Four Ways We Need Obama's Help

There's an old country saying that the water won't clear up until you get the hogs out of the creek.

Like a dirty creek, this financial crisis might seem like a force of nature, but it's a man-made problem. The trouble we're in now is the result of years of willfully blind regulators and reckless business practices by some of the largest financial firms in the country.

The TARP program, which I opposed, pushed enormous amounts of taxpayers' money at the very firms that helped steer our economy into the ditch, and for now, our financial system has begun to stabilize. But too many of those firms are reverting right back to the same behavior that led to the collapse.

We're not going to clear up the problems on Wall Street until we hold those who led us here accountable and put new regulations in place to make sure it never happens again. And that's going to be hard to do.

The Obama administration inherited this problem, but they are proposing the new rules now.

You can contact President Obama now and help me push for real change.

As I see it, there are four main areas we need to address in order to restore confidence in our financial system.

First, there needs to be a full investigation of what happened and prosecution of those who broke the law.

Second, we need to enact new regulations to stop the kind of wild speculation that brought our economy down.

Third, we need to make sure regulators have the powers and resources they'll need to provide effective oversight.

And fourth, we need to get rid of the "too big to fail" philosophy at the Federal Reserve. If the biggest financial institutions are considered "too big to fail" then they are too big. Let's end this no-fault capitalism.

Customize a message to President Obama asking him to help push for these four important principles.

North Dakota banks had it right -- they didn't take crazy risks and they didn't see huge losses.

We need Wall Street to follow that model -- and given the greed that we have seen at the biggest financial firms, we need new rules.

Legislation to overhaul America's financial system will be coming up in Congress this fall, and we can't let this moment pass without making some lasting changes.

Weigh in with President Obama telling him you stand on the side of real change. I will be pushing for that change in Congress and your support will help.

It was just one year ago that the Lehman Brothers bankruptcy exposed the financial house of cards.

We can't settle for jump-starting our economy -- we need to fundamentally rewire our financial industry oversight practices.

Comments

[bioluminescence]

Too much talk on this blogsite and others about reforming Wall Street. Not nearly enough about Main Street, new industries and the jobs they will create.

[Flavor]

Look, you left out making sure that they make sure that jobs are created and that the american people are first in getting them. Now, what other country will hire me barely speaking enough of their language for their people to understand and don't get me wrong I love people but the fact remains these large corp. have opt out jobs for lower wages being paid in another country and then selling the product back to the american people with people you can't understand as your talking to them, I feel thats a disgrace to the human race, you take the company away to india in turn to make your biggest buck off of the american people. Now tell me what is wrong with that picture.

[darker]

The "wild risks" banks can continue to RISK ALL YOUR MONEY!
they now know for sure they'll be RESCUED on your tab while YOU CRASH.
wheeeeeeeeee! !

[Lynx234]

Sen. Dorgan is famous for standing against the Gramm-Leach-Billey Act in 1999, which repealed the Depression Era Glass-Steagall Act, and correctly predicted the financial crisis --he said 10 years (!)
http://www.youtube.com/watch?v=Q_hbezbsJ8s

[SilviaMaria]

The Glass-Steagall Act of 1933 established the Federal Deposit Insurance Corporation (FDIC) in the United States and included banking reforms, some of which were designed to control speculation should be reinstated again.

[SonofLiberty1]

Senator Dorgan,

Thank you so much for your work FOR keeping American jobs!

Yesterday, after speaking with a customer service rep from MLB.com (because I wasn't able to get the audio for the Red Sox, sadly, I found out that...

THE MLB CUSTOMER SERVICE WAS LOCATED IN....

MANILA!


So, Americans are not even good enough to work for Major League Baseball..­.America's Pastime?

[SonofLiberty1]

Senator Byron Dorgan is THE ONLY UNITED STATES SENATOR TO SPEAK OUT AGAINST
THE OUTSOURCING OF AMERICAN JOBS!

[Pablo175]

Does the dirty water and Hogs apply to Washington and Congress?

[Pablo175]

TARP worked. It avoided a catastrophe. Money's are being repaid.

Please apologize.

[SassySafrine]

Is there ANY activity, ANY legislation that Congress can do on its own? Do they want the President to do their entire jobs all the time?

We need new Democratic Congressmen. The ones we have are cowards.

[Count Baccula]

"Legislation to overhaul America's financial system will be coming up in Congress this fall, and we can't let this moment pass without making some lasting changes."

Sen. Dorgan has been one of the most reliable ciritcs of the current regulations; hardly grounds for calling him a coward. Furthermore, he stated he would be pushing for these changes himself. But this was not a letter to self promote, but one to push for party wide agreement, and that starts at the top; President Obama.

But letters to your own senators and congressmen would help too.

[BurtonOerney]

What changes? He's restating in an extremely general way what's already being debated. So we should write letters to congressmen saying, 'keep it up with Elizabeth Warren's committee?' 'Good job with getting rid of the Fed's list of tier 1 companies and the larger reserve requirements for companies above a specified size?' It's often hard to tell when people in Congress are trying to be folksy. Does he really not know that the opportunity he's talking about came when the regulation package was being put together?

[Sundialsvc4]

I've got a better idea, Senator ...

... why don't we contact YOU?

You see, Barak Obama is the CEO. He does not sit on the Board(s) of Directors. But, you do. He cannot write laws or introduce bills in Congress. But, you can.

Furthermore, it just so happens that the two Dakota states have been the recipients of an uncommon amount of ... attention ... from the "big twenty" banks who have located many of their operations there. So, I am quite sure that if one of the two Senators from your State start the actual process of "cleaning house," it will do more good than filling up Mr. Obama's in-box.

"This ain't no thinkin' thang," Senator: it's good, old-fashioned crime. Just with lots and lots and lots of zeroes attached.

So, let's do all the things you say ... but in your direction.

[Evil genius]

I think the senator, along with most lay-persons, are missing the point entirely. It's the US government's own policies which are to blame. Let me count the ways:

1. Laws that allow people to walk away from their mortgages if they are under-water. Loans should always be fully recoverable from the borrower, with the home simply serving as security. That will dramatically reduce the tendency to over-borrow for speculation.

2. The mortgage interest tax deduction. Very bad idea. Again, encourages people to over-borrow, and really go out on a financial limb. Repeal that. Dramatically increase the personal income-tax deduction from $3500, to $10-15,000 instead.

3. Don't encourage the Fed to keep monetary policy so loose. Not only will it cause serious harm in the long-run by causing inflation and destroying the value of money, but it encourages the kind of rash over-borrowing which caused these problems in the first place. Keep interest-rates higher to encourage savings. Allow some short-term pain to happen instead of constantly trying to postpone it. Things will be better in the long run.

Yes, perhaps some better regulation of the derivatives markets might help, but it's over-borrowing which is at the heart of the financial crisis. That's what has to be discouraged in the future, and so far, I see nothing being done about that.

[Sundialsvc4]

If we did not allow debts to be discharged with bankruptcy, then we would have to start building "debtor's prisons." I don't think we want to bring back "Oliver Twist."

If an asset has fallen dramatically in value, the owner should be able to re-negotiate his debt in light of this. But this is something that banks do not want to do. They would much rather have you default on "a $300,000 debt" than to re-price that debt at $150,000, because the pleasant fiction remains that "this house really is worth $300,000... the shmoe just couldn't pay for it." (A very good fiction to want to hold on to, if you sold $30 million give-or-take worth of derivative securities that are all ostensibly backed by that one debt.)

The bottom line here is this: "Rumpelstiltskin has left the building."

[Evil genius]

I'm not talking about bankruptcy or renegotiation. I'm talking about mortgages which are made on a "non-recourse" basis, where the lender can only go after the house, and by law, cannot pursue the borrower further:

http://en.wikipedia.org/wiki/Nonrecourse_debt

That's what encourages people to take too many chances. They know up front that in the worst case, they can walk away with few further consequences.

[rayy]

Some good points here, but do we really need an investigation to know what went wrong? Just read "the Baseline Scenario". Bad lending practices (not illegal), "too-big-to-fail" (how you stop that and still have "capitalism" is beyond me--force banks to split up when they get too big?) and legalized gambling (CDO's, etc.) are the cause. More and better regulation is the answer, but Republicans reject that.

[darker]

it's not "capitalism". It's BANKERS / CORPORATIONS SCAM painted as "capitalism".
SOCIALISM FOR THE RICH.
Zero for you. By the way: YOU get their bill for their lousy risks! LOL