Geithner Pushes for Tighter Bank Regulation, Cheney Shrugs Off Responsibility

This would seem to signal the administration is listening to criticism of it being too timid in how it deals with those institutions receiving any bail-out funds. Whether that criticism was warranted or not, we’re an appearances obsessed culture that tends to want things done yesterday, U.S. to Toughen Finance Rules

The principles include giving the Federal Reserve new powers that include authority to monitor and address broad risks across the economy, say people familiar with the matter. The proposals are expected to include tougher capital requirements for big banks and authority for regulators to take over a large financial firm that is failing.
Proposed Changes

Treasury Secretary Timothy Geithner will soon outline proposed changes in financial regulation. They are expected to include:

* An enhanced role for the Federal Reserve to monitor and address broad economic risks.
* Changes to the way banks are overseen to prevent lenders from shopping among regulators for the easiest supervision.
* More transparency and stricter rules for the way money flows between banks.
* Tougher capital requirements for big banks.
* Consolidation of consumer-protection enforcement.

Its also good to see Geithner being front man on some of these moves. From my experience the Treasury Secretary seems like one of those really bright guys that is not prone to making false or inflated promises. Looking back at the history of Lawrence Summers (head of the White House’s National Economic Council), who would the average American go to for economic advice – espeically in the realm of Wall Str regulation, Geithner or Summers.

Stuff Happens

Cheney’s “Stuff Happens” Defense of Republican Failure – a must read on the history of the Bush/Cheney concept of responsibility and their history of abject failure to protect America in the months leading up to 9-11. One of the many links that Perrspectives supplies is this reminder of how Mr. Stuff Happens views the world, Bush Administration’s First Memo  on al-Qaeda Declassified

In a series of recent public statements, Secretary of State Condoleezza Rice has again denied that the Clinton administration presented the incoming administration of President George W. Bush with a “comprehensive strategy” against al-Qaeda. Rice’s denials were prompted by a September 22 Fox News interview with Bill Clinton in which the former president asserted that he had “left a comprehensive anti-terror strategy” with the incoming Bush administration in January 2001. In a September 25 interview, Rice told the New York Post, “We were not left a comprehensive strategy to fight al-Qaida,” adding that, “Nobody organized this country or the international community to fight the terrorist threat that was upon us until 9/11.”

The crux of the issue is a January 25, 2001, memo on al-Qaeda from counterterrorism coordinator Richard Clarke to National Security Adviser Condoleezza Rice, the first terrorism strategy paper of the Bush administration. The document was central to the debate over pre-9/11 Bush administration policy on terrorism and figured prominently in the 9/11 hearings held in 2004. A declassified copy of the Clarke memo was first posted on the Web by the National Security Archive in February 2005.

Clarke’s memo, described below, “urgently” requested a high-level National Security Council review on al-Qaeda and included two attachments: a declassified December 2000 “Strategy for Eliminating the Threat from the Jihadist Networks of al-Qida: Status and Prospects” and the September 1998 “Pol-Mil Plan for al-Qida,” the so-called Delenda Plan, which remains classified.

One of the things that struck me about Cheney’s recent assertions is that casual attitude, when for seven plus years, Cheney and far Right surrogates tried to blame Bill Clinton for everything from 9-11 to thier horrible economic record. That in mind it is not remarkable at all that the unhinged Right is trying to blame President Obama for their failures. Stuff does indeed happen. People are frequently victims to events out of their control. But there is a Goldilocks rule when it comes to responsibility – one tries to handle as much as they can, and be as proactive as possible – law breaking would not count as proactive. BushCo and the Right never understood that, they continue to be all extremes.

Blue City Skyline wallpaper

Blue City Skyline wallpaper

MahaBlog is recommending an article from the current print edition of Harpers called Infinite Debt by Thomas Geoghegan ,

What is history, really, but a turf war between manufacturing, labor and the banks? In the United States, we shrank manufacturing. We got rid of labor. Now it’s just the banks.

Which is why the middle class is shrinking. Basically, we’re all waiters now; we’re bowing and scraping and working for the banks.

There is more at the link, but I was hoping to find a larger snip at the on-line edition. I came up empty, but did find this article, Americans Unwilling to Face Reality – which echoes some related sentiments.

It’s not as though no one saw it coming. Here’s the economist Michael Hudson, writing in the May 2006 issue of Harper’s Magazine: “The reality is that, although home ownership may be a wise choice for many people, this particular real-estate bubble has been carefully engineered to lure home buyers into circumstances detrimental to their own best interests…. The bubble will burst, and when it does, the people who thought they would be living the easy life of a landlord will soon find that what they really signed up for was the hard servitude of debt serfdom.”

Other commentators, including Warren Buffet, said similar things about the derivatives market. He was prescient, but hardly anybody listened. Americans, perhaps even more than other people, have difficulty embracing the concept of “reality.”

The part of derivatives trading in the financial sector and its part in the housing/financial crisis should have become the moon orbits the earth matter of fact by now. No. Just this weekend, a nice guy that sounded like he could be one of relatives called in to C-Span to declare that poor people are to blame for buying houses they could not afford. Certainly over the last quarter century many Americans that would have been better off renting, bought that white picket fence fantasy, they were hardly to blame for trashing the economy. Its like a puzzle where the Right is forcing some pieces into place that are not remotely related to reality. Everyone from O’Reilly to Malkin to Limbaugh are saying the total aggregate buying power of the lowest income Americans has been the pillars on which the entire economy rest.

CNN’s John King did not challenge Cheney’s false claim that “chairmen” Frank, Dodd were “stone wall” to Fannie/Freddie reform

On CNN’s State of the Union, host John King did not challenge former Vice President Dick Cheney’s false claim that the Bush administration tried “to impose reforms on Fannie Mae and Freddie Mac, and we ran into a stone wall on Capitol Hill in the form of the chairmen and — of the Banking Committee in the House and the Senate, Barney Frank and Chris Dodd.” In fact, Frank and Dodd were not “chairmen” until 2007, after which time Congress passed oversight legislation of Fannie and Freddie.

Poor people destroyed the economy is only part of the myth the Right continues to regurgitate. They had help from Frank and Dodd. In other ironic news, the Right’s ‘tea parties’ in conjunction with the bonus fiasco at AIG  may provide the political prod needed for the Obama administration to partly national AIG and a few banks. Doing so will leave the Right with one less major talking point in their late to the party concern about fiscal responsibility. Plus Obama could claim that he started the nationalization partly out of concerns from Conservatives.