Send a Tweet
Most Popular Choices
Share on Facebook Share on Twitter Printer Friendly Page More Sharing
OpEdNews Op Eds    H4'ed 11/2/12

Arbitraging Catastrophe: We're All in Danger -- And It Could Get a Lot Worse

By       (Page 1 of 3 pages)     (# of views)   1 comment
Author 77715
Message Richard Eskow
Become a Fan
  (13 fans)


(Image by Unknown Owner)   Details   DMCA
- Advertisement -

It's a sign of our shadowy times that the latest regulatory "reform" bill hasn't been laughed out of Washington. Same goes for the latest bankers' complaint, this time about being asked to cover their own bets. And if you think it's bad now, wait and see what happens if Romney takes over.

Think "global catastrophe."

While bank-friendly politicians offer insipid legislation, the world economy is still at risk. And it could get worse.

- Advertisement -

Off the leash

The Independent Regulatory Analysis Act (S. 3468) might seem to make sense -- until you spoil the illusion by thinking. At the president's discretion, regulators could be forced to perform up to 13 additional costly and complicated steps before any new banking rule is enacted. it would be a costly and complicated process filled with bureaucratic red tape. In other words, it's everything politicians claim to despise -- unless they help banks, it seems. 

An excellent review by Demos estimates that Senate bill 3468 would delay the implementation of Dodd-Frank financial reforms by as much as a year and a half.

- Advertisement -

That's the point, of course. Mark Gongloff's summary of this Act in The Huffington Post had the pithy headline, "Senators Want to Give President Power to Stop Insufficiently Lenient Financial Regulations." That pretty much sums it up.

This bill is so bad that a blue-ribbon list of regulators like Fed chair Ben Bernanke and the SEC's Mary Shapiro -- hardly liberals -- signed a letter saying it would give "any president unprecedented authority to influence ... independent regulatory agencies and would constitute a fundamental change in (their) role."

Among other things, the Act would force regulators to explain why they believe "private markets" have failed to solve any problems the rule addresses. (We suggest creating a Word macro for this section that reads as follows: "Um, because this is the real world.")

The bill's sponsors -- two Republicans and Democrat Mark Warner -- seem especially proud of a provision requiring regulators to estimate the cost of new rules before implementing them. But they already do that wherever possible.

The process was simpler under the Bush Administration, as it no doubt would be under Romney's: Just appoint bank-friendly regulators (preferably bank lobbyists) who won't implement any regulations at all.

Estimate this

- Advertisement -

Here's the problem with this whole "cost estimate" idea: Nobody's being asked to estimate the cost of not implementing regulations. Want to know how much it cost us to de regulate Wall Street in the decade before the 2008 crisis? $12.8 trillion, according to a comprehensive analysis by the folks at Better Markets. That was the total cost of a financial crisis caused by the actions of Wall Street bankers acting without adult supervision.

$12.8 trillion.

And, as Better Markets CEO Dennis Kelleher observes, that's a conservative  estimate. Tens of millions of lives have been tragically disrupted in this country alone, while hundreds of millions have suffered serious financial losses.

Next Page  1  |  2  |  3

 

- Advertisement -

Must Read 2   Well Said 2   Valuable 2  
Rate It | View Ratings

Richard Eskow Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Host of 'The Breakdown,' Writer, and Senior Fellow, Campaign for America's Future

Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

STAY IN THE KNOW
If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
Name
Email
   (Opens new browser window)
 

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

How to Fix the Fed: Dismiss Dimon, Boot the Bankers, and Can the Corporations

The Top 12 Political Fallacies of 2012

Pawn: The Real George Zimmerman Story

What America Would Look Like If Libertarians Got Their Way

"His Own Man's" Man: Jeb Bush and the Return of Wolfowitz

"F" The Bureaucracy! The White House Can Help Homeowners Right Now