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Jun 17, 2009 - 12:57 PM EDT
Edward Harrison submits:Having read through the draft of President Obama’s financial regulatory proposal, my initial reaction is largely positive. He sets the right tone and says all of the right things. However, the devil is in the details and we will need to see how these firm up as these ideas become law. In my view, there are a number of likely turf fights which will result from this proposal which will present a challenge. Moreover, the changes do give the executive branch via the Treasury and the Federal Reserve more power, and it is unclear both whether this is wise and whether it will be acceptable to members of Congress.
The President begins his proposal by acknowledging this severe crisis, the worst since the Great Depression, has been a severe blow to ordinary Americans and their access to credit for homes, cars, education, and businesses. He then states that the ultimate cause lies decades in the past due to complacency stemming from the apparent resilience of the U.S. economy. To be sure, crises did occur, but they never penetrated Fortress America’s defenses. I see this as a veiled rebuke of the Greenspan Era (see my post “The US Economy 2008” for a similar take on how the damage to the U.S. economy made this crisis different). He also decries a lack of transparency and the looting of American consumers before summing up that we must act now.
Source: Seeking Alpha (Jun 17, 2009 - 12:57 PM EDT)
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