Financial Reform Was A Good Step Forward....But

"The Real News" interviews economist William Black, who talks about the reform act that recently passed through Congress and signed by President Obama. The key item discussed is that while Obama's people are better stewards of the nation's finances at the moment, their reforms will not curb any of the abuses that a Republican regime might take up if they regain power.

It's Not What You Try To Spin, It's What Slips

Watch as this financial industry hack tries to explain why Congress should not pass regulations for Wall Street. He means to say that there should be something in place, but what he really means slips right out.

Regulation Is What We Need

I attended a symposium on the credit crisis yesterday up at City College and couldn't help but laugh. The "experts" were well versed in what they knew but there was really nothing new coming from them. Hedge funder Jonathon Trugman's idea to eliminate taxes on certain financial products typified the conservative idea that we can tax-cut our way out of this mess when it was tax cuts (and laissez-faire capitalism) that helped cause the problem. What we really need is re-regulation, something that Obama and Geithner show signs of understanding.

From RawStory:

"In the coming weeks, we will take additional steps, among them, proposing new and stronger rules to protect American consumers and investors against financial fraud and abuse," Geithner said.

"These will help us deal in the future with threats like the practices in subprime lending that kicked off the current crisis," he told the Council on Foreign Relations in a New York speech.

Geithner said that the plan would not focus solely on financial regulations in the United States, "but -- with the help of other interested nations and strengthened international bodies -- on stronger standards globally, as well."

Geithner will accompany US President Barack Obama to the Group of 20 summit of developed and developing nations in London on April 2 aimed at devising a global system to ensure recovery and making financial reforms.

In our highly connected world, we do need to devise a plan that not only deals with American-bred greed and corruption but international forms of it as well. Using ideas of the past should not be a part of the equation that could possibly be developed at the G20. People like Trugman and those with ideas like his need to buried and regulations that were successfully utilized in the past need to be revamped for our 21st century world.

Schumer No Longer Such Good Friends With Wall St.

For as long as Chuck Schumer has been in the Senate, he's been one of the first legislators that the financial industry went to in order to get their business "taken care of." As a Senator who represents the little piece of land that Wall Street resides on, in order to get access to the bankers' pockets, he had to do his best to please them...for nearly thirty years. Thanks to the pro-business legislation he helped pass, we are in the worst fiscal crisis in more than a generation (or three). Unlike Republicans though, Mr. Schumer might just be seeing the error of his ways and could possibly repent for them.

From Crain's:

One massive economic crisis later, Mr. Schumer said that a strong financial-services regulator is needed to help rebuild confidence in U.S. markets, because jittery investors around the world are looking for places where they can trust that tough regulators will protect their interests. To that end, he called for the most dramatic overhaul of the U.S. financial regulatory system since 1933 and urged the new regulators be granted the power to “get in ahead” of problems before they explode.

“We need a smarter regulator, a tougher regulator,” he said, adding that he would like to see the Securities and Exchange Commission move its headquarters to New York from Washington so it can be closer to the banks and brokerage houses it is charged with overseeing. He added that federal regulation of financial services should be overhauled to become more global in scope and that supervisors should be watching for “systemic risk” so that problems at places like American International Group do not infect the entire system.

Mr. Schumer, a member of the Senate Banking Committee, said that a regulatory reform bill would be presented to President Barack Obama by April.

Two years ago, Mr. Schumer, along with Mayor Michael Bloomberg, released a report prepared by consulting firm McKinsey & Co. which warned that the regulatory system was a big problem that threatened New York’s standing as the world’s financial capital.

Even if you idolized Gordon Gekko in the eighties, that doesn't mean you have to follow him off the cliff in 2009. I suspect Schumer enjoyed that movie when it came out, but the consequences of that mentality are front and center for the senior Senator from New York these days. Like Rep Walter Jones's (R-NC) transformation on Iraq after signing so many letters to the families of fallen troops, everyone has the ability to change their ways. If Schumer keeps it up and actually starts regulating, beyond just moving the SEC's location and generalities about improving the system, then I wholeheartedly welcome him to the more economically liberal wing of the Democratic party.