Three years ago we experienced the greatest financial implosion since 1929. High stakes gambling and risky bets gone bad on Wall Street left our financial system near collapse and our economy in shambles. This crisis had many causes -- all man-made.
And it affected every last one of us, not just the gamblers on Wall Street: $17 trillion in lost wealth, continued high unemployment nationwide, and one in four of America's mortgages still underwater, three years after the crisis.
The Volcker Rule, as embodied in Merkley-Levin provisions of the Dodd-Frank Act, is a critical part of the effort to put in place financial rules of the road that will prevent another crisis like the one we experienced in 2008.
Put simply, the Volcker Rule takes deposit-taking, loan-making banks out of the business of high-risk, conflict-ridden trading -- leaving that to the hedge funds, if they choose to do it. The reason is simple: our banking system and our economy do better if bad bets blow up only those who make the bets and not the entire banking system that fuels economic growth and job creation.
The regulators tasked with implementing the rule came out with a proposal on October. That proposal was a step in the right direction, but far too timid. The Merkley-Levin provisions set out to fundamentally reshape our financial system, creating a strong wall around basic, low-risk financial services that serve customers and grow the economy. The proposed rule creates unneeded complexity and confusion, tying itself in knots trying to protect nearly everything the banks can do today. The rule should not be as vague or complex as the regulators are making it. And it should be implemented now.
Yesterday, the big banks on Wall Street weighed in, and their response is all too familiar. They want big loopholes in the rule that can be exploited to continue business as usual. The problem is that business as usual may be good for big traders on Wall Street raking in big bonuses in good times and bad, but it is decidedly bad for folks in Oregon and across the country that are still struggling due to the financial crisis.
We need a system that lays out clear rules of the road, one that will implement bright lines separating old-fashioned banking -- making loans to businesses and families -- from high-risk trading. "Financial innovation" is all well and good, and people should be free to place big bets on Wall Street. But those bets shouldn't imperil the real economy on Main Street when they go bad, and that's what the Merkley-Levin provisions are supposed to protect against.
Nobody wants to repeat the financial collapse, the bailouts, and the economic hangover we continue to suffer. So we can't afford to repeat the unfettered risky betting that contributed so much to them. The American people have weighed in on the Volcker Rule, and now the regulators must do their jobs -- implement the law to ensure that we have the proper rules and limits in place so that our financial system can once again be an engine for real prosperity.
Follow Sen. Jeff Merkley on Twitter: www.twitter.com/SenJeffMerkley
Mike Lux: America's Biggest Banks: Poor, Poor Pitiful Us
Jonathan Weiler: Republican Nonsense on Regulation
Volcker Rule Faces Harsh Critics as Effective Date Nears - Bloomberg
The Volcker Rule and the Costs of Good Intentions - NYTimes.com
Volcker rule definition from Financial Times Lexicon
U.S. Volcker Rule to Increase Financial Risk, Critics Say ...
To me, the key comment of Merkley's is, " ... bad bets blow up only those who make the bets ..."
"That is so insider"
Former Speaker of the House Nancy Pelosi attempting to dismiss Jon Stewart's very clearly stated concerns on the mutation of the "Anything-but-Glass--Steagall - Volker Rule" which began as less than ideal, and has now become a three hundred page monstrosity of purposeful complexity and exemption.
"Outstanding" segment from Comedy Central's "Daily Show with Jon Stewart"
http://www.thedailyshow.com/watch/wed-november-9-2011/nancy-pelosi
Further information on the corruption of the Volker Rule:
http://www.nytimes.com/2011/10/22/business/volcker-rule-grows-from-simple-to-complex.html?pagewanted=all
From the Article:
Former Senator Ted Kaufman expresses the desperation of many in simply and logically calling for a restoration of Glass-Steagall:
"I don’t know if this Congress will address this," Ted Kaufman said. "I won’t try to forecast. But I believe from the bottom of my being that we’ll eventually have to restore Glass-Steagall. The only question is, How much agony do we have to go through before we do it? We know the solution, but do we have the will?"
As it stands now. It seems that the regulators are making a comfy bed for themselves for after they leave government service. These people need to investigated for impropriety or worse, by a judicial system that punishes criminal behavior when it is found to exist.
All of the pensions and 401(k)'s would've turned worthless, but, still would've been able to buy the very same stocks the very next day for pennies-on-the-dollars.
That's how even unfettered "free market" capitalism is supposed to work - you lose you're bankrupt.
Instead, the American taxpayers were turned to SUCKERS and pensions into losers while TBTF stepped out of the way and allowed the collapse, three years ago, fall on the public.
The Volcker-Rule is nothing but an excuse to not restore Glass-Steagall.
Even Glass-Steagall is not enough, now that so much damage was allowed to happen to American "savers" who, again, provide the "capital" to invest in rebuilding the economy.
A new Hamiltonian Credit System is needed to unleash what ever amount is required to not only rebuild but to center the economy around the future in space.
Fixed-exchange rates to ensure against wreck-less " money printing" is also in order.'
However, before any of these solutions can start, TBTF has to be taken into RECEIVERSHIP/BANKRUPTCY reorganization.
Which means the tiny group of ultra-rich "Buffets" etc. lose their shirts but so what?
Tim Geithner is leaving the Treasury Department soon.
NOBODY IS A BETTER REPLACEMENT THAN VOLKER.
Whoever is second in command over at the Treasury Department can run the outfit.
WHAT WE NEED MUCH MORE, is a fulltime, high-visibility, high-credibility
National Economist-in-Chief going around the country non-stop educating the public
. . to disabuse those who can be educated about simple plain sense fiscally sensible, and conservative economics, similar to Eisenhower's.
SHORT ESSAY ON EISENHOWER's ECONOMICS
http://www.zipz-services.com/public/The-Economic-Policies-of-the-Eisenhower-Administration.htm
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Thanks to Ron Paul, and his ilk,
AND their opposite, mirror-image lunatics on the left
, , we now have an Army of DrugStore Economists
POLLUTING THE PUBIC CONSCIENTIOUSNESS, with all kinds quack economic theories