1st Steps Towards A Course Correction: Paul Volcker prevails

[democracy1st]

Paul Volcker Prevails: Obama To Propose New Banking Rules
by Simon Johnson




Paul Volcker, legendary central banker turned radical reformer of our financial system, has won an important round. The WSJ is now reporting:

President Barack Obama on Thursday is expected to propose new limits on the size and risk taken by the country's biggest banks, marking the administration's latest assault on Wall Street in what could mark a return -- at least in spirit -- to some of the curbs on finance put in place during the Great Depression.

Thursday's announcement should be assessed on three issues.

1. Does the president provide a clear statement of why we need these new limits on banks? The administration's narrative on what caused the crisis of 2008-09 has been lame and completely unconvincing so far. The president must take it to the banks directly - tracing the origins of our "too big to fail" vulnerabilities to the excessive deregulation of banks following the Reagan Revolution and emphasizing how much worse these problems became during the Bush years.

2. Are the proposed limits on the total size (e.g., assets) of banks, or just on part of their operations - such as proprietary trading? The limits need to be on everything that banks do, if they are to be meaningful at all. This is not a moment for technocratic niceties; the banks must be reined in, simply and directly.

3. Is there a clear strategy for (a) taking concrete workable proposals directly to Congress, and (b) win, lose, or draw in the Senate, running hard with this issue to the midterm elections?


The major question now is - will the White House have the courage of its convictions and really fight the big banks on this issue?



http://www.huffingtonpost.com/simon-johnson/paul-volcker-prevails_b_430869.html

[laughingliberal]

1. Perhaps a good sign. Volcker's been back benched while Summers and Geithner continued running the

Goldman Sachs economic plan. Interesting timing to put Volcker out in front. Maybe they've figured out people are about sick of the Wall Street bandits and their bankster pals?

[rpannier]

2. John McCain has proposed re-instituting the Glass-Steagel Act

He's a Republican and that SHOULD make it filibuster-proof.

But, alas there's Ben Nelson, Joe LIEberman, Blanche 'I've always relied on the kindness of traitors' Lincoln...

[Kablooie]

3. Won't this hit the same filibuster tactics and die?

Until there is a Republican president then, ba ba boom! It passes with 51%.

(Because some Dems and all the GOP will vote for it then and no Dems will filibuster it.)