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Everything You Need to Know About Dodd's Financial Reform Bill: "This Legislation Will Not Stop the Next Crisis from Coming"
Instead of going into a lengthy analysis about the pros and cons of Chris Dodd's financial reform bill, I'll let the Senator speak for himself:
This legislation will not stop the next crisis from coming. No legislation can...
What
Dodd is really saying is that there's no use in doing any of the things
which all of the top independent economists and financial experts say need to be done to stabilize the economy. See this, this and this.
Poor old Wall Street has to become a victim to the business cycle and get bailed out once again:
"Not
to be funny about it, but my daughter asked me when she came home from
school 'what's the financial crisis,' and I said, 'Well it's something
that happens every five to seven years,''' [JP Morgan CEO Jamie] Dimon
said.
And the poor little politicians have to raise enough money to get re-elected.
That's just the way it is.
It is just not politically feasible to pass legislation which will actually change anything.
Obviously, no legislation can
guarantee 100% that a financial crisis will not occur. But good
legislation with teeth that significantly reforms the system and
removes the major sources of risk along the lines set forth in the
links above would reduce - by perhaps 90% - the odds of another collapse within the next couple of decades.
Obviously, no legislation can
guarantee 100% that a financial crisis will not occur. But good
legislation with teeth that significantly reforms the system and
removes the major sources of risk along the lines set forth in the
links above would reduce - by more than 90% - the odds of another collapse within the next couple of decades.
Does anyone doubt that a bill jointly drafted by, say, William Black, Janet
Tavakoli, Elizabeth Warren and Simon Johnson would remove 90% of risk
from the system? (These are just examples - there are other people who could draft it as well). You just need independent experts to explain how to do it.
Dodd's bill, on the other hand, will reduce the odds by only about 15-30%.
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Call it the "Pretend to Do Something" Bill. If anything, it cements a deeper role for the Fed in financial regulation ( a job - take your choice - it is really awful at, or really good at, depending on your perspective). It creates a phony consumer financial watchdog, and then houses it inside the Fed, courtesy of the demands of Senators Corker and Warner, 2 shills for the Federal Reserve. Why anyone thinks placing all this regulatory authority into an entity which is (at least nominally) politically unaccountable is beyond me.
I've concluded that this notion that a central bank is supposed to be removed from the political realm and "the dangers of democratic rule and its temptation to print" is a joke, and nothing more than a thin excuse for the institutionalization of oligarchic rule. Sort of like, you guys can have all the authority you want, as long as you stay away from the money and the banks. I say, phuck the elites and take a chance on political accountability being the better path for the long term, and end the Fed. Not that there is a snowball's chance in hell of ending this beast.
Tip 'o the hat to DH for the new verb.
This isn't supposed to stop anything. This is a protect the FED bill.
audit the fed
Totally!
Why are they drafting anything. They aren't qualified. Give them some coloring books and hire some of the qualified people that you mentioned.
Dodd just fucking retire.
Dodd's bill is like jerking off next to your hot wife a la Kevin Spacey in American Beauty.
HA Ha ha.
Since when has any legislation or government action prevented a crisis? I thought the whole point of government was to make the crisis worse and profit from it, kinda like the mod...exactly like the mob, well maybe less honest.
it's sad to have to argue the point but government has done many useful things in the past: the food and drug regulations under t. roosevelt, the financial regs coming out of the pecora commission under f. roosevelt, the national highway system and the suez intervention under ike, the clean air clean water stuff under nixon.
it is really when the "movement" conservatives reach power in 1980 (grover norquist, et. al.) that the strategy becomes to combine incompetence with unresponsiveness and vast debt increases during an economic expansion so as to hamstring and discredit the federal government. governments generally have their weaknesses and their sins but the last thirty years in this country has been a hideous run of malfeasance with so very little positive to show for it.
i guess that's what supercycle tops look like up close.
I'm in the Austrian camp so I think most of those good things are not. They are trying to cover up prior sins the gov made. We would not need financial regulation if we didn't have the Federal Reserve or the corporate shield for fraud and malfeasance. You think these people would be this irresponsible if it was their own money and they were personally liable for their bad bets? some might be but watching Dick Fuld rendered to eternal poverty and begging for food might make a few Wall Street guys think "Huh maybe I shouldn't take less insane risks..."
The four of them should draft an annotated "model bill" for public circulation.
"Something that happens about every seven years." -- said by the CEO of some TBTF about a year ago during CONgressional questioning. He was telling CONgress what he said to his child when she asked "What is a financial crisis?"
Thanks, I added to post ...
A very big TY Mr. GW, have admired your excellent writings for quite some time. May the cooling winds always be at your back and the sun warming your face.
ADDED: Took time to look it up for a PROPER quote as was going strictly from my memory earlier:
""Not to be funny about it, but my daughter asked me when she came home from school 'what's the financial crisis,' and I said, 'Well it's something that happens every five to seven years,''' Dimon said."
James L. "Jamie" Dimon (born March 13, 1956) is the current CEO and chairman of JPMorgan.
Source Of Quote: http://www.cbsnews.com/stories/2010/01/13/business/main6091377.shtml
(third to last 'paragraph')
and dodd can bring himself to propose what he has (limited "bipartisanship") only because he personally won't have to raise any more money or serve in office after this year. too bad. i wanted peter schiff to beat him like a drum and now it might not happen.