Why The Paulson Plan Is DOA

Business Week:

Let's see. In the middle of perhaps the greatest financial upheaval since the Great Depression, Treasury Secretary Hank Paulson is proposing a change in financial regulations which basically amounts to a big wink to Wall Street. His plan will go nowhere, both for political and practical reasons. In fact, it does not even meet the minimum standard of improving transparency, which would reduce the possibility of a similar crisis in the future.

The main point of the Paulson plan is to make regulation more efficient. It notes that changes in the capital markets are

...pressuring the U.S. regulatory structure, exposing regulatory gaps as well as redundancies, and compelling market participants to do business in other jurisdictions with more efficient regulation.

So what does the plan actually propose?

The one clear improvement is more regulatory oversight for mortgage lenders. Otherwise everything else in the plan consists of rearrangements and clarifications of current regulatory responsibilities, at least in the short and medium run. For example, responsibility for regulating insurance companies would gradually be shifted from the state to the federal level. And the SEC and the Commodity Futures Trading Commission (CFTC) should be merged. The Paulson plan makes sure to note that the new combined agency should engage in faster approvals of new financial products.

Read the whole story: Business Week

Comments

[Artos]

I'm listening to Paulson spew his bullshit on Bloomberg this
morning. All I hear from him is Blah blah Blah blah Blah. Two things
though that he said did come through and that was how he said the problem
was complicated or complex. Yeah, I should say it is and why is that.
My appreciation of why is because they intentionally made it that way
so Americans wouldn't know what the scumbags were up to. Look at Enron
as a prime example. They too tried to make their doings as complex as
possible so that the truth would get buried in the lies. Just like a
magician.
Also Paulson said something about regulating the market
place. Wow !!!!
Imaging that, after this Administration doing their utmost to destroy
all regulation now all of a sudden they want to regulate, Hmmm. Oh and
yet he (Paulson) didn't want to call it regulation. Perish the thought
since they are so against regulation. And then they want to creat a new
Uber Agency to oversee it all. We seem to be getting a lot of Uber
Agencies lately.
I don't know about you but the whole thing is nothing but
more Bush Administration garbage.

[knosiswar]

So we're going to let the Fox watch the Hen House. The Fed is NOT a Federal institution, it is NOT owned by citizens and therefore holds NO influence or sway over what the 'FED' does. Since the creation of the Federal Reserve, it has NEVER had a Congressional audit and has no oversight, and fails to perform it's mission. It has served it's MASTERS WELL though, by manipulating the credit markets to maintain America's debt load.

[vippy]

The FEDERAL RESERVE has the money and they buy the politicians. In fact, the last two elections had to be stolen in order for them to get what they had desired. It all will come out in the history
books, only we won't be around to see it. I think the last time this happened was 1929 when the
oil industry had to steal an election in the US.

[mmckinl]

This author completely underestimates the power of the private Federal Reserve, their Member Banks, Investment Banks such as Goldman, Insurance Compainies such as AIG and the Rating Agencies such as S&P.

These people are the biggest donors to both the Democrats and Republicans.

One can only hope that Paulson's ineptitude such as he displayed in his ill fated SIV vehicle for bad paper or his Hope Now Plan for foreclosures will come to fore to kill this privatization of regulation of the private bankers for the private bankers by the private bankers.

[WIpatriot]

Gotta agree, mmc.

I think it is no coincidence that we have massive failure of government entities to do their jobs, under the Bush administration, that require them to come up with "solutions" that will fix the future problems. Who's buying it?

[Podewumun]

Who's buying it?

More like they're selling it, and we're going to pay for it.

[Artos]

WIPatriot,

These People placed at the head of Federal Agencies by Bush aren't there to create solutions to problems or make things better. They are there for one reason only and that is to do as much damage as possible while the Republicans are in charge. They hate regulations. They want to be rid of them and this situation in our economy is a direct result. Congratulations Republicans, you have done a wonderful job of destroying America. Osama Bin Laden was never a problem for you guys, he was your excuse. You needed him so you could use him as an excuse to pillage this Countries Treasury and destroy our economy. You may as well offer him one of those Presidential Medals of Freedom since he did you such a great service.

[dadw5boys]

IF THEY PUT THE U.S. GOVERNMENT IN AN ADVISORY ROLE WITH THE NATIONS ECONOMY WE ARE ON THE ROAD TO DOOM.

EVERYTHING BUSH HAS EVER TOUCHED HAS BEEN A DISASTER!!!!!!!!!!!!!!

WHO IS ON THE BOARD OF THE FEEDERAL RESERVE???????

THEY ARE NAMELESS AND FACELESS !!!!!!!!!!!!!

[elpollo]

I believe your cap lock key is stuck.

[Artos]

. I have been sending e-mails too the Fed Board in recent months reminding them that they are Card carrying Capitalist Swine Republicans and are supposed to be against Socialism. So I asked them, "What Happened? Have you guys suddenly found Socialism and welfare to your liking? How is it that you guys are so free with the
tax- paying publics money that you can feel so free to bail out your
Corporation Buddies? "And they blithely just keep on doing it.
Then I read about how the Company that is my Mortgage
holder, Countrywide will be sold to B of A and that the CEO is getting
millions in payoffs and that the second in Command will be going to work for
B of A. So now we know how things work. They can destroy America and
average Americans all the while the big boys keep robbing and raping us
until America will be a Bankrupt nation.
My two solutions are that we enact a law immediately
stripping these people of every last dollar that they made and then exile them
to some third world nation where they belong. Secondly we freeze all
mortgages at the level of 5 and 1/2 % and fix them there. These two
solutions would do much to fix all of the present problems and they don't
require any complex or complicated solutions.