The Obama Adminstration's Handling of Wall Street.

Because he keeps throwing out claims and accusations that aren't supported by facts. If he wants to make a case, fine - use actual real facts and data, rather than just making an emotional case. His arguments then meander from topic to topic when one gets dismissed. I don't believe that people should be prosecuted simply because we don't like them and feel that they did something wrong. That's just basically a witchhunt.

He's accused Goldman of a wide range of things not necessarily supported by facts; he then blamed the Obama administration for not prosecuting them quickly enough because he thinks it should be easy - again, despite the facts. We're a nation of laws and if you want to say someone should definitely have been prosecuted, show that they did something illegal based on facts.

 

This is a very pretty myth. Don't get me wrong, I admire the idea, but that's all it is.

 

So do you believe we should be prosecuting people because we don't like what they did? From what I recall, you seem adamantly opposed to exactly that when you feel the DOJ tries to do those things (Bradley Manning, etc). It's no different here, except that the targets (Goldman and their execs) are much less sympathetic figures.

 

Look, I think it's blindingly obvious that both you and I prefer a system of rules and regulations, of law and order, of innocence unless proven guilty. Heck, maybe most American people do, hard to say...

However, you like to pretend such a sentiment is endorsed by the nation. Inasmuch as the nation is represented by the government, this is utter hogwash.

If you want to make idealist generalizations about "laws and justice" that's fine; just temper them with a bit of reality. Don't say "we're a nation of laws" - instead try "I prefer a system of laws and justice. I prefer a higher standard."

 

I doubt anyone will dispute this, and it's the most important part of your post.

 

you think TARP was done shoddily on purpose by Obama? TARP was done under Bush.

 

I know this really doesn't address the issue of not enough regulations being added under TARP, but at least it may make money.

http://blog.chron.com/lorensteffy/2011/06/could-the-tarp-program-become-profitable/

 

I agree with all of this - I'm not defending the system. I think there should be major changes. I think FinReg actually made some pretty major changes - the specific rules are still in the works and are being fought every step of the way, but they are in process. Global finance is a complicated thing, and Congress, in one of it's few relatively smart moves, didn't try to regulate it itself - they are not experts on finance. They gave agencies the authority to draft new rules and those are in the works right now. Last week, banks tried to fight new credit/debit card regulations and failed. Today, they are fighting higher capital requirements for the larger banks, and hopefully will fail. They are fighting to get rid of the new holding requirements of mortgages, and we'll see where that goes. But these are potentially very meaningful changes.

If I were going to change the system, my goal would be much simpler - align the goals of the banks with that of the economy. In the past, banks primarily made money when the economy was healthy, so it was in their interest to focus on activities that did that (banking, lending, etc). Today, banks can make large amounts of money when the economy goes south - not a bad thing in itself as it disciplines the market. The real problem is when banks have the ability to both profit from the economy going bad AND contribute to the economy going bad. New regulations should basically make it so that banks are rewarded most when their goals align with the greater economy.

That said, all throughout this, I've never defended the system or the ethics of companies like Goldman. I've defended them *given* our current set of laws - nothing more. If we come up with better laws, great. But as it stands with the current system, it's unclear if they've done anything illegal at this point.

I disagree with that. The goal of TARP was to stabilize the banking system. The way to do that was to throw money at it and build confidence. And it worked brilliantly. And it was structured such that that, if successful, the banks would pay everyone back - with high interest rates. And that's exactly what they did, and taxpayers profited. Even the ones that weren't supposed to return a profit (the car companies) have been phenomenally successful.

For all the talk about oversight or secrecy, the bottom line is that it worked - and it worked exactly as the proponents said it would. And all the crazy predictions that opponents made didn't come true.

You can say it should have been tied to the regulatory changes, but reality made that impossible. Anyone watching the situation saw that they had days, maybe weeks, to restore confidence. That one failed TARP vote done for political reasons caused permanent damage to the economy and made the collapse worse. Every extra day that they took created additional permanent damage to the economy. And the reality is that Congress was not capable of designing new, smart regulations in days or weeks - it looks months, if not a year+, just to come up with that they did. Any regulations passed with TARP would have been reactionary and likely terrible.

I'd agree that government is tied to the banking system, in large part because the banking system is tied to the economy. I would disagree in the last part - FinReg does have meaningful changes. Not everything I'd like, and a lot of it is still in the works due to rule-making, but there are very real changes in there.

 

What we really need is a separation of Wall Street and state.

 

what we really need is to go back to the regulations that started being chipped away under reagan, ending in the repeal of glass-steagall (signed by clinton). the end of glass steagall can be directly tracked to the financial crisis. particularly the end of the separation of commercial and investment banking.

 

Agreed. People (not necessarily in this thread but more on the national level) need to stop making the argument that less regulation will give more confidence and success to the big corporations that will lead to a healthier economy and more jobs.

That's been shown to be BS. The corporations are making record profits and aren't hiring more, and aren't helping the economy. We don't need to do more to help out the big corporations. That has already been shown to not help. What we need are regulations to make sure that the middle class isn't cheated or taken advantage of.

 

well now their argument is that they aren't investing because of regulation and uncertainty about more regulation. its a crock of dung

 

Yes, since their profits are at record highs, yet there have been economic downturns because of lack of regulation, then the proper path seem pretty evident.

 

he has done great with the economy and unemployment

lol

 

I agree that the Obama Admin. hasn't done a good job with reforming the financial system or holding banks and other financial companies that accountable but I don't think all of that is due to some conspiracy to get campaign contributions. Keep in mind that the Obama Admin. has tried to introduce reforms that have met heavy resistance in Congress while the economic crisis has also hampered the implementation of reforms that might worsen things in the short term.

I also think that there was an overinflated expectations about what Obama could and would do when he go elected.

 

I'll play. Forgive me for using the FASB example again, but I'm rather trying to put it into a context that you can understand, since you brought in that you are aware of SFAS/IFRS point and I don't know or particularly care about your personal background.

FASB (rather, the accounting profession in general) has been arguing for decades over principles-based versus rules-based accounting. Both are ripe with opportunities for with abuse such that it is quite clear that regardless which one it adopts, you're gonna have a sh1tload of trouble.

Usually when some large fraud occurs and Congress (late as usual) drops the hammer, FASB goes in the "oh my god" mode and adopts a rules-based approach. Then later on, when the companies invariably figure out how to circumvent the rules, it finds out that it can't regulate them because the companies are following the very rules set by itself, it invariably adopts a principles-based approach, i.e., we can't hammer you on the specific rules, but we think you violated GAAP. The pendulum swings the other way. Then the companies figures out how to justify based on certain "principles" which technically have merit. And oh believe me, many of those justifications have merit, applied properly. And so on and so forth, ad nauseum...

Want an example? Right around the time of Enron? Capital vs. operating lease. We're on the principles-based swing (after the rules-based swing in the early 2000's). I heard a new rule is coming out either in 2012 or 2013.

That's how the real world works. There is no simple answer, whether you're talking accounting standards or regulating the banking industry. Get off your magic cloud and accept the fact that there will be abuse no matter what set of standards you put in.

As for Goldman, it can say all the "we screwed the investors" or white elephants or tinker bell. Heck, it could be calling those "investors" morons right behind their backs. None of that is illegal/fraudulent, so long as it made NO MISREPRESENTATIONS to said investors.

Having regulations to protect investors is just moronic, in the real world, when you have a bunch of idiotic investors, which you'll notice, is why I don't have much sympathy for those. If they need to lose money, lots of it, to learn their lessons, so be it.

 

Here is an example of one of the many things, though not directly tied to FinReg, designed to put limitations on banks:

http://www.cnbc.com/id/43434720

Again, rules are still in the works, but these kinds of things are happening in numerous areas to limit the potential of financial institutions to blow up the system.

 

hope and change lol

economy and unemployment changed, they both got worse

round 3 for Obama and his stim?