Sounds good in theory but in practice may be another story. Overall it’s a decent start to add in what needs to be in place but the problem still remains, it’s led by Geithner. Wall Street and friends will surely re-start the cries of “socialism” but isn’t that what they always do? It’s critical for the bulk of Americans that the financial system is healthy and growing but it’s equally critical that the system avoids the excesses of the past. Wall Street bragged about the growth in recent years but as we all know today, it was a mirage. The growth wasn’t growth for anyone except those who pocketed commissions pushing deals that were hot air. (Again, nobody in power has asked for any of that to be re-paid so AIG et al can go Cheney themselves.) This also means the retirement system is going to need to be updated unless Washington would like more problems ahead.
Looking at how pro-Wall Street Geithner/Obama – not to mention Congress – have been so far, having confidence in this plan is a real challenge. It’s a start, but until I see otherwise I will remain skeptical. Geithner has cowered to Wall Street so what’s going to be different this time? Just as with the market, we need confidence and at the moment it is severely lacking.
Treasury Secretary Timothy F. Geithner plans to propose today a sweeping expansion of federal authority over the financial system, breaking from an era in which the government stood back from financial markets and allowed participants to decide how much risk to take in the pursuit of profit.
The Obama administration’s plan, described by several sources, would extend federal regulation for the first time to all trading in financial derivatives and to companies including large hedge funds and major insurers such as American International Group. The administration also will seek to impose uniform standards on all large financial firms, including banks, an unprecedented step that would place significant limits on the scope and risk of their activities.