Obama to regulate our entire financial system, liberals launch new offensive.
A story in NY Times today suggests that plans by the administration will be unveiled soon detailing the most far reaching and intrusive regulations to date. The first sentence of the story sets the tone for what is sure to be a highly contested and controversial proposal.
"The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan"
With this introduction, banks and similar institutions that do not fall under the auspices of the TARP plan will be subjected to government oversight in all matters of compensation. Essentially our government will now be in charge of determining decisions currently being decided by industry experts and regardless of what noble intentions Obama has in mind, this cannot possibly end well.
This kind of intervention may very well have devastating results in the form of talent fleeing the industry and seeking employment in other countries or simply switching careers all together. Most notably, intervention of such magnitude will surely be justified as something sorely required using the explanation that deregulation caused our current crisis. Unfortunately this excuse resonates well with Americans who for the most part do not understand the complex world of credit default obligations, default swaps, derivatives and other tools of immense leverage. Of course this is by no means an attack against Americans, because frankly, why should they understand these concepts? It took hours of reading and listening to speakers for me to come close to understanding the concepts behind our meltdown and I can assure you that deregulation has very little to do with it.
America's financial system has not been a free market system for a very long time, probably since the Great Depression when the first wave of immense regulation took place (and look how well that turned out). We have always suffered from a hybrid of free market and socialist principles and the government will never in a hundred years admit that they have as much to do with the current collapse as greedy Wall St. punks.
Barney Frank can certainly hold public show trials and demand AIG executives to be paraded in public, but it should anger every red blooded American in realizing that Frank was instrumental in preventing REGULATION of Fannie and Freddie, two companies that are the backbone of the housing collapse. When the GOP called for regulation of Fannie/Freddie, they did so because these two companies operated as government sponsored enterprises and operated with margins that doubled that of the most risky company, Bear Sterns. Yet, instead we get people like Jon Stewart whose ratings triple because he gets to skewer Jim Cramer on national television, on the grounds that some private companies acted recklessly and Jim failed to report it. However Jon completely ignored the two government sponsored enterprise (GSEs) that owned half of the entire US mortgage market and have since collapsed, siphoning almost 200 billion in taxpayer money. Of course he ignores it, obviously it is much more interesting to demonize AIG executives taking 100-200 million dollars than it is to explain what a GSE it's responsibility in our housing collapse.
See, that actually takes time to research and guts to finally admit that government intervention, not a lack of regulation is the actual culprit behind our current demise!
"The Obama administration will call for increased oversight of executive pay at all banks, Wall Street firms and possibly other companies as part of a sweeping plan"
With this introduction, banks and similar institutions that do not fall under the auspices of the TARP plan will be subjected to government oversight in all matters of compensation. Essentially our government will now be in charge of determining decisions currently being decided by industry experts and regardless of what noble intentions Obama has in mind, this cannot possibly end well.
This kind of intervention may very well have devastating results in the form of talent fleeing the industry and seeking employment in other countries or simply switching careers all together. Most notably, intervention of such magnitude will surely be justified as something sorely required using the explanation that deregulation caused our current crisis. Unfortunately this excuse resonates well with Americans who for the most part do not understand the complex world of credit default obligations, default swaps, derivatives and other tools of immense leverage. Of course this is by no means an attack against Americans, because frankly, why should they understand these concepts? It took hours of reading and listening to speakers for me to come close to understanding the concepts behind our meltdown and I can assure you that deregulation has very little to do with it.
America's financial system has not been a free market system for a very long time, probably since the Great Depression when the first wave of immense regulation took place (and look how well that turned out). We have always suffered from a hybrid of free market and socialist principles and the government will never in a hundred years admit that they have as much to do with the current collapse as greedy Wall St. punks.
Barney Frank can certainly hold public show trials and demand AIG executives to be paraded in public, but it should anger every red blooded American in realizing that Frank was instrumental in preventing REGULATION of Fannie and Freddie, two companies that are the backbone of the housing collapse. When the GOP called for regulation of Fannie/Freddie, they did so because these two companies operated as government sponsored enterprises and operated with margins that doubled that of the most risky company, Bear Sterns. Yet, instead we get people like Jon Stewart whose ratings triple because he gets to skewer Jim Cramer on national television, on the grounds that some private companies acted recklessly and Jim failed to report it. However Jon completely ignored the two government sponsored enterprise (GSEs) that owned half of the entire US mortgage market and have since collapsed, siphoning almost 200 billion in taxpayer money. Of course he ignores it, obviously it is much more interesting to demonize AIG executives taking 100-200 million dollars than it is to explain what a GSE it's responsibility in our housing collapse.
See, that actually takes time to research and guts to finally admit that government intervention, not a lack of regulation is the actual culprit behind our current demise!
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