07/19/2009 05:12 am ET Updated May 25, 2011

Clinton Labor Secretary: Obama's Wall Street Plan "Does Not Measure Up"

The plan doesn't stop bankers from making huge, risky bets with other people's money. It does increase capital requirements and oversight, but it doesn't require bankers to take their pay in long-term stock options or warrants, and it doesn't even hint that banks should go back to being partnerships instead of publicly held corporations. All this means traders still have incentive to place big and often wildly risky bets as long as the potential winnings are big enough, and top executives have very little incentive to monitor what traders are up to as long as the traders are collecting large commissions on the bets.

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