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Regulations: Apparently believing the best defense is a good offense, the president wasted no time after his jarring loss on medical overhaul in upping the ante on another of his signature issues — financial change.
Just as Speaker Nancy Pelosi confessed Thursday she lacked the votes to quickly move the Senate's sweeping health care bill through the House — foreclosing one way to keep hope alive on socialized medicine — President Obama approached the lectern at the Executive Office Building to drop a bombshell of his own. Training his sights back on Wall Street, he called for tougher regulations that would limit the size of banks and their ability to engage in propriety trading.
The president last year proposed a series of measures to tighten the reins on financial institutions, and the House passed a bill last month. His announcement Thursday broadens those measures, particularly by endorsing a proposal by ex-Fed Chairman Paul Volcker to restrict proprietary trading by commercial banks.
Such a limit would separate commercial banks from investment banks, a line that was blurred a decade ago by the repeal of the 1930s Depression-era Glass-Steagall Act. Without such regulations, Obama said, the financial system will continue to operate under the same rules that led to its near collapse.
But Wall Street didn't cause the collapse — government did . And this call for tougher rules is yet another attempt to escape blame. All Glass-Steagall did was let bank holding companies buy into investment banks. What undermined the financial system was a fanatical application of rules aimed at getting banks to lend as much money as possible to facilitate homeownership among minorities.
It was the government, not Wall Street, that created the subprime market by compelling banks to make bad loans and urging Fannie Mae and Freddie Mac to cash out the banks by putting more and more of the toxic mortgages on their balance sheets.
The administration apparently hasn't given a thought to limiting, let alone blocking the proposed expansion of, the Community Reinvestment Act that started it all. Or to reining in Fannie Mae and Freddie Mac, the government-created monsters that aided and abetted the meltdown.
No, the Obama administration is back on its quest to take control of as much of the private economy as it can. Polls must be telling the White House that kicking "Wall Street" still plays well in Peoria, even if the nationalization of health care does not. (It sure didn't play on Wall Street, with the Dow off 335 in two days.)
In Plato's ideal society, philosopher-kings and elite Guardians shepherded the rabble to force them to do the "right" thing. To prevent the unwashed from doing anything stupid, the all-powerful, all-wise Guardians often had to tell a few "noble" lies. And, of course, these caretakers themselves ...
Campaign Finance: Five justices ruled Thursday that corporations and labor unions can donate directly to political activities. At least someone in Washington is trying to protect free speech. Lawmakers have been strangling constitutionally secured political speech for years. In 1990, the ...
Competition: For the past year, Democrats have used the "European model" as their template for change in the U.S. A new report on productivity shows why that might not be such a hot idea. The Conference Board reports that U.S. productivity rose 2.5% last year, thanks in large part to fewer ...
Visitors to national parks are warned not to feed the wildlife because this interferes with the natural survival ability of the animals. Progressives do not make the same connection with human nature. The image of a country where government takes care of its citizens attracts the liberal mind. This ...
It was a rubbing-the-eyes-in-disbelief headline even from an administration whose energy secretary, Steven Chu, suggested that America's energy dilemma could be solved by painting roofs white, and whose interior secretary, Ken Salazar, talked of garnering 3,000 megawatts of wind-power capacity off ...
Every time OhBummer opens his yap to lecture us on this or that "enemy of the people," I reach for my roll of duct tape and I fondle it. How and when can I lay some strips of it across his mouth?
The last three presidents, Congress and Wall Street are equally responsible for the subprime mortgage crisis and recession. Most Democratic and many Republican politicians viewed the subprime mortgage market as a way to gain political support from minorities, while creating a booming economy. Federal regulators were called off and lenders who did not make enough subprime home loans were threatened with federal antidiscrimination lawsuits. Wall Streeters quickly saw the opportunity to turn bad loans into supposed "risk free" securities. The money to finance this swindle came from federal borrowing. Any financial failure was backed by guarantees from Fannie Mae and Freddie Mac. The two GSEs were in turn financially backed by the U.S. Treasury (that's us!). I agree that commercial and investment banking should be separated and monstrosities like Goldman Sachs should be broken up under anti-trust laws. Further, the U.S. Constitution should be amended to prohibit any public corporation (profit or non-profit) or union from paying or gifting to any federally elected official. Lastly, the Constitution should be amended to allow for voter recalls of federal representatives and senators--like Representative Barney Frank and Senators Charles Schumer and Chris Dodd, who have lined their own pockets with corporate and union "donations".
"But Wall Street didn't cause the collapse "” government did . And this call for tougher rules is yet another attempt to escape blame. All Glass-Steagall did was let bank holding companies buy into investment banks. " Rubbish. Wall Street was just as culpable as government in promoting risky lending. The repeal of Glass Steagall permitted investment banks to enter the retail mortgage market and they did so in a huge way.
I personally think it should be a leverage issue. The larger they are then the reserve requirements should be incrementally higher.
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One dangerous sell signal is when a stock slices through a key support level, such as the 10-week or 50-day moving average, on heavy volume.
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