Obama is halfway there. The world’s finances are undergoing a shift, however glacial the move after the sudden break of the ice-pick two years ago. Germany is facing some issues with their austerity package even as other European and euro-bloc countries are forced into extreme measures. At the same time, China has unpegged the yuan from the dollar and it is making the tiniest of moves that may someday define how the exchange rates around the world work. All that said, the U.S. is still the landmark for financial action. How our investment banks and NYSE traders do things has a massive impact on how the world runs- and the Obama administration’s attempt to regulate that back into something not so speculative has set off market turmoil both here and abroad.
But it’s halfway there. The House of Representatives approved the financial reform legislation, and by a large margin. 237-192 is a serious victory for Obama and his plans. The Senate, however, has put the brakes on, suspending any further action until they come back from the July 4 recess in the middle of this month.
"It has been a long fight against the defenders of the status quo on Wall Street, but today's vote is a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth," said Obama.
Is it a victory against the status quo? That sounds good in a sound bit, or a statement quote, but isn’t the status quo in America’s financial markets that they are always changing? So this is really part of the status quo. If they shrugged it off and didn’t do anything, that would be more of the status quo, I think. But I digress into semantics. I like Obama’s point that it is a move to reign in the “recklessness and irresponsibility” of the Wall Street groupies.
That’s the point here- there are way too few ways to hold those guys accountable. And that needs to change. The larger issue, of course, is that we rely on a place like Wall Street for the stability of everything else that happens in our society. Why did we let it get to that point, is what I ask for my real question.
As Reuters succinctly says, “The bill would impose tighter regulations on financial firms and reduce their profits. It would boost consumer protections, force banks to reduce risky trading and investing activities and set up a new government process for liquidating troubled financial firms.”
We need all of those things.
- Tighter regulations, lower profits. Good because it will reduce the power of financial firms over, well, everything.
- Consumer protection and reduce risky trading- yes, yes, and yes. We’ve seen what happens when we don’t care enough to regulate.
- Process to liquidate troubled financial firms. This sounds socialist, and I can understand why people are skeptical or balk. I am skeptical, too. But one thing it will do is put the fear in the financial firms. And that’s a good thing.
Photo Credit: jmtimages
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