Friday, December 11, 2009

Update on Financial Reform Legislation

While certain pro-Federal deficit positions taken at New Deal 2.0 have met with disapproval at this site, thinking on the recent and ongoing financial crisis makes a lot of sense from true reformers of many political stripes. Here is a link to a Naked Capitalism post that summarizes some of what is going on in Congress on this topic and proposes (futilely, one suspects) improvements:

Financial Reform, or Rearranging Chairs on the Titanic.

(by) L. Randall Wray is a professor of economics and research director of the Center for Full Employment and Price Stability at the University of Missouri–Kansas City and writes for New Deal 2.0.

Note that the brilliant William Black is also a professor at the same university.

Here is the general topic:

Congress is nearing completion of its financial reform bill HR 4173 (Wall Street Reform and Consumer Protection Act of 2009), which appears to amount to shifting chairs on the deck of the sinking Titanic. The monstrous legislation is too big and too complex to analyze in a short blog. Instead I will discuss three areas in which Congress is failing to address the real issues: dangers posed by derivatives, the folly of bailing-out troubled “systemically important” institutions, and reformation of credit ratings agencies.

It's a good read, though it won't "make your day".

Copyright (C) Long Lake LLC 2009

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