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Tuesday, September 16, 2008

Why on earth would anyone think John McCain will "reform" Wall Street?
Posted by Jill | 6:00 AM
Has there ever been a more disingenuous statement than that of John McCain yesterday, promising “major reform” to “replace the outdated and ineffective patchwork quilt of regulatory oversight in Washington and bring transparency and accountability to Wall Street.”?
In early 1995, after Republicans had taken control of Congress, Mr. McCain promoted a moratorium on federal regulations of all kinds. He was quoted as saying that excessive regulations were “destroying the American family, the American dream” and voters “want these regulations stopped.” The moratorium measure was unsuccessful.

“I’m always for less regulation,” he told The Wall Street Journal last March, “but I am aware of the view that there is a need for government oversight” in situations like the subprime lending crisis, the problem that has cascaded through Wall Street this year. He concluded, “but I am fundamentally a deregulator.”

Later that month, he gave a speech on the housing crisis in which he called for less regulation, saying, “Our financial market approach should include encouraging increased capital in financial institutions by removing regulatory, accounting and tax impediments to raising capital.”


In other words, despite the fact that the greed, incompetence and mismanagement of Wall Street executives as a response to the deregulated environment that resulted from the gutting of the Glass-Steagall Act of 1933 orchestrated by then-Senator Phil Gramm has brought the global economy to the brink of complete collapse, John McCain still thinks the problem is too much regulation -- and very likely thinks that Phil Gramm as Treasury Secretary is just the guy to fix the problem. Fox, henhouse, etc.

I realize that most Americans don't regard themselves as part of the "investor class", and indeed most Americans aren't. But every American who has a 401(k) is going to be affected by this, and every American who has money in a bank that's teetering on the verge of collapse (and Wilbur Ross said yesterday that about 1000 banks may close) is going to be affected. Oh, sure, the FDIC protects your "money", but if Washington Mutual fails (as seems as likely as not), it's going to virtually bankrupt the FDIC. So the only way your money will be "protected" is if the FDIC punishes the healthy banks (like Hudson City Savings here in New Jersey) by increasing the fees they pay to the FDIC or by printing more increasingly worthless money that's backed by nothing.

So if John McCain and Phil Gramm want to even FURTHER deregulate the companies that privatized their profits and now want to socialize the consequences of their mismanagement, just how the heck does McCain plan to bring "transparency and accountability to Wall Street?"

Or is Sarah Palin now an expert in financial markets because she has a Citibank Master Card in her wallet?

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2 Comments:
Blogger Nora said...
We need to really hammer on this. I think it should be fairly easy to say, "This neltdown wouldn't have happened if these institutions were properly regulated. Republicans think all regulations are bad, and so they've gutted exactly the kind of rules that would have prevented these huge losses. John McCain is a Republican. He believes that we need less regulation and more of this kind of disaster. Vote for real change. Vote for Obama."

You could make it punchier, I daresay, but that's the gist.
9/16/08, 8:32 AM  
Anonymous Anonymous said...
My first car loan was from Hudson City back in the early eighties for 18 percent, with 20% down. They were tough on a first timer getting a car. I am glad they still are so tough and frugal.
9/16/08, 1:22 PM  
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