Krugman today on 'Fool-Resistant Financial Reform'

[flpoljunkie]

The point is that the Dodd bill would give an administration determined to rein in runaway finance the tools it needs to do the job. But it wouldn’t do much to stiffen the spine of a less determined administration. On the contrary, it would make it easy for future regulators to look the other way as another bubble inflated.

So what the legislation needs are explicit rules, rules that would force action even by regulators who don’t especially want to do their jobs. There should, for example, be a preset maximum level of allowable leverage — the financial reform that has already passed the House sets this at 15 to 1, and the Senate should follow suit. There should be hard rules determining when regulators have to seize a troubled financial firm. There should be no-exception rules requiring that complex financial derivatives be traded transparently. And so on.

I know that getting such things into the bill would be hard politically: as financial reform legislation moves to the floor of the Senate, there will be pressure to make it weaker, not stronger, in the hope of attracting Republican votes. But I would urge Senate leaders and the Obama administration not to settle for a weak bill, just so that they can claim to have passed financial reform. We need reform with a fighting chance of actually working.

http://www.nytimes.com/2010/04/05/opinion/05krugman.html?hp

Tell the Senate to Strengthen Financial Reform Legislation and Hold Big Banks Accountable:

http://capwiz.com/affil/home/

[zipplewrath]

1. But that's their entire political strategy

But I would urge Senate leaders and the Obama administration not to settle for a weak bill, just so that they can claim to have passed financial reform.

We've seen this over and over (and Krugman has supported it on occasion). "Pass something" so you can claim a victory. The stimulus was "too small" (per Krugman) and focused in the "wrong" areas. HCR was actually HIR but it was " a step", one that required immediate "fixes" I might add. The renewal of the Patriot Act "wasn't perfect" but "had" to be passed.

Krugman is trying to undermine the very strategy of Obama, one he helped create.

[Kolesar]

2. ^unrec...eom

[zipplewrath]

3. Odd response for a discussion forum

But, whatever. I'll admit, I don't even pay attention to recommendations on my own posts.

[flpoljunkie]

4. Whose strategy? Weak-kneed Dems? Krugman's right. We need reform that actually works.

[Oregone]

5. "We need reform that actually works"

But well fix it later. We need a win now. Anything is a "start". Its a step in the right direction.

Krugman may be correct on this financial issue, but he championed many of the counter-arguments in the last political debate (health insurance reform). Its downright comical.

[paulk]

6. hmmm

http://www.huffingtonpost.com/simon-johnson/larry-summers-senator-kau_b_525089.html

best line

"The White House rhetoric on financial reform is moving in the right direction. But there is growing dissonance between what the White House says it is supporting and what is really in the legislation."

where have I heard this before?