It's not just the average Joe that's outsmarted by Wall Street. These Harvard and Wharton grads play money like Mozart played the piano...those with the money will find ways around the laws, or persuade lawmakers to sell them loopholes... Does it really matter what kind of power regulators have if they can't or won't use it?
If the big banks (Citigroup, J P Morgan Chase, Wells Fargo, Bank of America... these alone received $25 to $45 billion... each!) ever get in trouble again, for whatever reason, don't you think we will bail them out again? Economists from most philosophies agreed that if we didn't bail them out in the fall of 2008, the possible consequences were huge. It ended up costing us $4.7 trillion in loans alone... I don't think that Senator Dodd's proposed $50 billion that the banks themselves are to put up will cut it.
The government shouldn't be trying to create regulations to keep the failures from happening, or to keep taxpayers from bailing them out... They should be focusing on the “big” problem. They shook the world economy!! The US taxpayers are not the only ones that had to bail them out... at least 10 other countries had to as well. Germany, France, Britain, Austria, Iceland, Ireland...
“Too big to fail” means... they're too big.
Congress needs to quit trying to fix the controversial and complicated “fail" end of the deal, and simply focus on fixing the “big" problem.
A simple law stating that financial institutions can only do this or that type of business, as a single business (remember how the Glass & Steagall Act worked so well for 66 years)...and they can only be this or that big... there you go... done! No more world economic catastrophes. No more giant bailouts... by anyone.
"In politics, if it takes more than a few sentences to explain something, you're in trouble!" Limiting the size of these institutions is the safest (not to mention cheapest) way to make sure that this never happens again. Limiting the size should be a world solution.
Call it “tough love” if you have to...
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