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Paul Farrell (at Marketwatch) gets his rant on, raging at the $400 million lobbyist effort Wall Street has put forth to kill financial reforms.
He writes that this “signals a resurgence of unregulated free market Reaganomics capitalism, the conservative ideology that killed Glass-Steagall in 1999 creating too-big-to-fail banks, setting the stage for the 2008 meltdown.”
But its much worse than that. What Wall Street wants is to water down reform so it can, according to Farrell, pursue these 8 goals:
(1) evade securities lawsI wish I could say I disagree — but I don’t. Unless we get substantial reform, nothing will change. Why?
(2) avoid taxes
(3) minimize capital requirements
(4) increase leverage
(5) hide speculative risks
(6) maximize short-term profits
(7) avoid stockholder disclosures, and
(8) manipulate regulators.
“Wall Street needs to continue running the same scam on taxpayers in order to get their mega-bonuses. They have lost their moral compass, sold their soul to the devil, lack a conscience, have no interest in the public.”Well said . . .
I agree- this was the basis of my reading summary. We seem to have slipped right back to where we were in regards to lack of regulation and transparent reporting.
ReplyDeleteWe have new people in charge who in a short time will replicate what those before them did to make money, and yet we are doing nothing.
When will there be a change - or is the answer never?
I guess I agree with the basic argument of the article. Wall Street is spending like crazy to kill reform.
ReplyDeleteThe only thing I disagree with is the moral posturing. I think it's a waste of time to try to blame this on greed or a lack of a moral compass. We should expect Wall Street firms (and all companies) to try to increase shareholder wealth at all times. It doesn't take a rocket scientist to understand that financial reform will hurt the bottom line of these companies. OF COURSE they are fighting reform tooth and nail. This doesn't necessarily make them good or bad, that's just how it is.
I think there is a moral issue when you are evading and trying like all hell to manipulate laws. Front running can not be considered a moral practice. I do agree though that there is no morality issue with wanting to make money, as long as you do it legally. As long as they are marking money this way and no one is stopping it, nothing will change. Problems like over-leveraging will certainly not go away without some kind of regulation.
ReplyDeleteIt seems very shortsighted of these companies to oppose reform. In the short run they can again make exceptional profits but then they will end up in the same financial situation as before. I just hope that the next time around the United States does not offer these companies large bailouts. If they want to take great risks they should assume the full consequences of their actions.
ReplyDeleteI think its hard to judge Wall Streets moral platform because like Matt said companies are looking to maximize return at all times, and when there is that much money on the line I feel like I would do the same thing. On the other hand I think that while Wall Street may be running wild at times other institutions that affect the financial market need to be held accountable as well. Leading up to the great depression and our current financial crisis the fed was sitting watching the bubble build under their low rates. I think that there needs to be some reform to keep everyone in line.
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