and worrying.
Ana
Its not too late to nationalise them. Just make them outline their own breakup - the living will. Then wait. The CRE bust will take 'em down for you.
Bear in mind some of these banks got scr*wed by government. Think of Wells Fargo. They didnt have to buy Wachovia. Some idiot in government told them too. They were stupid enough to listen. Now they are scr*wed too.
The only just solution is nationalisation. Before its too late. You still have time.
Harry
We're not going to apologize. Obama won, with a few hurt feelings but he put the party together and won. Hillary (who is obviously a centrist anyway, would you really have expected radical change from her?) is part of his administration. I have criticized Obama. I do not approve of everthing any Obama supporter has ever said or done. But no apologies here. Sorry.
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