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“Geithner’s team spent much of its time during the debate over the Senate bill helping Senate Banking Committee chair Chris Dodd kill off or modify amendments being offered by more-progressive Democrats. A good example was Bernie Sanders’s measure to audit the Fed, which the administration played a key role in getting the senator from Vermont to tone down. Another was the Brown-Kaufman Amendment, which became a cause célèbre among lefty reformers such as former IMF economist Simon Johnson. ‘If enacted, Brown-Kaufman would have broken up the six biggest banks in America,’ says the senior Treasury official. ‘If we’d been for it, it probably would have happened. But we weren’t, so it didn’t.’”
This is just a quote that hits a topic that I'm seeing a lot throughout a few recent financial blogs. The bills were definitely high in regulation and were critizing Wall Street to get to where they got. But as we discussed in class, those that are sitting in the House & Senate often have ties to the big companies, and therefore there have been numerous amendments. The bills are not nearly as regulatory as they began, and some wonder if it's even worth it...What are your thoughts/concerns?
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I think there is no point in wasting our time creating a watereddown regulation that's not going to work. As Johnson and Kwak stated, creating financial regulation can be simple, just ask if the proposed regulation was in place would the current financial crisis have occured. If we pass a regulation that doesn't answer that question with a resounding yes we are simply validating politicians for doing nothing and giving them fodder to use in their reelection campaigns.
ReplyDeleteI agree with Chloe. Our bills are watered down to the point where they lose the initial value. Working to pass a bill that does not even chip away at the larger problem is useless. The regulators, politicians, and financial elites are far too intertwined in a corrupt game. Without reform we will likely see continued problems and ultimately another financial crisis.
ReplyDeleteInteresting to see that yet again, Geithner and company are working in the interest of the banks (surprise!). After studying all this info about the crisis, I have a hard time understanding how smart guys like Geithner etc. could NOT see the need to break up the banks. A lot of people would explain this as being due to corruption or cronyism. I think it's more complex - as we've seen in the books, these guys have become indoctrinated in the culture of wall street. Again, shows the need not only for new regulations but new regulators.
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