Oh, Barack, Where Art Thou - Michael Hirsh/Newsweek

[WillyT]

Oh, Barack, Where Art Thou
With the president AWOL, a too-quick return to normalcy could scuttle financial reform.
By Michael Hirsh | Newsweek Web Exclusive
Apr 6, 2010

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Barack Obama is off pursuing his latest passion, nuclear disarmament, flying to Prague this week for the signing of the new START agreement and then attending the Global Nuclear Security Summit to be convened in Washington starting April 12. Oh, and by the way, the president is telling Rep. Barney Frank and Sen. Chris Dodd offhandedly, he'd also like to sign their financial-reform bills by Memorial Day. Later, guys! It is yet another sign that Obama has other priorities, even as he's rhetorically still attacking the titans of Wall Street.

Which leaves, as the only remaining scourge of Wall Street, none other than ... Phil Angelides. The Nancy Pelosi crony who is head of the Financial Crisis Inquiry Commission has scheduled his second set of public hearings this week. Angelides will attempt to deconstruct the fall of Citigroup by putting former execs Robert Rubin and Chuck Prince before the cameras. But as NEWSWEEK reported last year, Angelides's commission has been hurt by dissension and a slow start, and its chairman has been dogged by questions over his fundraising practices while California treasurer.

The White House insists the president is still intent on fundamental financial reform. "Members of the economic team have been out in full force on this issue delivering speeches on the need for strong reform, fighting efforts from trade groups and lobbyists to weaken and kill the bill," an administration spokesman said. Still, despite previous promises that Obama would turn his full attention to financial reform after health care—for which, recall, he postponed an important trip to Asia—all signs are that he continues to leave the issue entirely to Treasury Secretary Tim Geithner and the administration's chief economic adviser, Larry Summers. This duo, in turn, seems willing to let the Senate do what it wants as long as it doesn't get too specific in placing new restraints on Wall Street. Rather than putting new rules into law that will break up the banks or restrict them from certain risky practices, Geithner and Summers are banking on the same financial regulators who fell asleep last time, expecting they will use their discretion appropriately to keep an eye on things in the future. As evidence, consider Geithner's letter to Rep. Keith Ellison, who recently asked for advice on what kind of leverage requirements to put into the bill. None, Geithner replied. "We do not believe that codifying a specific numerical leverage requirement in statute would be appropriate," Geithner wrote. To impose "fixed, numerical capital requirements in statute," the Treasury chief added, would only create an "ossified safety and soundness framework."

Summers, meanwhile, told ABC's This Week on Sunday that the Dodd bill contains certain requirements that institutions have much more capital so they won't need to be bailed out. But in fact the language of the Dodd bill leaves it entirely up to the Fed's Board of Governors to decide "prudential standards" for "risk-based capital requirements, leverage limits, liquidity requirements, a contingent capital requirement, resolution plan and credit exposure report requirements, concentration limits, and overall risk management requirements." Similarly, the Senate bill says the "Volcker Rule" that the president declared he would fight for in January—restricting federally guaranteed commercial banks from proprietary trading—will be left to the discretion of the new Financial Stability Oversight Council...

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More: http://www.newsweek.com/id/235938/output/print

:kick:

[AlinPA]

1. As if working on a nuclear disarmament treaty is not important. Stupid. nt

[msongs]

2. wall street lobbyists are busy writing the bill obama will sign - while our schools go down the...

toilet in the race to top and to see how much we can squander of the military welfare complex.

Msongs