Amen To THAT !!! - 'The Rescue That Missed Main Street' - NYT

[WillyT]

From...

The Rescue That Missed Main Street
By GRETCHEN MORGENSON - NYT
Published: August 27, 2011

This important topic of bailout inequities came up in Congress earlier this month. Edward J. Kane, professor of finance at Boston College, addressed a Senate banking panel convened on Aug. 3 by Sherrod Brown, the Ohio Democrat. “Our representative democracy espouses the principle that all men and women are equal under the law,” Mr. Kane said. “During the housing bubble and the economic meltdown that the bursting bubble brought about, the interests of domestic and foreign financial institutions were much better represented than the interests of society as a whole.”

THIS inequity must be eliminated, Mr. Kane said, especially since taxpayers will be billed for future bailouts of large and troubled institutions. Such rescues are not really loans, but the equivalent of equity investments by taxpayers, he said.

As such, regulators who have a duty to protect taxpayers should require these institutions to provide them with true and comprehensive reports about their financial positions and the potential risks they involve. These reports would counter companies’ tendencies to hide their risk exposures through accounting tricks and innovation and would carry penalties for deception.

“Examiners would have to challenge this work, make the companies defend it and protect taxpayers from the misstatements we get today,” Mr. Kane said in an interview last week. “The banks really feel entitled to hide their deteriorating positions until they require life support. That’s what we have to change. We must put them in position to be punished for an intent to deceive.”

More: http://www.nytimes.com/2011/08/28/business/economy/the-feds-rescue-missed-main-street.html?_r=1

:kick:

[SavWriter]

1. How many Repugnik tools are there?

I gave this a Rec, and it's still at zero. Net recommendation: 0 votes (Your vote: +1)

How many corporate tools are here unrec this kind of painfully obvious truth? Keep fighting friends.

[truedelphi]

2. Just be glad your remark concerning this ain't

Noticed by certain moderators.

When I say something to that effect, entire remark is deleted.

[truedelphi]

3. We had the needed legislation to keep this from happening.

It was a legal milestone, known as Glass Steagall, and it came about as the answer to the manipulations of Wall Street leading up to the first Great Depression.

The Bank Reform Act of 1999, created by Republicans in Congress and signed off on by Democratic President Bill Clinton, obliterated Glass Steagall.

Tim Geithenr feels that re-instating the Act would affect the necessary "Free Market Capitalistic" qualities of our beloved financial system.

And in many ways he is right. Reinstating Glass Steagall would certainly mean that his friends in high places at AIG and Goldman Sachs could no longer feed at the trough that Main Street offers it, by way of Paulson and Bernanke creating digitized accounts for the Big Firms wailing and moaning that they are too big to fail.