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Obama fulfills his promise to fix the causes of recession!





ocalhoun
http://www.ft.com/cms/s/0/44f593ee-06a7-11df-b426-00144feabdc0.html?nclick_check=1
Yay! Obama is finally fulfilling the promise he made when he got the stimulus bill passed:
To regulate the banking industry, and fix what caused the recession.
Better late than never!

Quote:

The global banking industry was thrown into turmoil on Thursday after President Barack Obama , responding to public rage over the financial crisis, proposed the most far-reaching overhaul of Wall Street since the 1930s.

[...]

The measures, which require congressional approval, hark back to the response to the 1929 stock market crash that ushered in the Glass-Steagall Act, separating commercial and investment banking, which remained in law until 1999.

Perhaps he'll even reinstate those depression-era reforms (which should never have been repealed in the first place).
Quote:

In reforms that could force the restructuring of some of the biggest names in US finance, including JPMorgan Chase and Goldman Sachs, Mr Obama promised that "never again will the American taxpayer be held hostage by a bank that is too big to fail".

[...]

Mr Obama called for new rules beyond current regulations restricting banks from holding no more than 10 per cent of US deposits that would place unspecified size limits on institutions.

Has he been reading my posts on Frihost?
He's following my recommendations about this exactly!
(Now, if he'd only extend the anti-'too big to fail' laws to all industries, we could eliminate the 'need' for bailouts and government takeovers.)
Quote:

Congressional aides and administration officials said a lot of detail remained to be decided. Barney Frank, chairman of the House financial services committee, said he would support new rules if they allowed banks to dispose of newly banned operations over three to five years and thereby prevent a "fire sale".

Very reasonable; large changes have to be given time to complete, or they will cause chaos.


Now that's change I can believe in. ^.^
AftershockVibe
Well to be fair he hasn't managed to get any bill passed yet - fulfilled is a strong word. As always, it is sensible to see what actually becomes of this plan in order to get it through. Like all proposals - it will be a watered down plan that makes it into law (assuming it gets passed at all). The question is how diluted it will be.
ocalhoun
AftershockVibe wrote:
- fulfilled is a strong word. As always, it is sensible to see what actually becomes of this plan in order to get it through.

True, it will probably be watered down... but at least he's trying. For a (long) while, I thought he was only promising legislative reform to get the stimulus bill passed, and once it passed, just forgot about it.
deanhills
@Ocalhoun. I thought you were against regulation? Wink I find Obama's moves very hypocritical, or should I rather not make this about Obama, but just people in political office trying to fix a situation that should never have happened. Remember at one time the big banks were not big, but they only became big when existing regulations were fiddled around with during the eighties? There was a time when banks were not supposed to mingle their business with investments. What happened in September 2008 was a consequence of allowing the Banks to grow too big, and that was also the time when they probably should have been forced to divest themselves of the securities industry and split themselves up again. Instead Obama helped them to protect their business interests and allowed the dedicated securities companies to fail?

Regulations are probably just going to complicate the whole issue. Perhaps focus should be more in creating banks that are close to the communities along the lines of building societies of the seventies and eighties and to keep stocks and shares and investment instruments, as well as insurance separate from the main lines of banking. There is too much mingling of banking business, investments, property financing etc, making the business everything but transparent and very difficult to make them accountable. The reforms should be fundamental ones, rather than just regulations, as regulations would just turn into a mish mash of band-aid strips requiring a multitude of forms that have to be completed by everyone. And making it even more murkier than it is at present.
ocalhoun
deanhills wrote:
@Ocalhoun. I thought you were against regulation? Wink

Against over-regulation; I'm not an anarchist.

In this particular case, regulation is a necessary evil, because financial institutions show a definite tendency to ruin the economy any time legislation is too relaxed.
deanhills
ocalhoun wrote:
deanhills wrote:
@Ocalhoun. I thought you were against regulation? Wink

Against over-regulation; I'm not an anarchist.

In this particular case, regulation is a necessary evil, because financial institutions show a definite tendency to ruin the economy any time legislation is too relaxed.
Completely agreed. Except if we are going to get Government to do the job of regulating, they will no doubt move in the direction of over-regulation. It has to be something where all regulations regarding Banking get scrapped and they start from scratch, and preferably that those architects who get to design the new regulations will be impartial experts rather than your familiar faces. Everything I have seen over the last few years to do with the economy and rules and regulations have always been biased and self-serving, the rich looking after the rich, and the Government looking after the rich who are looking after the Government - plutocracy.
ocalhoun
deanhills wrote:
Everything I have seen over the last few years to do with the economy and rules and regulations have always been biased and self-serving, the rich looking after the rich, and the Government looking after the rich who are looking after the Government - plutocracy.


That would be the separate -- and much more important -- issue of corruption and outright bribes called campaign contributions.
Fix that and many of the nation's problems would slowly disappear.
deanhills
ocalhoun wrote:
That would be the separate -- and much more important -- issue of corruption and outright bribes called campaign contributions.
Fix that and many of the nation's problems would slowly disappear.
I wonder how it can be fixed however, as there is not a very clear definition of exactly what bribery and campaign contributions really are about? Sort of enmeshed with the culture. For example as an outsider I was totally shocked with the Nebraska deal when the Senate was voting on the Health Care Reform Bill. I saw it as a bribe, but the majority of people from the US saw it as a deal. What I am trying to say here is that maybe bribes have become so entrenched, will be interesting to see what they will be reforming if they are given the brief to reform bribes. Also what they will be reforming if they are given the brief to reform campaign contributions?
ocalhoun
deanhills wrote:
I wonder how it can be fixed however, as there is not a very clear definition of exactly what bribery and campaign contributions really are about?

How about "Oh, I'm sorry candidate Smithson, it looks like the money to pay for the plane tickets you accepted on the 14th originated from a business. Unfortunately, that makes you ineligible to hold any government office for 2 years. Do be more careful next time."

Extreme, yes, but something must be done to fix the worst problem the country has before very much meaningful improvement can happen anywhere else.
deanhills
ocalhoun wrote:
Extreme, yes, but something must be done to fix the worst problem the country has before very much meaningful improvement can happen anywhere else.
I was trying to say that bribery has become so entrenched in the political system, that people may not recognize it as such, they see it as deal-making. But totally agreed, something really needs to be done about it.
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