Category: Financial Crisis Page 9 of 13

So, these last few days we’ve seen virtually every major progressive blogger say that the health care bill was worth passing and that progressive members of Congress who promised to vote against it if it didn’t include a public option were right to do so.  (I, of course, think that the public option as offered was crap, but that’s not the point, they made explicit promises not to vote for a bill that didn’t include one.)

The argument I have heard is that of course they never meant it, “everyone” knew they were lying, and that it is unreasonable to expect them to keep to their word.

What I take from this is that most progressive bloggers believe that we should just assume that politicians are liars and not take them at their word.

Is that really what they want to argue?  That all progressive politicians, every single one, are liars who won’t keep their word?

I’m willing to agree with them, if that’s what they’re trying to say, or rather, I think they’re gutless.  I think when the pressure is put on them, they fold.

And almost every  “major progressive” forgives them, which is why they keep lying and keep folding, because they know they will be forgiven for being gutless liars.

That’s the behaviour most progressive bloggers, and everyone else making excuses for them, enables.

This entire generation, whether in media or power, is hopeless.  A write off. Gutless, stupid and liars.  They all need to go.  And forgive me, that includes most of the high ranked bloggers, many of whom I consider my friends.  Instead of being people who challenged power, who had the moral and intellectual integrity to speak from a place of principle, they have become apologists for the worst sort of craven sell-outs imaginable, constantly decided that if some group wins it’s ok to hurt other groups, including by taking away their rights.

The blogosphere I grew up in, is dead.  And the hope that the Democrats would be enough better than the Republicans to fix America, well, that too is dead.

Guess a kick in the head sometimes knocks some sense into people.  I confess I’m surprised.  Maybe they can learn.

The White House wants commercial banks that take deposits from customers to be barred from investing on behalf of the bank itself—what’s known as proprietary trading—and said the administration will seek new limits on the size and concentration of financial institutions.

… Banks shielded from risk through federal-deposit insurance, or aided in financial crises by low-interest loans from the Federal Reserve Board, would no longer be allowed to engage in trading unrelated to their customers’ interests, one senior administration official said.

Under the proposed rule, commercial banks would be prohibited from owning, investing in or advising hedge funds or private equity firms. Bank regulators would not be simply given the discretion to enforce such rules. They would be required to do so.
…
Administration officials said they also want to toughen an existing cap on bank market share. Since 1994, no bank can have more than 10% of the nation’s insured deposits. The Obama administration wants that cap to include non-insured deposits and other assets.

This is the right thing to do.  I agree with Johnson that they should also launch anti-trust investigations of the banks.  I would add, that in addition, they should launch criminal fraud investigations into bank behaviour leading up to the financial crisis.  Keep these people so tied up, and get them so scared that they want peace at any cost.

As Johnson notes, it seems unlikely this can pass the Senate.  But if Obama wants to not have a disaster in the 2010 elections, he should make these sort of actions the centerpiece of his administration for the next year.  Run against the banks, and go hardcore populist.  Because if he doesn’t, the Republicans will go faux populist, and win on it.

We’ll see, in the next few months, how serious Obama is about taking.  Is this for real and will he pursue it with all his might, making a fight of it, or he will pursue it like everything else he’s done—half-heartedly, and for show?  Will he push it hard in the Senate, or when the Senate balks, will he shrug and say ‘whatever Ben Nelson wants?”

I’m not optimistic, but at least, in a pleasing change from most of his behaviour since the election, Obama is talking about doing the right thing.

The FDIC has put out a proposal to penalize banks whose pay practices incentivize risky behavior.

It won’t work.  The time is long past to stop using incentives and to simply tell them what to do.  The banks in Britain are eating almost the entire cost of the banker bonus tax of 50%.  Bankers have no concern with the health of their banks, only with the size of their own salaries, since they know that if necessary governments will spend any amount of money to bail them out if they go under.

This is not going to change, because we just spent trillions proving it to them, and they won’t believe words over actions, as they shouldn’t.