Obama to tighten Financial Rules to prevent another meltdown. Why didn't Bush? (Congress, illegal)
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In just the first week of his administration, President Obama is already working on significant changes to the regulation of the financial sector, to prevent the calamity we are now in from happening again...
One rule is to remove the conflict of interest removed between the rating agencies (Moody's...) and the companies whose securities they rate. Currently the agencies are paid by those same companies.
Another rule is to have derivatives (Credit Default Swaps, Collateralized Debt Obligations) traded via a central clearinghouse or exchange to provide visibility into who holds what positions...
Tighter control over Mortgage Brokers is also proposed...
And limits on Executive Compensation for any company receiving government bailout funds are being designed..
Obama is going to implement the change he promised, and I say 'Thank God!!!'...
Why didn't Bush even consider, let alone implement, any of the ideas above??? (Because he was in bed with the scoundrels who robbed the country blind - that's why!!!).
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
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Good for Obama. We need to go back to very tight regulation of banking and finance. FDR warned about being too loose with these institutions and he was 100% correct!
Though I can appreciate the sentiment behind this as well as the desire to right the economy, this will be a fine line to tread in a free amrket economy. That being said, I wrote both my senators and congresswoman to speak out against the bail out(for all the good that did).
Location: Jonquil City (aka Smyrna) Georgia- by Atlanta
16,255 posts, read 23,727,147 times
Reputation: 3587
Quote:
Originally Posted by dramamama6685
Though I can appreciate the sentiment behind this as well as the desire to right the economy, this will be a fine line to tread in a free amrket economy. That being said, I wrote both my senators and congresswoman to speak out against the bail out(for all the good that did).
Who said it is a free market economy? The United States is not a "free market" economy. That stopped in the 1930s and 1940s. We are a guided capitalist economy- or a regulated market economy.
In just the first week of his administration, President Obama is already working on significant changes to the regulation of the financial sector, to prevent the calamity we are now in from happening again...
One rule is to remove the conflict of interest removed between the rating agencies (Moody's...) and the companies whose securities they rate. Currently the agencies are paid by those same companies.
Another rule is to have derivatives (Credit Default Swaps, Collateralized Debt Obligations) traded via a central clearinghouse or exchange to provide visibility into who holds what positions...
Tighter control over Mortgage Brokers is also proposed...
And limits on Executive Compensation for any company receiving government bailout funds are being designed..
Obama is going to implement the change he promised, and I say 'Thank God!!!'...
Why didn't Bush even consider, let alone implement, any of the ideas above??? (Because he was in bed with the scoundrels who robbed the country blind - that's why!!!).
No not at all. But what they put in the newspaper as an idea and what it becomes when congress and or agencies get done with it can be two different things (as far as I know congress hasn't been dismissed). These changes aren't a bad idea.
No not at all. But what they put in the newspaper as an idea and what it becomes when congress and or agencies get done with it can be two different things (as far as I know congress hasn't been dismissed). These changes aren't a bad idea.
Agreed - you can never tell how Congress will actually write the law - but I think that they will give Obama considerable lattitude in getting what he wants, how he wants it, at least in the first year or 2...
However, the fact that these ideas are even being discussed is a quantum-leap of change from the prior administration...
When Bill Clinton gave that pen to Sanford Weill, it symbolized the ending of the twentieth century Democratic Party that had created the New Deal. Although the 1999 law did not repeal all of the banking Act of 1933, retaining the FDIC, it did once again allow banks to enter the securities business, becoming what some term "whole banks."
Phil Gramm, Bill Clinton Key Culprits in Subprime Meltdown
But years of bribing, er, lobbying Congress had done it's trick, and Citicorp's CEO Sandy Weill said he was assured by Federal sources the merger would be approved, which it was in 1998. (Technically the merger was illegal in 1998 as the law wasn't repealed until November, 1999.) Renamed Citigroup after the merger, they have gone on to purchase other investment firms.
Clinton vowed to veto the Senate version of the bill unless it was re-written to include "requirements that banks make loans to minorities, farmers, and others who have had little access to credit." The new version passed 90-8 in the Senate, passed the House, and Clinton signed it into law. Clinton's required reworking of the bill should be studied closely to see what role, if any, it played in illegal, often racist, subprime loans at higher rates than Caucasian borrowers were offered.
mccain saw the crisis coming and tried to stop it; obama took money to look the other way:
McCain’s attempt to fix Fannie Mae, Freddie Mac in 2005;
...Which candidate foresaw the credit crisis and tried to do something about it?...John McCain did — and partnered with three other Senate Republicans to reform the government’s involvement in lending three years ago, after an attempt by the Bush administration died in Congress two years earlier. McCain spoke forcefully on May 25, 2006, on behalf of the Federal Housing Enterprise Regulatory Reform Act of 2005 (via Beltway Snark):
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