Gretchen Morgenson: 3,000 Pages Of Financial Reform Still Not Enough

New York Times:

For decades, until Congress did away with it 11 years ago, a [34-page] Depression-era law known as Glass-Steagall ably protected bank customers, individual investors and the financial system as a whole from the kind of outright destruction we've witnessed over the last few years.

...

The two bills that the Senate and the House are currently chewing over as part of what may be a momentous financial reordering weigh in at a whopping 3,000 pages, combined.

Yet despite all that verbiage, there are flaws in both bills that would let Wall Street continue devising financial black boxes that have the potential to go nuclear. And even if the best of both bills becomes law, investors, taxpayers and the economy will remain vulnerable to banking crises.

Read the whole story: New York Times

Comments

[LivingDebtFree]

09:52 AM on 06/01/2010

3000 pages isn't enough to put all the loopholes, exemptions and tax breaks that they want in it...

[Nuyorican21]

09:29 AM on 06/01/2010

2 Page is whats needed.

pg. 1: Too Big To Fail Outlawed
pg. 2: Volcker Rule Reinstated

THE END.

[JPMac]

10:27 PM on 05/31/2010

The two clowns that were in love with home ownership and helping cause the realestate bubble writing fcl reform bill, what a fu%$ing joke!!!

[treetracker]

10:18 PM on 05/31/2010

It doesn't take 3000 pages to create financial reform - it takes 3000 pages to create exemptions to make their corporate masters happy.

[arnth01]

07:31 PM on 05/31/2010

Does it bother anyone that Barney Frank and Chris Dodd are the main players in this bill? God I wish people were more informed

[Politisizer]

06:07 PM on 05/31/2010

Until campaign financing is reformed no other reform is going to be done properly. Corporations don't sponsor politicians for nothing you know...

[treetracker]

10:26 PM on 05/31/2010

Exactly! The sooner all the special interest groups figure this out and band together along with everyday citizens, the better. We need a mass campaign every day until it's done. Start mid-June, Jul 1 at the latest and do a sustained campaign until they do it. HR 1826 is not strong enough - it's "opt-in" not mandatory. We need MANDATORY public campaign financing and nothing less.

[jsgaetano]

06:01 PM on 05/31/2010

Well that's what happens when they created 3000 pages of financial reform that doesn't include any financial reform.

[Lorianne]

11:08 AM on 05/31/2010

Wall Street's War
http://www.rollingstone.com/politics/news/;kw=[36899,157778]

Taibi's latest

[K.J. Dwyer]

11:54 AM on 05/31/2010

Thanks for that link. A great read and an absolute crystal clear evaluation of where we are in the process of financial reform.

Probably the best line of the whole piece comes toward the end of Taibbi's piece where he states:

"The problem is that sometimes, when things get really broken, the very concept of a middle ground between real people and corrupt special interests becomes a grotesque fallacy. In times like this, we need our politicians not to bridge a gap but to choose sides and fight."

To my mind, this is the crux of the problem. Both political parties are so pathetically beholden to financial special interests that the possibility of real reform is either receding to the margins of the debate or being outright obliterated from discussion. As Taibbi then correctly points out, Wall Street's "business as usual" will continue to exacerbate the fundamental problems in the financial sector ensuring a lot more pain for Americans in the near future.

[Schoolgirl666]

09:41 AM on 05/31/2010

We need Campaign Finance/Bribery reform.....

[McMurdo]

08:58 AM on 05/31/2010

The famed investor Peter Lynch listed a number of principles for investing success, one of which was:

"7. Before you make a purchase, you should be able to explain why you're buying. Specifically, you should be able to explain your thesis in three sentences or less. And in terms an 11-year-old could understand."

We could take a lesson from Mr. Lynch in how we legislate. How can a 34-page regulation from the 1930s protect our economy for 60 years from another great depression, but need a 3,000 page regulation to replace it? As other commenters have pointed out, the extreme length is only needed to provide myriad loopholes for favored interests.

It IS the role of government to regulate to protect the public interest. But this regulation should be done using broad, structural principles, not by micromanagement.

[castlerider]

02:13 AM on 05/31/2010

This was a shameful display of raw power by the banking industry getting their way in the end at the hands of a wimp push over of a president who doesn't even know the strength he has or the leadership he commands to be able to really make an impression that will last beyond just a few coming years, when he could have done it for generations, like FDR did.

The order of the day was to commit Banks to go back making their money lending like they used to and force this country to believe in itself instead of allowing these big players to continue to play this nation's wealth with Trading and too-often fraudulent products like Derivatives. Remember the 90's? A great economy where we actually wound up with a balanced budget. So what if it's a hell of a down size, bring back Glass-Seagal.

Just once I'd like to see this president really side on the side of average Americans and not let things turn out to where it's ALWAYS about the money. Disgusting.

Of course, Obama's staff is too stupid to realize his approval points are about to drop 15 points after this. Americans aren't the stupid morons the powerful in Washington would like us to be after so many years of worthless leadership. We pay a lot more attention now because we know we're about to lose everything.

[RonRutherford]

11:54 PM on 05/30/2010

3,000 pages of garbage that won't do a thing, I'm sure. All these politicians are bought and paid for. Any real change is an illusion.

http://therationalreport.blogspot.com/

[Bonaboman]

10:20 PM on 05/30/2010

My company does financial services (banks, credit unions, etc.) consulting and we have a couple of financial services software applications. In our business, we need to read and understand every regulation - 3000 pages worth is a nightmare for us to learn. The good thing is that in the end, we'll make a bunch of money and the banks will pass those costs on to consumers. However, in the end, this set of regulations will not fix the problems.

[Intolerantcentrist]

01:24 AM on 05/31/2010

So then, is it that we are incapable of designing a financial/economic system that it secure from crisis because we are blissfully unintelligent or is it because there are the influential who wish to profit personally regardless of the risk to the financial/economic system?

[Bonaboman]

10:41 AM on 05/31/2010

No; the point is that a 3000 page set of regulations that does not fix the problem is a waste of time. While there is no answer to, "how long should it be", any effective law needs to be clear, concise, enforceable, inexpensive, and pragmatic. There are so many loopholes for Rubin's buddies in the 3000 pages that another crisis will just pop up.

[arnth01]

07:28 PM on 05/31/2010

I love black cats, they are very wise.

[catbite]

09:59 PM on 05/30/2010

Read "13 Bankers." Over the years, bankers invented all kinds of scams that they called securities. Then they got the Congress, the Treasury, the Fed and the regulatory agencies to buy into the fact that these secruties were good for business. Letting the banks regulate themselves is like leaving a house full of children at home with no parents and the key to the liquor cabinet lying on the kitchen table. Washington allowed this to happen and the taxpayers took on the burden. Get this under control so that we can get back on our feet.

[iMissMollyIvins]

09:50 PM on 05/30/2010

If we took out all of the "loopholes" that allow the moneychangers to continue to defraud the people it wouldn't be 300 pages long, and it might actually protect We The People. Alas...