Newsweek’s take on financial reform – Financial Reform’s Big Unknowns
The legislation also omits the strongest safeguards against financial meltdowns: tougher capital requirements. Capital mainly represents the stake of shareholders in financial institutions; it provides a cushion against losses. Pre-Lehman, banks’ capital represented about 10 percent of their assets. Some experts would raise that as high as 15 percent. But the legislation leaves capital requirements to regulators, led by the Fed and Treasury. They are negotiating with other countries to set global standards. The outcome is unclear, and there’s a dilemma: Overly tough capital rules will discourage lending.
Still, the legislation seems on balance a plus. Though not eliminating the threat of future crises, “it makes them less likely,” says Litan. The “too big to fail” problem has been mitigated, if not entirely solved. During the crisis, the government faced an unsavory choice. Letting huge financial institutions fail threatened a chain reaction by inflicting losses on their trading partners. When Lehman went bankrupt, chaos followed. But rescuing large, ailing institutions could be highly costly for taxpayers, as the AIG bailout showed.
Under the congressional proposals, the government could shut down crucial financial institutions gradually and recoup the costs through taxes on other financial institutions.
I’m not so sure that larger capital requirements would rein in lending. Once everyone – starts to feel the economy is on firm footing and that feeling seems to be growing – banks and other lenders will feel more inclined to lend money. Lending money is after all how they make much of their revenue. Related to this story is a column by Republican’s favorite liemiester Frank Luntz at HuffPo – Why the Dodd Financial Services Bill Is Bad… For Democrats. If every unemployed American had a dime for every time a conservative went concern trolling they’d be a lot of rich unemployed Americans. And isn’t it ironic that a liberal site like HuffPo will give a soapbox to a known propagandist yet you’ll never see The Weakly Standard or the National Disgrace Review give a moderate Democrat a chance to be heard on their sites. Anyway Luntz is back to the same talking points he used when he had his hand up Senator Mitch McConnell’s(R-Ky) back; making large financial institutions pay into a fund will make those institutions just past those charges on to customers. So the logic goes: do away with air traffic controllers because helping jets avoid crashing into each other is just costing passengers more. Do away with requiring car insurance because without insurance people will drive safer. Or maybe having safe guards in place like air traffic controllers encourages people to feel safe and travel. Requiring insurance makes financial sense just in case a few folks don’t drive all that safe. Or requiring Wall St to bail itself out will protect tax payers and encourage these too big to fail financial institutions to be a little more cautious. Thus preventing yet another melt down. The kind of thinking that anticipates such behavior might be considered too logical or actual conservatism in practice, so will be lost on the Konservative Kool-Kids who call themselves Republicans. Wait Republicans do have their own plan – only, it does not have a rescue provision financed by Wall St. In other words it sucks or reeks of Luntzness, Wall Street Reform: Elizabeth Warren Challenges Republicans To Stand Up For Families
The Republicans’ counter-proposal, released this week, fails all four of Warren’s tests.
It calls for a council led by the heads of the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, and the Federal Reserve. They’d issue rules, supervise “our nation’s largest financial institutions, large non-bank mortgage originators, and other financial services providers who have violated the consumer protection statutes,” and enforce the rules.
Warren isn’t thrilled with the idea of allowing bank regulators — whose top priority is to ensure the profitability of the nation’s banks — to continue to oversee consumer protection, particularly when the OCC is involved.
“The problem with consumer protection is structure. Our current consumer regulatory process is designed to fail, and if we don’t fix it, it will fail again,” she said. “In every major dispute between customers and banks, the OCC entered the fray on the side of the banks. Clearly, banks — not their customers — were the OCC’s primary interest. The idea that the OCC would now be in a position to veto the new consumer agency is shameful.
As of January 2009, on the 15th I believe, Republicans suddenly rediscovered the 10th Amendment and state’s rights. Just as suddenly everything that passed by our elected representatives in the 2008 election cycle was unconstitutional or a commie plot. Now that there are plans to give states back the right to have even tougher banking regulation than the feds, Republicans claim that the states are not equipped to do that and it would be an unfair burden on their buddies at Goldman Sachs, Citibank and AIG. An autopsy of the average conservative will find a limp windsock in the part of the brain which interprets written texts. 2008, those were the days – Republican Legacy Of Squandering Taxpayer Money
I just want to make a confession. Not only is tea party leader Tom Tancredo correct, but the President’s devious plan seems to be working perfectly – Tea Party leader: Obama hides birth cert. to make us ‘nuts’
During an appearance on the radio show of Fox News’ Alan Colmes, prominent tea party leader Tom Tancredo made it clear he believes President Obama may not be an American citizen, Think Progress reported.
[ ]…Later in the interview, Tancredo suggested the Obama administration will not release the president’s birth certificate as a ploy to cast tea partiers in a negative light.
TANCREDO: Now they very well not want to show it because they want to propagate this whole thing that’s going on about birthers. … They may be doing it for that reason; I don’t know why they don’t want anyone to see it. … They want it propagated because you know –
COLMES: It makes your party look nuts!
TANCREDO: Yeah well maybe that’s why they don’t produce document, I don’t know.
Its like crazy Uncle Larry who kept yelling where’s my hat, where’s my hat, than looked in the mirror. That birth certificate may go down in history as one of the most well known documents ever. The certificate and the debunking of the foreign-born myth has been debunked to the point of inanity or nuttiness – as Tom, a descendant of Italian immigrants, proves. Anyone seen Tom’s birth certificate?
U.S. Budget History
Jan’01: Bush Becomes President
$850 billion SURPLUS
Nov’04: Bush Re-Elected
$415 billion DEFICIT
Jan’09: Obama Becomes Pres.
$1.2 trillion DEFICIT
Republican Debt Legacy
Ronald Reagan (1981-1989)
Started: $1.6 trillion debt
Finished: $3.0 trillion debt
George H.W. Bush (1989-1993)
Started: $3.0 trillion debt
Finished: $4.3 trillion debt
George W. Bush (2001-2009)
Started: $5.8 trillion debt
Finished: $10.8 trillion debt