This entire problem is the result of banking deregulation in the late 90′s which turned previously solid, conservative bankers into compulsive gamblers. So banking needs to be re-regulated before you even think of trying to recapitalize the banks. Otherwise, you will just be putting more money into the hands of compulsive gamblers.Jim Kunstler writes how Obama was indifferent to this kind of straightforward reform. Once again Mark Levin's post-2008 observation comes back to haunt us: Obama is precisely the wrong man to be president now.
Derivatives should be banned. Buffet called them “financial weapons of mass destruction”, and bankers are currently using them to terrorize the Europeans into bailing them out.
Securitization should be banned, because it encourages banks to make unsound loans and pass them off to unsuspecting investors. Loan risk should stay with the bank that originated the loan.
Investment banking should be completely separated from consumer banking. Bad investment banking decisions should not be allowed to crash the consumer banking system.
Re-regulate the banks first. Then worry about how to recapitalize them.[1]
Notes
[1] Ben Dover comment on "Italian Bond Yields: This Crisis Isn’t Over." By Cullen Roche, Pragmatic Capitalism, 10/13/11.
4 comments:
These do seem rather simple and non-controversial. Why aren't they being done???? Grrrr I am beginning to feel that a new Constitutional Convention is the only solution.
It's maddening to see all the politicians frozen as they are. Fine, argue about Keynes and QE but at least handle the simple stuff as you say. Freddie and Fannie were and are massively part of the problem yet I understand they are not addressed in Dodd Frank. Just reinstitute Glass-Seagall. But no.
I like to say I'm in the mood for politicians who want to break furniture. I'm tired of the "maybe this-maybe that" school.
The usual reaction to mention of a constitutional convention is immediately to talk about a runaway convention. Well, it might be better than a runaway Supreme Court, which we have had.
It is hard to imagine that a convention would be able to come up with something. I'd want the professional pols to be kept out but the result might be a giant discussion group with no unity.
Col., I agree, and I advocate a Constitutional Convention as the best, most peaceful and direct avenue for seccession. If we had to sit down and come to Union consciously and deliberately, it would be really really obvious, really really fast, that Union is no longer desired (or even possible).
In short, a Constitutional Convention is probably the only thing that could take down this Evil Empire we find ourselves living in.
I think we would save ourselves a lot of grief if we considered secession. Multiethnic and multiracial societies are poisonous for the strife, suspicion and paralysis they breed. How delicious it would be for school boards, businesses, landlords, and home buyers not to have to take into account black pathologies. If a black school district like Atlanta wanted to falsify test scores for black students they could do so to their hearts' content. They could even set standards low enough that there wold be no need for falsification. If blacks want an ineffective criminal justice system that does not deal with the animals in their midst they could choose that freely and without interference by whites.
Political decisions could be made without an eye to the power of swing voters on welfare or who reject the premises of our Constitutional republic and despise white culture.
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