Obama Nudges Congress To Empower Regulatory Units

WASHINGTON — President Barack Obama said Tuesday he hopes "it doesn't take too long to convince Congress" to approve new authority to oversee big, tottering financial firms.

The administration is pushing the idea of an overarching regulator, such as the Federal Reserve, to have the ability to take over nonbank financial entities whose failure could topple the entire banking system.

Treasury Secretary Timothy Geithner is expected to detail the administration's proposal for a broad overhaul of financial sector regulations during testimony Thursday before the House Financial Services Committee. Along with the new regulating authority, the administration wants increased oversight and controls of previously unregulated markets such as hedge and private equity funds.

Those funds also are expected to be a chief target of discussions between Obama and fellow leaders of the Group of 20 major world economies next week in London, at a summit on the global financial crisis.

Obama told reporters, after an Oval Office meeting with Australian Prime Minister Kevin Rudd, that his administration is "very confident" that the U.S. will work in concert with those other nations to stabilize global financial system. French Prime Minister Francois Fillon said earlier Tuesday that the U.S. and Europe agree on the need for new international regulation of hedge funds and also for rating agencies and reforms in international accounting standards.

There have been indications the United States is at odds with some countries that want to focus more on financial regulation than on government spending to stimulate their economies.

Obama said he expects the G-20 meeting will produce a framework for broad financial regulation, but that specific issues won't be settled right away.

Comments

[maxdenn]

Give President Obama the tools he needs. Unlike the former president, this preident I trust not to abuse power. GWB should have been impeached and he and his veep should be facing criminal indictments. Hopefully that will happen.

[wdw505]

congress can not give rights they don't have the power to give

[DACC]

I just perused this entire page
It's official Arianna
you have produced a right-wing blog
congrats!!

[ultrabop]

LOL

[RightWingMarine]

because more govt is the solution to everything. Not just more US govt but by giving away our national soverighnty we can have an intl govt dictating life to us.

[WLA]

Yeah because that is what- well... who is saying anything of that sort again? Oh right, nobody.

[ultrabop]

As in Iraq and Afghanistan and Pakistan? Are you smoking some good ganja these days? How many people have you smoked?

[Rage Against The Machine]

I'm a left wing militant pothead.

How you like me now?

[Lavafalls]

Cool

[kasinca]

What do reichwingers know about government?

[HonorJusticeTruth]

Better them than you.

[RightWingMarine]

yeah, you know those crazy Libertarians what to control every aspect of our lives

[sarabono]

But the Gov. did have the Power of Oversight to regulate Fanny & Freddie and they didn't.

Google OFHAO - Office of Federal Housing Administration Oversight - download the pdf and look at the numbers in there last report before there name was changed.

Fanny & Freddie purchased tremendous amounts of Low Doc, Alt A and No Doc Mortgages
under Clinton's former budget director - Franklin Raines - when he was head of Fanny.

Fanny & Freddie's job is to provide liquidity to the mortgage market but with sound fiscal judgement. They failed big time. Tax payer losses so far $100 Billion and they have asked for a second $100 Billion !

Oh, talk about Salary and Bonus? The heads of Fanny & Freddie make more than the President. On top of that, they and indian chief under them are scheduled to receive over $400 Million of bonus funds, far in excess of AIG's payout.

[sarabono]

OFHAO is a Federal Government Agency as is the follow on agency.
It has around 100 Federal employees.
OFHAO's total job was to oversight and regulate Fanny May and Freddie Mac.
They report to both the Senate and the House Oversight Committee's.
The Oversight Committee's are headed by Barney Frank in the House and Chris Dodd
in the Senate.
Barney and Chris have been the Committee Chairman of there respective Committee's since January 2007.
In late 2008, both Freddie and Fanny were nationalized and given $100 Billion to cover there losses and to reorganize. They have recently asked for another $100 Billion.
Fanny and Freddie hold 53% of all the home mortages in the United States.

[Carolab]

Quit pointing the bony finger of blame at the Democrats. It was Bush and Martinez.

[Badfickle]

Yes but how many of those mortgages that Fanny and freddy hold are in default? A much smaller percentage than those held by private banks. Private banks have default rates more than three times as high.

[Carolab]

They had a very weak oversight agency until Frank took over the chair in 2007.

The primary problem with Fannie and Freddie was that Bush started pushing for more subprime purchases. You can see that before that time the numbers were about as low as they were under Clinton; once some stronger oversight was put into place by Frank the numbers went down again. The problem was Bush's Home Ownership Initiative --and Republican Mel Martinez was the HUD Secretary when Bush announced it in 2002.

And Fannie and Freddie get way too much attention. It was the private lenders who caused all the trouble. The GSEs had relatively little to do with the subprime crisis, because the Federal standards to receive the Treasury's low-interest funds are much stricter in the first place. It's a red herring to direct people's attention away from the real culprits--the commercial lending institutions.

In 1996, HUD directed the GSE that at least 42% of the mortgages they purchased should have been issued to borrowers whose household income was below the median in their area. This target was increased to 50% in 2000 and 52% in 2005. From 2002 to 2006 Fannie Mae and Freddie Mac combined purchases of subprime securities rose from $38 billion to around $175 billion per year before dropping to $90 billion.

[Badfickle]

Fanny and freddie are not the major reason for this problem. A large majority of the defaulting loans were made by, and securitized by private banks. In fact private banks have default rates more than 3 times that of freddie and fanny. You are right in this respect however, fannie and freddy need to be better managed and watched over by the government.

[venusvictrix]

Put the Federal Reserve in charge? Why don't we just outsource the job to the Papacy in Rome?!? Then we can just sit back and trust in our faith that all will be handled for our best interests.

As I mentioned earlier, in response to Julie Satow's article, AIG's Six Year Saga Of Alleged Frauds,

"(The AIG) situation illustrates the hopelessness of regulatory oversight as any type of solution for the long-term. It"s clear that such "oversight" merely provided the cloak of secrecy for fraud and deception to persist and proliferate until the bloated beast imploded like a supernova, blowing a potential black hole in the center of our financial system."

I think the point is worth repeating, particularly since the AIG fiasco is only one instance in a long string of failed oversight events. In fact, the list of failures is so long at this point that it is difficult to believe that they were accidental at all.

In a real "accident", the captain goes down with the ship. But what we are currently witnessing is massive wealth transfers to all the rescued captains of sunken ships.

We must be diligent and demand that any overhaul of financial regulations is not mere pageantry.

[CigarStoreIndian]

The market has notably plunged since Mr. Obama introduced his budget
and that should be no surprise. The document was a
declaration of hostility toward capitalists across the economy.
Health-care stocks have dived on fears of new government mandates and
price controls. Private lenders to students have been told they're no
longer wanted. Anyone who uses carbon energy has been warned to expect a
huge tax increase from cap and trade. And every risk-taker and investor
now knows that another tax increase will slam the economy in 2011,
unless Mr. Obama lets Speaker Nancy Pelosi impose one even earlier.

Meanwhile, Congress demands more bank lending even as it assails lenders
and threatens to let judges rewrite mortgage contracts. The powers in
Congress -- unrebuked by Mr. Obama -- are ridiculing and punishing the
very capitalists who are essential to a sustainable recovery. The result
has been a capital strike, and the return of the fear from last year
that we could face a far deeper downturn. This is no way to nurture a
wounded economy back to health.

Now, Congress (those worthless mutts) is busy admonishing AIG for mailing out the bonus that they stuffed into their stimulus bill and voted for. Anyone who thinks these cats are doing a good job is dingy dao (crazy).

[WLA]

You really need to detatch from Rush's teat once in a while.

[Lavafalls]

Is that the same as the elephant and the Banker?
http://imgs.sfgate.com/n/pictures/2009/03/20/koraya2.jpg

[CigarStoreIndian]

Excellent points you made. I learned a lot.......thanks

[Badfickle]

have you ever stopped to think that maybe the market tanked because the previous administration left the economy in ruins? I don't know just a thought.

[TioNed]

US taxpayers bailed out the bankers arses, we own them. They should do as the taxpayers want, it's OUR MONEY. Get it?

These same brainiacs cratered my 401(k) and underwrote jillions of overvalued mortgages and credit default swaps, now I'm supposed to pay homage to them because they might "go Galt"? Fc** them.

You are confusing speculators with genuine capitalists (such as myself) who want to produce goods and wealth instead of believing there's a miracle fast buck Carlton Sheets infomercial solution to everything.

BTW, Cartman was wrong about mee krob.

[Revelation1118]

Just as the New Deal would likely not have been possible without the Depression as its catalyst, Mr. Obama's attack on income inequality would face a much tougher row to hoe were it not for AIG and all it represents.

The era that spanned from Franklin Roosevelt to Lyndon Johnson was one of RISING REAL WAGES THAT CULMINATED IN THE MOST EQUAL DISTRIBUTION OF WEALTH in U.S. history. Is that history about to repeat itself?

"There's nothing wrong with making money, but there is something wrong when we allow the playing field to be tilted so far in the favor of so few," states Mr. Obama's proposed budget, tabled last month. "We need to remember that throughout our history, the United States has grown and prospered when all Americans have shared in the opportunities created by our economy …

The past eight years have discredited once and for all the philosophy of trickle-down economics - that tax breaks, income gains and wealth creation among the wealthy will eventually work their way down to the middle class. In its place, we need economic opportunity to trickle up."

KONRAD YAKABUSKI
http://www.theglobeandmail.com/servlet/story/RTGAM.20090321.wcoessay21/BNStory/specialComment/home

[ultrabop]

Bravo!!!

[WLA]

RIGHT ON.

[TioNed]

"There are those who believe that if you just legislate to make the well-to-do prosperous, that their prosperity will leak through on those below. The Democratic idea has been that if you legislate to make the masses prosperous their prosperity will find its way up and through every class that rests upon it."

William Jennings Bryan, 1896

Five will get you 10, Obama has read that speech.

Unfortunately, like Al Smith, W J Bryan went conservative in his old age and decided to have a debate about Darwinism with Clarence Darrow..

[Rage Against The Machine]

The troIIs act like corporations have constitutional rights.

[CheshireCat2]

The individuals inside those corporations do. It is called a Bill of Attanider

http://www.techlawjournal.com/glossary/legal/attainder.htm

[CheshireCat2]

^ attainder

[ultrabop]

In a fascist society that is the case.

[Badfickle]

Actually.... in one of the worst decisions the Supreme Court ever made was the 1886 case Santa Clara county vs. Southern Pac railroad, the Supreme Court ruled that udner the 14th ammendment corporations had the same rights as people. it's totally insane but true.

[CheshireCat2]

New Main

[williamg]

Good news - Reality check:


http://www.pollster.com/polls/us/issue-rdwt.php

[DrPneumann]

Why is President Obama blocking criminal investigations that would implicate Dick Cheney in criminal war activities? Better yet, why is no one talking about this?

http://rawstory.com/news/2008/Turley_Obama_get_low_grade_on_0324.html

[Gunwing]

News flash:

It's not Obamas job to waste time and money too prove that Dick, and Bush broke the LAW. Right now it's more important to get the credit flowing agian. Also you should know by now that the LAW has already "did you miss this?" Called on Rove to testifiy before congress, "after dragging him into court when he did not show up the first 2 times", The LAW will get it right it's not the Presidents job to over see the law like the GOP wants you to think.

His job is to make the big choices "war, or no war, help or dont help" The people are the ones who should be out right now in court and sewing Bush, and Dick for breaking the LAW.

[TioNed]

A better question is, why was GB43 able to visit Canada and not be arrested under Canadian law? (the law explicitly states that suspected war criminals not be allowed into Canada and must be arrested if they do enter)

[chaz]

Obviously!

[ultrabop]

How about we need to regulate congress to stop taking bribes from corporations?

[Lavafalls]

How about we regulate corporations to stop offering bribes to anyone?

[ultrabop]

Like who? The police? The military? The dog walker?

[WLA]

Do you have proof of "bribes?" Just wondering.

[ultrabop]

It's called lobbyists giving money to the campaign chests of senators and congressmen, who then support bills that financially enhance the corporations that the lobbyists work for. You haven't heard of this? It's an old mobster trick.

For starters, Boehner, who is currently the chairman of the House Committee on Education and Workforce, once handed out tobacco industry PAC re-election campaign contributions on the floor of the House. More recently, the Center for Public Integrity could identify 14 former staff members of Boehner's, who currently work for major K Street operations.

Have you heard of K Street?

http://projects.publicintegrity.org/lobby/report.aspx?aid=780

[VPN]

Ya, like I was gonna say to Republican Congressman Cunningham and Republican Senator Ted Stevens a while back, oh wait, never mind.

[Badfickle]

Obama has done something very interesting with the stimulus money concerning lobbyists. He signed an executive order barring anyone in the exec branch from speaking directly to lobbyists concerning money from stimulus. If a lobbyists wants to contact someone in the exec branch they have to do so in writing and that letter will be made public within 3 days.

The lobbyists are as you might imagine FURIOUS.

Why not a similar law about lobbying congress. Make all contact between lobbyists and congressmen PUBLIC.

[Rage Against The Machine]

President Obama has won the right to implement decisions as he feels fit.

So zzzzzzzzzip it.

[ToL1]

The President is not above the law.

[ultrabop]

According to the Boosh Doctrine, he is.

[dave1111]

The President is not above the law, but AIG is.

[TiffanyHusseinBanned]

(-)

[CheshireCat2]

Watch this one.

[WLA]

Not anymore. Your hero sure thought he was though.

[cjt1957]

Dern that evel old Constitution....

[CheshireCat2]

More like to he-ll with the Constitution

[WLA]

Is that your Bush impression? Very good.

[scottaa]

How many times did you use that line during the Bush presidency?

Maybe your name should be more like, "Whatever You Want, Dear Leader".

[LCLiberal]

Watch the populist anger turn from Obama to the Republicans sure to stand in his way of more financial regulation.

http://www.political-buzz.com/

[breakingnews]

It laready is here in my neck of the woods. The people of MI are hurting and all we see if Boehner the crybaby shaking his head. Even my Repubs friends are willing to give Obama the benefit of the doubt and want this to work. 2008 will look like a rousing success for the Repubs if they do not get their act together by 2010.

[WLA]

There is no populist anger to turn FROM the President. Despite the di.t.t.oh.eads that think they are relevant here, he is enjoying very high approval ratings.

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