27 June 2009
26 June 2009
Do I have to sit through a year of nonstop coverage, sobbings, and vulture-like preying on the corpse? Apparently, I do.
I don't even care about the supposed kiddie fondling -- it's just the enforced mourning, and especially the appalling necrophilic vulturing of the press.
My two cents, unrelated to the rest, is that, hey, he's not that great, anyway: four good songs on _OTW_, _Billie Jean_, one or two other catchy ones. I never liked him much as a preteen, and I won't pretend I do now to join in The Big Weep.
But what one thinks of his music/art isn't really relevant. Shit, when Ingmar Bergman died, I didn't have a public sobfest to show that I was part of the "in crowd," using my loud liking of him to show my conformity. I mean, why not sell pieces of his dead body and home for shrines around the world to worship -- or better yet: a Michael Jackson cookie we can all eat to share of His goodness?
I mean, who in their right mind would launch such a death cult...uh...hmmm.
It’s good that Barack Obama is an agile basketball player because on financial regulatory reform he’s having to straddle an ever widening chasm between his words and his deeds.
Obama said: “Millions of Americans who have worked hard and behaved responsibility have seen their life dreams eroded by the irresponsibility of others and by the failure of their government to provide adequate oversight. Our entire economy has been undermined by that failure.”
“Over the past two decades, we have seen, time and again, cycles of precipitous booms and busts. In each case, millions of people have had their lives profoundly disrupted by developments in the financial system, most severely in our recent crisis.”
Strong words, even though he didn’t include “corporate crime, fraud and abuse” to replace the euphemism “irresponsibility.” One would think that his 88 page reform proposal to Congress would be up to his words. Instead he provides Washington aspirins for Wall Street brain cancer.
The anemic nature of these reforms ostensibly designed to prevent or deter another big bust on Wall Street and its hostage grip on the nation’s savings and investments immediately drew the ire of well-regarded business columnists.
Joe Nocera of the New York Times wrote the “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.” Nocera asserts that the reforms do not “attempt to diminish the use” of the customized type of derivatives which trillions of risky dollars generated “enormous damage to the financial system” ala A.I.G’s collapse. He notes President Roosevelt’s far more fundamental reforms, included the Glass-Steagall Act, which “separated banking from investment.” It prevented a lot of banking mischief until Clinton, his Treasury Secretary Robert Rubin and Citigroup got Glass-Steagall repealed in 1999. Obama is not proposing to re-instate this critical safeguard. Nocera said, firms “will have to put up a little more capital, and deal with a little more oversight, but….in all likelihood, [it will] “be back to business as usual.”
Star business reporter, Gretchen Morgenson, ripped into the Obama plan in the Sunday New York Times for doing too little to eliminate systemic risks posed by financial firms that are “too big to fail.” “Rather than propose ways to shrink these companies and the risks they pose, the Geithner plan argues instead for enhanced regulatory oversight of the behemoths.” She implies that taxpayers will be on the hook for even greater bailouts in the future.
A measure to prevent the “too big to fail” bailouts was suggested by none other than Obama’s current economic advisor, former Federal Reserve Chairman, Paul Volcker. Speaking in China, no less, Volcker recently said the Federal government could simply prevent these big banks from trading for their own accounts. But Obama is not listening to Volcker these days. Instead Treasury Secretary Timothy Geithner and White House advisor, Larry Summers, who played important roles in the past decade facilitating the enormous speculation on Wall Street, have got Obama’s ear.
The President’s plan omits, (1) strong antitrust enforcement, (2) tough corporate crime prosecution, and (3) more authority for shareholders, who own their companies, to control their hired bosses. The plan should have included giving shareholders the decisive power to set executive compensation—the perverse compensation incentives helped push companies to wild speculation.
The reform plan’s defaults go on and on. There are no mechanisms to encourage millions of investors to band together in Financial Consumer Associations. In 1985 then Cong. Chuck Schumer (Dem. NY) introduced such an amendment to the savings and loans bailout legislation. It did not pass.
What about sub-prime mortgage securities? Banks would be required to retain just a five percent stake before handing them off to other syndicates. This hardly is enough to induce prudence by banks selling these mortgages to impecunious home buyers.
Obama does propose a new financial consumer regulatory agency. But unless he appoints someone, as chair, like tough-minded Harvard Law Professor, Elizabeth Warren, who advanced the idea, the regulated financial firms will, as usual, take over the agency.
The Washington Post’s Steven Pearlstein, derided the Obama proposals for not being “grounded, first and foremost, in a thorough and independent analysis of how the crisis was allowed to develop and what regulators did and didn’t do to prevent it….” He was disappointed by the lack of controls over “hedge funds, private-equity funds or structured investment vehicles.”
Obama did strengthen the fiduciary duties to investors by stock brokers. But he did not give these defrauded investors any better civil action rights in court beyond what they were left with by the hand-tying securities law passed in 1995.
So now it is up to Congress and its hordes of banking and insurance lobbyists. Good luck, savers and investors. Unless that is, you’re doing your business with credit union cooperatives which don’t gamble with your money.