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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsPaul Krugman: Obama's financial reform is working a lot better than anyone would imagine
Obama’s Other SuccessAUG. 3, 2014
Paul Krugman
Although the enemies of health reform will never admit it, the Affordable Care Act is looking more and more like a big success. Costs are coming in below predictions, while the number of uninsured Americans is dropping fast, especially in states that haven’t tried to sabotage the program. Obamacare is working.
But what about the administration’s other big push, financial reform? The Dodd-Frank reform bill has, if anything, received even worse press than Obamacare, derided by the right as anti-business and by the left as hopelessly inadequate. And like Obamacare, it’s certainly not the reform you would have devised in the absence of political constraints.
But also like Obamacare, financial reform is working a lot better than anyone listening to the news media would imagine. Let’s talk, in particular, about two important pieces of Dodd-Frank: creation of an agency protecting consumers from misleading or fraudulent financial sales pitches, and efforts to end “too big to fail.”
The decision to create a Consumer Financial Protection Bureau shouldn’t have been controversial, given what happened during the housing boom. As Edward M. Gramlich, a Federal Reserve official who warned prophetically of problems in subprime lending, asked, “Why are the most risky loan products sold to the least sophisticated borrowers?” He went on, “The question answers itself — the least sophisticated borrowers are probably duped into taking these products.” The need for more protection was obvious.
Read more:
http://www.nytimes.com/2014/08/04/opinion/paul-krugman-dodd-frank-financial-reform-is-working.html
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Scuba
(53,475 posts)
TheKentuckian
(25,026 posts)would not be allowed to fail if/when there is another meltdown but seems to be pushing that next time resolution authority will allow said bailout without throwing it at the stockholders (which even with the benefit of hindsight can only say there was a lack of certainty that this was on before).
What I really don't get is the actual purpose behind the article, the exact same assessment could have been made the day it passed. He only pointed to the provisions and didn't support the impacts of them in real world application.
End to big to fail, hell no, managing to big to fail is actually Krugman's case not ending it.
Orsino
(37,428 posts)Krugman is right to point out significant progress, lest we forget about it and fail to follow up.
TheKentuckian
(25,026 posts)to do "something" after having to be relentlessly dogged while doing as close to nothing as possible and rolling out the old "Mission Accomplished" banner until the next time the shit hits the fan (and it will because almost nothing was done that would even have prevented the last meltdown much less a future one) and rinse and repeat, probably in hopes that Democrats can be blamed for their failed reform so the next "adjustments" can be even m ore wrongheaded and stupid and if not then the good cops can try another bandaid on the hemorrhage which does little.
The real good news is the transaction transparency but even that is tip toeing around that some practices actually need to be much more strongly regulated and others banned outright instead of just being more clear on the usury and swindling. Desperate and needy people will continue to sign because the gun is still to their heads.
All it really does is allow the blame to be put more squarely on the stick up victims and off the predators who can say they had clear terms.
Now, does this mean I put all the weight on "one President"? No, the weight is one one President and one Congress (and the duty of future Presidents and Congresses to maintain and pursue as needed) considering the crushing gravity of the situation it was sure as hell their duty to the people and our nation.
It is no different than allowing a battle group to bombard us, it is their duty and not doing it is deserving of contempt not a damn hallelujah chorus for putting in a few scattered air raid horns and maybe couple of shoddy bomb shelters that will collapse upon any impact EVEN if the opposition openly is sending misses to the battle group because their fundamental duty requires answering and stopping the attacks.
To claim to resolve too big to fail with this resolution authority is deeply and perhaps fundamentally dishonest anyway, the supposed answer is more too big to fail, all they are fixing to do is probably (but not definitely, depends on the circumstances and who the player is) roll the failed bank into the survivors, making them even larger and more tied to the broad health of the economy.
What it actually is addressing is the "moral hazard" of paying off the shareholders (probably...maybe...er..we guess depending) and not pissing off constituents who feel screwed in the exchange as much not the systemic threat of too big to fail.
pansypoo53219
(20,978 posts)politicaljunkie41910
(3,335 posts)get the recognition that he deserves. Just think what might have been had he had a semi-cooperating congress to work with. Where might this country be. No he is not perfect but than no president ever was, and we don't expect them to be. If anything this President more than any previous, including George W. Bush has had to work against great odds to include the Fox Noise machice, Twitter, Facebook and other instant messaging social media, a politicized press, and a polorized opposition electorate that still doesn't know what it's angry about and has more times than I can think of cut off its nose to spite its face.
