Monday, May 3, 2010
Still Time To Get It Right
The GOP and Financial Reform
I’ve noted that I would prefer better financial regulators to additional financial regulation. But, that is a mug’s game.
Nothing, short of a constant dynamic leadership at every single agency, a major upgrade in talent, and an unending green light for their actions from the President, the Congress, and the Justice Department, will suddenly make a ton of career bureaucrats and professional regulators much better than they have been, whether I/we like it or not.
With that as an obvious backdrop, therefore, I come down on more regulation, covering new and different areas, in hope that even these blind agency squirrels can find a nut once in a while.
So, “yes” to better consumer regulation on mortgage products, originators, and financial institutions; “yes” to more transparency in the wonderful world of derivatives, and complex deals which can have the same investment banking houses on both sides of a trade, and “yes” to greater regulation of “too Big to Fail” financial institutions and large banks. And. definitely “yes” to those same institutions paying for future bailouts, up front, GOP objections or not.
How can the Republicans hide behind the flimsy argument that they don’t want Washington to regulate the very people and very instruments which caused the financial excesses of the big guys to bankrupt so many other institutions and people? The surviving financial services behemoths still came out of it with record 2010 first quarter earnings because their “Uncle” bailed them out and required so very little of them in return.
Those are our tax dollars earning rave reviews when first quarter financial earnings were announced by Street firms and large banks.
Tea Party, Tea Baggers, Teetotalers, who the hell cares? The abuse the gargantuan financial institutions carried out early in this decade and what they have done since they did it should leave them very few political protectors. But no, the kneejerk GOP reaction is to oppose meaningful reform and to protect the banks and investment banks, as if they were blameless had no hand in bringing on a worldwide financial calamity and an international Depression.
So, arm the current financial regulators with new tools, do away with one or two extraneous ones, and let’s get on with curbing some of the excesses that the GOP claims foolishly are necessary for effective modern commerce.
Strengthen the negotiating hands of Barney Frank, Chris Dodd, Tim Geithner and I urge them to show the same quarter to Wall Street as the financial firms displayed responsibility and caution in 2006 through 2008—meaning very little.
The banks have fistfuls of money, no real demands on their lending activities, and still are whining about a “consumer regulatory agency.” What’s that all about, besides same-o, same-o?
No matter what the Congress ultimately does regarding financial regulatory reform, the big institutions will survive and find a way to continue to make money. It’s what they do.
(Historical footnote. Where to put a new consumer protection agency seems to be a major issue facing Congress? I worked at the Fed in the early 1980’s, when Paul Volcker was the Chairman. The central bank had a major “consumer affairs” department, but it did not feature the top agency talent (they were posted on monetary policy or supervision and regulations matters) and while everyone paid lip service to consumer matters, it wasn’t a unit or cause that moved mountains. I can’t imagine much has changed at 20th and C Streets in that regard.)
Bombs in Manhattan
Just a feeling. By the time this blog is out, likely on Tuesday, I expect that the New York police and federal authorities will have a strong lead on the identity of the man who left the explosive devices in a car in Times Square or he will have done away with himself, with an appropriate scolding suicide note.
Evil, yes, but I suspect not Al Qaeda.
Speaking of bombs in Manhattan, how about calling in Mitch Rupp or Gabriel Allon, if not their novelist-creators?
I love the irony of Iran’s Jew-hating President speaking to many like-minded bigots at the UN-- in the city with the largest Jewish population in the world--and being able to spew his lies because his speech is protected by our laws.
Calling David Axelrod a “center fold pinup for the Krispy Krème Donut Magazine” may have been President Obama’s funniest line at the White House Correspondents Dinner last weekend.
The D's on Deficits
I’ll share the gist of a message I sent to certain Democrat leaders on Capitol Hill last week. The deficit is a real issue and can’t be ignored substantively or politically. It also is something that can't be fixed by, in the words of the legendary Sen. Russell Long (D-La.), “not getting you or not getting me, but just getting the guy behind the tree.”
The Democrats not only have to talk the talk but they have to walk the walk and start cutting federal spending which their party favors. They could do worse than starting with farm subsidies and then go down the list.
They don’t have to let the original tax rates—scaled back dramatically by the Bush White House—return, but the D’s can pick a number between what they are and what they would be and generate additional revenue.
Not necessarily a huge revenue raiser, I still like putting limits on medical damages, which would cause healthcare costs to drop, medical malpractice insurance to go down and help as much as anything else to put more money into family pockets.
Social security payments reduced for better off senior citizens. Raising the SS retirement age by five years, to accommodate the fact that we are all living longer. (Did you hear that God?)
Contemporize the marijuana laws, so our state and federal prisons aren’t filled with marginal criminals, who waste tax dollars.
The list is very long and the President Commission on Fiscal Responsibility, headed by Democrat Erskine Bowles and Republican Alan Simpson, won’t lack for options.
What will be needed is to the political will to make the Commission’s recommendations law.
I hope the Democratic congressional leadership doesn’t wait for that report and, instead, picks off some low hanging fruit between now and before they break to run home to run for re-election. Doing the right thing, now, can make that task easier for incumbents.
One quick line about former Wyoming Senator Simpson, a very sharp individual known for his biting wit.
The joke he probably has told to more audiences than any other is about “one of his former constituents,” an elderly man who married a much younger woman. One night the phone rings in the farmer’s house. He answers and his wife hears him say, “How in the hell should I know, it’s a thousand miles away.”
When his young bride asks him who called, he said, “Some idiot asking me if the coast was clear!”