The business community seems OK with the Obama administration’s proposed revamping of the financial regulatory structure — which should give anyone looking to rein in the so-called “Masters of the Universe” pause.
As Steve Pearlstein writes in The Washington Post,
the current system of financial regulation has been thoroughly captured by the companies it was meant to restrain — and that the only way to put things right is to bring in new rules, a new structure and tough new regulators. Anything short of that, and you can almost guarantee that the inmates will be back in charge of the asylum by the time the next bubble starts to develop.
Judged by that standard, the proposals the Obama administration put forward this week to reform the regulatory apparatus were a bit of a disappointment.
He blames the shortcomings on efforts by the president to move quickly and appease too many people. Reform, he says,
should have been 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, drawn from interviews under oath and internal records and made available to the public. That should have been followed by a detailed set of recommendations from a panel of seasoned regulators and independent experts on how the regulatory system should be reformed to prevent similar crises in the future.
If Congress decided to deviate from those recommendations, of course, nobody would be surprised. But at least it would have given the public a marker for reform that was free of industry influence. It would have also provided political cover for the president and members of Congress, a politically acceptable default position that they could have used to turn aside the entreaties of local bankers and campaign contributors when they came knocking.
Instead, the Obama team, hoping to ride the wave of public outrage before
it crested, determined to fashion a reform proposal even before a thorough
analysis could be completed. And by deciding to contort and trim their proposal
to accommodate the objections from powerful interest groups and key members of
Congress, members of the Obama team have now made it politically acceptable for
everyone to treat this as just another special-interest free-for-all of the sort
that helped cause the crisis in the first place.
Pearlstein’s right. We need a full-blown investigation of what happened so that we can craft tough rules and rebuild our regulatory system to prevent future meltdowns. The economy is not supposed to be a casino that spits out winnings. It’s about producing goods and services that people need — and believe me, I’ve never met anyone who needed a collateralized debt obligation.
Hank Kalet 
Sorry, at risk of enraging \”Annony-mush\”, regulations and regulators are the reason we have a problem. More regulations and regulators ain't going to solve anything. The FED is at the root of the problem inflating the currency. Making them bigger and more powerful is like asking a the fox to \”guard\” the hen house. Can we at least AUDIT the FED to see what this private monopoly is doing to us for the benefit of the elite?Never met anyone who needs a CDO? Try a homeowner who wants a low cost mortgage. CDOs allow a lot of them to be aggregated and sliced and diced. Know any pension funds that need cash flow at very specific points in time? CDOs allow them to get that.\”We\”, the collective sheeple of these United States, have made one mistake. We've allowed the congress critters and their bureaucrats fool us into thinking we didn't have to watch them like a crooked dealer on the rube's pay day.Maybe we need less regulation and let things fail. Bankruptcy has a interesting effect on management. It puts them out of work. \”Too big to fail\” is just \”TOO BIG\”!Maybe the rule should be no ledgers with room for more than a 1,000,000,000.00 at the bottom line. That'll make work for a lot of out of work regulators, bureaucrats, and congress critters.Argh!
How dare you, sir, how dare you besmirch and mock the proud Anonymous family name, proud of its Greek origins.But seriously folks, before FDR came along and enacted all his great legislation and banking regulations, there were few regulations and few protections for the ordinary American. The GOP (except for TR) allowed the giant cartels, the corporations to run rampant. Whatever they wanted was A-OK, no questions asked. Prior to FDR, we had a laissez-faire, social Darwinistic philosophy that allowed the greed heads to destroy the economy and to put us in a Great Depression. Capitalism needs to be strongly regulated lest it devour itself and bring the whole economy to ruins. Beginning with the Reagan era, our leaders have forgotten the lessons of the depression and FDR's fixes for the ills of runaway predatory capitalism. Most of the GOP and the corporate wing of the Democratic party have weakened the regulations that protected us from the worst abuses of corporate America. Corporate America doesn't give a fling about the people or the nation, all they care about is profits. They will abuse workers, the land, the environment unless they are given periodic kicks in the a$$. They will sell us death trap cars, snake oil, tainted food and other lethal products unless we call them to task. The only entity powerful enough to challenge corporate power is the government unless the government itself has been bought off by the rich corporate lobbyists. Hey, how about those anti-government, anti-tax (libertarian) shooters, James W. Von Brunn and Scott Roeder? Rabid anti-government and anti-tax ideology eventually leads to wacko violent nuts like those two cowardly assassins.