Thursday, June 18, 2009
Always consider the source
President Obama's new financial regulation proposals are a good case in point. When your two major sources are Wall St regulars who would never dream of offending their friends who were only doing what Larry and Timmy said anyway, you won't be too radical. In fact, when you consult with the losers who instigated the disaster, not about what they did wrong but about how to put lipstick on their pigs, you won't upset anyone important.
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.”About the only ones who don't like it are Republicans, who don't like anything.
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 Street’s modus operandi — it’s 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. Without question, the latter would be more difficult, more contentious and probably more expensive. But it would also have more lasting value.
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