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Obama's financial reform a bust
Key Excerpts from Article on Website of New York Times
Posted: June 23rd, 2009
http://www.nytimes.com/2009/06/18/business/18nocera.html
Three quarters of a century ago, President Franklin Roosevelt earned the undying enmity of Wall Street when he used his enormous popularity to push through a series of radical regulatory reforms that completely changed the norms of the financial industry. Wall Street hated the reforms, of course, but Roosevelt didnt care. Wall Street and the financial industry had engaged in practices they shouldnt have, and had helped lead the country into the Great Depression. Those practices had to be stopped. To the president, thats all that mattered. On Wednesday, President Obama unveiled what he described as a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression. In terms of the sheer number of proposals, outlined in an 88-page document the administration released on Tuesday, that is undoubtedly true. But in terms of the scope and breadth of the Obama plan and more important, in terms of its overall effect on Wall Streets modus operandi its not even close to what Roosevelt accomplished during the Great Depression. Rather, the Obama plan is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam rather than rebuild the dam itself. Everywhere you look in the plan, you see the same thing: additional regulation on the margin, but nothing that amounts to a true overhaul. The plan places enormous trust in the judgment of the Federal Reserve trust that critics say has not really been borne out by its actions during the Internet and housing bubbles. Firms will have to put up a little more capital, and deal with a little more oversight, but once the financial crisis is over, it will, in all likelihood, be back to business as usual.
Note: To watch the Inspector General of the Federal Reserve testify to Congress that she knows pracitcally nothing of trillions of dollars that are unaccounted for, click here. For many revealing reports from reliable sources on the hidden realities of the continuing taxpayer bailout of the biggest financial corporations, click here.
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