Friday, January 08, 2010
Reform of Wall Street
"Financial crisis panel seeks bankers' testimony" is the heading of a report by Binyamin Appelbaum in The Washington Post, Jan 8, 2010:
The commission appointed by Congress to examine the causes of the financial crisis is to hear testimony Wednesday from the heads of four of the nation's largest banks, as the panel begins a year-long investigation that its chairman described as an effort to figure out "what the heck happened."
Bloomberg.com: Treasury Secretary Timothy Geithner was asked to testify in Congress about the New York Federal Reserve’s efforts to limit American International Group Inc.’s disclosures of bailout payments to banks.
Bubbles and the Banks
And reform really should take on the financial industry’s compensation practices. If Congress can’t legislate away the financial rewards for excessive risk-taking, it can at least try to tax them.
Let me conclude with a political note. The main reason for reform is to serve the nation. If we don’t get major financial reform now, we’re laying the foundations for the next crisis. But there are also political reasons to act.
For there’s a populist rage building in this country, and President Obama’s kid-gloves treatment of the bankers has put Democrats on the wrong side of this rage. If Congressional Democrats don’t take a tough line with the banks in the months ahead, they will pay a big price in November.
They will deserve what is coming to them. Unfortunately, at the end nothing will change. One group of
venal legislators would be replaced by another.....probably even more venal.