Barney Frank: By This Summer We Will Have New Regulations Comparable to What FDR Did With the New Deal
By Heather Thursday Feb 12, 2009 11:30am
Barney Frank visited the set of the Rachel Maddow Show to talk about the TARP hearings and at the end of the interview he said something that was music to my ears.
Maddow: Should they be constrained from doing those things by rules rather than just being shamed for when they don't do it?
Frank: There's no question about it for the future. Look there's a problem in the American system and we as liberals should be honoring this. The principle that you don't go back and do things retroactively is a very important liberal principle so some of the things that the Bush administration let them do we can then undo. We can prevent them from going forward and this I can guarantee you.
We will very soon be adopting a set of regulations. We're going to be doing essentially now what Franklin Roosevelt had to do in the New Deal, what Theodore Roosevelt and Woodrow Wilson had to do around the turn of the last century. There is a whole lot of new financial activity that's going on and it's caused some damage and done some good, but it's gone on without rules and the one thing I am most confident about is we know how to stop this from happening again. Banning the bad subprime loans. Restricting the excessive kinds of leverage they've had.
Yeah, this is a very high priority for us and I think by the summer we're going to have a set of rules in place. It's going to be comparable I think to what FDR did with the New Deal, with the Securities and Exchange Commission and other rules. We will not depend on their good will. We will put some tough rules in place.
All I can say is I hope he means it, and that he follows through on what he said tonight. I don't know much about economics. It frankly bored me and was just never something I took an interest in. But I'm not a stupid person and I know after watching the 60 Minutes segment A Look at Wall Street's Shadow Market that if we didn't do something to regulate Wall Street that nothing was going to improve in our economy because there would be no trust of our current system.
I make that assumption because I don't trust it now and I'm probably like a lot of other people out there who thought they were spreading their risks in their 401(K)s, if you were lucky enough to have one, and watched it tank by close to forty percent over the last year. For anyone close to retirement age like a lot of my co-workers, those sort of losses are just devastating. You think you're doing the right thing and trying to prepare for retirement and poof, years and years of savings just vanished in a matter of a few weeks or sometimes a few days. I watched friends walking around in what was close to a state of shock when the market crashed.
So I welcome Barney Frank's talk of regulating these markets. I think it's overdue, and this summer could not come fast enough if that's when they try to get it through. For contrast, here's your standard talking head on the "news" saying 'thank goodness Tim Geithner didn't come out with any crazy talk about regulating this mess'. Yeah, that's the ticket, Joe Johns. Forget any regulation that might stop these industries from continuing to cook their books and leverage themselves in a way that would put a regulated insurance company out of business.
As John said before, and I'll repeat it for him: ....Why aren't there hundreds of economists on my TV explaining the stimulus package? And why am I seeing people like Joe Johns tell us what we should think of regulating the industries that drove our economy off the edge of a cliff?
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Does the Treasury plan on doing a meticulous audit of the bailed out banks?
Because, if not, we are being flim flammed.
Amy Goodman with James Galbraith.
Here is economist James Galbraith: Bailed-Out Banks Should Be Declared Insolvent
Here is economist Joseph Stiglitz: part of Wall Street's strategy is the make sure we lose. 'The Banks are insolvent'.
Here is Nouriel Roubini: 'The Banks are insolvent'.
Who are you going to believe these three (and others), or the Banksters best buddy, little Timmy.
What FDR did with the banks was AUDIT them!
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And by then, we will have given the Plundering and Blundering Banksters ALL of the money in the known universe, and then some.
Here in the NYT Gretchen Morgenson reports there are likely $15 trillion in non offsetting Credit Default Swaps that may go bust with the scenario of ongoing defaults.
Here is the follow up 60 minutes story from Oct 26, '08.
Here is the 60 minutes story from Dec 14, '08 about the next wave of defaults, alt A and option ARM. The subprime wave was about $1 trillion, the next wave will be about $1.5 trillion.
Here is a previous comment I made explaining how each dollar lost in the risky mortgage segments can be multiplied by 10, 50 even 100 through the magical implementation of Credit Default Swaps and synthetic CDOs. The Derivatives from hell which little Timmy G keeps paying at face value with our money.
The Fed and the Treasury have already committed $9+ trillion, spent $3+ trillion and on Tuesday Geithner pledged what could another $2.5 trillion. It will be over $20 trillion before they are done.
By that time we will be the largest banana republic in history.
Barney Frank talks a good talk but he has already stood at the barn door while ALL of the horses ran out.
Regulations will be terrific the next time we have a country with an economy.
The Banksters should be receiving SUBPOENAS not trillions of our dollars.
How about an audit of the Federal Reserve?
I read Alice X's post and thought the same thing, of course her point is right too. But the FED, largest holder is JP Morgan, private company, never audited, tax exempt, and gets to charge us interest on our money? WTF should we have to ever pay interest in our money?!?! Money USE to have intrinsic value under the gold standard but now it is a debt to the people.
Well the people are not getting fooled so easily now, Geithner's vague presentation was so bad Goldman Sachs called a meeting to figure out how to fix the problem.
Geithner's Bank Plan Led To Hasty Goldman Meeting
http://www.cnbc.com/id/29163525...
I have a solution for Goldman's, drop dead, let the banks fail.
.... of December 22, 1913 is at the root of all of this. JFK was in the process of issuing US treasury printed money in 1963..........., making the Federal Reserve printed money obsolete.......
This scheme is almost 100 years old. It is finally breaking the back of the US.
Todays USD is worth 4 cents in 1913 currency. The bubble has burst. We haven't even begun to see the result of this disaster.
No encouragement for the system to stabilize until this summer, about the time the economy takes up the slack from deleveraging (if we're lucky), as people move into their cars, and rummage through dumpsters for food, then the pols can begin to 'look good', we can wait to see how things go, diddle around, watch unemployment tank, hear people pleading to Obama to do things (he'll refer them to staff), start up the soup kitchens, and tent camps, then maybe see if things will fix themselves.
wanna bet....
Congress gets paid by big business. How can they regulate their
bosses? It can't work. Sorry. Change campaign finance first or
all of this is for not.
Damnit Barney. Executives got tax payer dollars as bonuses and you need to take it back. Force them to release it. It was misspent.
Frank: "The principle that you don't go back and do things retroactively is a very important liberal principle..."
Since when do wishy-washy doormats have principles?
democrats to learn how to frame the discussion
all a regulation does is force industry into paying their own bills, regulations almost never arise from whole cloth, they are almost always there because industry created an issue, refused to address that issue, they wanted us to pay for their costs and so we had to write a regulation
manufacturers and auto industry was pouring their bronchitis in my kids air and their cancer in my wifes water, bing the epa (from that ultra liberal, richard nixon)
nor do regulations cost us money, overall they lower the price of goods when you consider the other costs we would have to pay had that regulation not existed
more here;
http://oxdown.firedoglake.com/diary/782
and a big part of the framing concerns rejecting the republicans' "regulation v. deregulation" framing.
the right does not want to deregulate the market anymore than the left. yet, they have successfully spun their upward-income-flowing regulations as "deregulation"
it fits into the rightwing myth of a "free" market--and for some reason a lot of liberals accept the "free" market fairy tale...
signed,
broken record
sorry, with the neoliberals, "centrists", corporatists and obstructionists in the govt y'all have to forgive me for not believing this...
but, i sure hope it is true...
You can't apply arbitrary remedies that went against what the New Deal stood for, i.e. trillions of dollars of our money transferred to the bankers no questions asked.
And then claim to use the same New Deal-inspired approaches. It seems to be a very convenient way of nitpicking. Completely subverting the meaning of what the New Deal stood for.
Besides, even though the New Deal was a relative successful approach dealing with the problems the FDR admin was facing. I would suggest that the current politicians stop milking their predecessor's hard work, and they do their god damned jobs.
I want solutions for the current problem. That takes time and effort to a) understand the problem, and b) try to solve the problem.
Simply referring to previous successful approaches struck me as a display of incredible mental laziness...
good points, as usual
this is the New New Deal.
Perhaps it should be called...Elitist Fuckup Cleanup Redux.
At least the robber barons in the old days went to jail...or had the strength of convictions and sense of personal responsibility to off themselves.
Not this group of thieving bastards. They want to cry and ask daddy for more money...because..."oohhh...we're too big and rich to fail...it will destroy the economy...the fundamentals of MY economy need to remain strong....otherwise...my wife won't blow me...the prostitutes won't service me...my kids will hate me..."
good points, as usual, part deux
All the millionaires & billionaires had a pretty good life back in the 50s when Eisenhower was in office, and they had a top marginal tax rate of 91%....
The 'greed is good'/free marketeer/tax-cut/supply side hocus pocus nonsense is destroying the country, it was put into overdrive with Reagan and this country has been on the wrong track since...
I'd do handstands if they follow through with it...
But you have to have the balls to do it... Yeah, the corporate media is in the bag against you, but they don't elect you....
CNN apparently listened to Amato and Media Matters and decided to allow an actual economist to be quoted.Too bad he was from the Heritage Foundation-a right wing think tank.It was also too bad they didn't bother mentioning that rather pertinent fact.
Its clear as glass that CNN and the rest of the major media outlets are actively and relentlessly pushing right wing talking points and actively undermining this stimulus package.Now that the Left has some actual power,it needs to wielded in the direction of shutting down this garbage one way or another.
i always knew that my ira was funny money...but i still prayed that it would be there to assist me if i ever could afford to retire
well now it isnt...i can never retire, and if wallmart is still around, im gonna be a 90 year old greeter...just so i wont have to eat dog food
... show me the money.
All I've seen so far is a whopping bill that's come due courtesy of both the Republicans and the Democrats.
Bank executives? Baaaaad boys. Here's your bonuses.
Salmonella boy? "I'm taking the 5th."
I would have more faith in your schemes if you first gave back the money lost in people's 401K plans.
I mean, these millionaire bankers can go a few months without pay without it hurting their way of life but many who saw their assets go down the drain cannot.
Just sayin'.
I contributed to my company's 401K plan as a responsible adult, planning for my future. I even tailored it according to how much risk I was willing to accept.
Now, it's people like me - who have worked hard for years and done the 'right thing' by investing - who are looking at a bare cupboard when it comes to retirement.
The dunderheads responsible? They get million-dollar bonuses for their 'hard work.'
We have all the answers...
Its time to look at what other nations have done, to make their nations better, look at how they balance nationalizing assets & allowing the 'market' to prosper, how they provide healthcare, how they provide energy & environmental incentives, how they regulate industry & corporations, how their tax system functions.
As with traveling, the mind broadens, time for our leaders to do the same and bring the best of what they've seen back to this country and put it back together again. As Bernie Sanders reminds us...
the executive pay caps....Outrageous...Call them and tell them it is not acceptable...1.800.828.0498... Plus call the local offices of your senators and congress people...!!
just read that Congress stripped the executive pay restriction out of the stimulus Bill.
Are we to beleive that the representatives are really for the people!
Call them and tell them to do the right thing
You state clearly you have no understanding of economics and then make an opinion based on no economic theory at all.
Sorry kiddo, but regulation is a tool like any other. Regulation only helps the big guys and hurts the small guys in large amounts. It creates barriers to small business while only becoming an annoyance to the big boys. Too little and the big guys destroy themselves on an eventual bad bet, too much and you get 2 or 3 mega-corporations running everything because they are the only ones that can afford to stay in compliance.
You need to re-evaluate your thinking before giving your opinion to hundreds of thousands of impressionable readers that are not versed in economic theory.
so, you are saying that any and all regulations are harmful?
do we have ourselves an honest to goodness free market advocate? not one of them "free" market monkies?
"Too little and the big guys destroy themselves on an eventual bad bet, too much and you get 2 or 3 mega-corporations running everything because they are the only ones that can afford to stay in compliance."
I'll settle for "just enough" regulation to keep companies and government on the up and up.
This guy is crisp, amazingly intelligent and well read. He's a warehouse of knowledge.
I'd say he would vie for the top legislature in Washington today, certainly among congressman and senators his age or older.
but he is bought and paid for by the Wall Street Banksters.
When it came to the bailout he was for it.
The taxpayer safeguards were a hoax.
"... he is bought and paid for by the Wall Street Banksters ..."
Can you provide come links or some type of data to back up your claim? I'm not saying you're right or wrong. I'm just interested in knowing more why you say what you say.
By definition, the fact that a politician is a politician is a strike against him. But I would like to know more.
I found this:
http://www.opensecrets.org/politicians/summar...
but to be honest, though the chairman of the House Financial Services Committee gets donations from banks isn't flattering, it's not definitive proof to put him in the "coporate lackey" category. Every politician in Washington gets big money. I don't like it at all. But there are good ones who get it and bad ones who get it as well.
In the top 10 contributors to Obama's campaign, you'll find Goldman Sachs, JPMorgan Chase, and Citigroup.
http://www.opensecrets.org/pres08/contrib.php...
Immediate action to solve the most important problem (regulation)....nil!
Rewarding the individuals most responsible for the problem...sure! They run the show, or the show doesn't go on without them!
Barney isn't hurting financially and he's a member of THE CLUB therefore, he checks which way the wind is blowing and takes it to his back. You won't hear him talking about credit default swaps, or distributions directly to the people, so as a good communicator he chatters a good line, as he sails along with the rest.
How he votes tells you everything!
Securities & Investment $224,000
Real Estate $219,851
Insurance $199,548
Lawyers/Law Firms $185,728
Commercial Banks $114,700
Equals $943,827 out of $2,202,677. You might question the relationship of Lawyers/Law Firms but the others are a virtual certainty as having to do with his position.
There is no definitive correlation that one can ever infer.
As cordandwire correctly observes, look at the votes:
Regulation = zip
Bailout = yes
Genuine taxpayer safeguards = zip.
The 'Bailout' bill which turned out be over $800 billion was done WITHOUT public hearings or the testimony of expert witnesses.
A package larger than the entire six year cost of the Iraq 'war', thus far, was rushed through in two weeks.
This is a guy who talks a very good talk, he is very bright and he covers the angles.
The most basic thing he should have done but did not do was to demand an audit of institutions seeking public money. It has not been done to this day, it is completely rudimentary.
Economists as diverse as Galbraith and Stiglitz are saying that the banks don't want us to know the facts. Galbraith goes one step further and calls it fraud. See my first post.
Sure you will Barney. And Conyers will still be attempting to get Rove to testify, and Reid will be writing sternly worded letters, and Pelosi will still be tableless, and, and, and.......
A smack down?! I'm sorry but news in America is garbage.
Absolutely no disrespect to Joe Johns but what are his qualifications to comment on economic and financial issues?
I have a graduate degree in Computer Science and this is like asking me for medical commentary on the advantages and disadvantages of treatments for cirrhosis.
Uh..., cut down on the nightly, after work bourbons and the weekend Long Island Ice Teas?
Bull#@%$ Franks a great guy but this is bullcrap it's not going to happen Frank will be brough to the side and told if he goes through with this he will be kicked out, Obama will stop it for the sake of "bipartsanship"
So many ways this isn't going to happen, I would be Happily shocked if in the end the new regs are even half as strong.
Not at the rate their going. This first major bill is taking so long, and look what is happening in the attempts to combine the House and Senate bills. All kinds of garbage and watering down are going on.
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