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Failing On "Too Big To Fail"

Via mcjoan, Byron Dorgan rips the FinReg proposal as is:

I stopped writing on FinReg when I realized it was basically a charade (like the silly one time audit of the Fed for actions in the past and the pointless Franken Amendment.) As Dorgan puts it:

"If we don't fix" the bill, said Dorgan, "and we leave this chamber and this Congress and claim to have fixed it and have not done it, then shame on us. We have a responsibility here."

Speaking for me only

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    I was directed to a statement from (5.00 / 0) (#1)
    by Anne on Thu May 13, 2010 at 01:38:34 PM EST
    James Galbraith to the Senate Judiciary Committee's Subcommittee on Crime, via Corrente

    It's not long (three pages), and well worth reading.  Galbraith ends his statement with this:

    Some appear to believe that "confidence in the banks" can be rebuilt by a new round of good economic news, by rising stock prices, by the reassurances of high officials - and by not looking too closely at the underlying evidence of fraud, abuse, deception and deceit. As you pursue your investigations, you will undermine, and I believe you may destroy, that illusion.

    But you have to act. The true alternative is a failure extending over time from the economic to the political system. Just as too few predicted the financial crisis, it may be that too few are today speaking frankly about where a failure to deal with the aftermath may lead.  

    In this situation, let me suggest, the country faces an existential threat. Either the legal system must do its work. Or the market system cannot be restored. There must be a thorough, transparent, effective, radical cleaning of the financial sector and also of those public officials who failed the public trust. The financiers must be made to feel, in their bones, the power of the law. And the public, which lives by the law, must see very clearly and unambiguously that this is the case.

    Will "fixing the bill" fix the underlying problem?  Or will it just provide the illusion that we have actually fixed something?

    It's like . . (none / 0) (#3)
    by SOS on Thu May 13, 2010 at 01:58:48 PM EST
    the only real ammunition you have in your family's arsenal is spending authority.  In the end it's the most powerful weapon of all.

    Politicians try to raise money, but they can't (at least in their home districts) so they sell out to corpgov lobbyists and special interest groups so guess which agenda rules?

    Parent

    Can anyone tell me why the Franken (5.00 / 0) (#7)
    by jes on Thu May 13, 2010 at 04:09:27 PM EST
    amendment is pointless? Seems like not letting financial institutions pick and choose amongst rating agencies is a sound one to me.

    Beats the heck out of me, jes, (none / 0) (#10)
    by Zorba on Thu May 13, 2010 at 05:34:03 PM EST
    because I thought it made some sense, too.  I suppose it's because then the financial institutions wouldn't have as much influence over the ratings, and goodness knows we can't have that, can we?  That might cause them to....you know....lose money......It's a closed, tight-knit club, and they don't want anyone else mucking around and ruining the good thing they have.

    Parent
    This may also interest you, jes (none / 0) (#11)
    by Zorba on Thu May 13, 2010 at 06:11:37 PM EST
    NY AG Cuomo has begun an investigation into eight banks to determine if they gave misleading information to the rating agencies, to inflate the ratings of some of their mortgage securities.
    Link

    Parent
    No "inflation" was necessary... (none / 0) (#13)
    by Mr Natural on Thu May 13, 2010 at 10:58:16 PM EST
    As long as Moody's, S&P, et al, based their ratings on a model itself based on unending housing price inflation, everything was good, forever and ever and ever.

    Parent
    Because (none / 0) (#12)
    by Big Tent Democrat on Thu May 13, 2010 at 06:31:36 PM EST
    it is utterly unenforceable.

    Parent
    Fannie and Freddie? (5.00 / 0) (#8)
    by coast on Thu May 13, 2010 at 04:33:06 PM EST
    If these two aren't touched by any financial bill coming out of Congress, what is really the point?  CBO projected the tab for keeping these two going will be about $400 Billion.  And that ain't going to get paid back.

    Rumor has it (none / 0) (#2)
    by SOS on Thu May 13, 2010 at 01:51:28 PM EST
    Thursday's mysterious market plunge was based on some supposed comments from Mervyn King, Governor of the Bank of England, that the global central banks might be close to deciding to pull the plug and just let everything fall down -- instead of artificially supporting a planet whose economy has become a hollowed-out rotten shell of debt and to stop supporting that which can not be supported much longer anyway.

    'Never has so much money been owed by so few to so many'

    Sounds good to me, Donald (none / 0) (#5)
    by Zorba on Thu May 13, 2010 at 03:42:50 PM EST
    Send Ms. Higa over here to audit the Fed, and the rest of the country will send a big "mahalo" to Hawaii (well, maybe not those who run the Fed....).

    Sh*t... (none / 0) (#6)
    by kdog on Thu May 13, 2010 at 03:46:11 PM EST
    send a real auditor not beholden to nobody to the Fed, I'd be scared they'd have an "accident".

    Parent
    Oh, Dog (none / 0) (#9)
    by Zorba on Thu May 13, 2010 at 05:28:46 PM EST
    .....so cynical.  Gee, I wonder why?  LOL!

    Parent
    Did anybody really expect finreg reform (none / 0) (#14)
    by Mr Natural on Thu May 13, 2010 at 11:03:08 PM EST
    from the same scurvy crew that gave us credit card "reform" that didn't even touch credit card interest rates?