Tester: the good, the bad, and the ugly

Waiting for the ugly (0.00 / 0)

But I'm certain 'someone' will be along to provide that ...

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by: Rob Kailey @ Fri May 07, 2010 at 20:57:48 PM UTC

gonna have to side with tester here (0.00 / 0)

arbitrary limits on size seems to be illogical and off the point- which should be to regulate risk-taking and interconnectedness of the various instruments which pose a risk.

now whether the dodd bill will actually do any of that is another question entirely. let's just say i am a little skeptical. i look for a process which encases lots of ground up bits of ammendments in a skin of "gee look what we did" much like the health care reform bill will do little or nothing to solve any real problems.

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by: problembear @ Sat May 08, 2010 at 01:11:16 AM UTC

[ Parent ]

Tying size (0.00 / 0)

to a percent of gdp isn't arbitrary. It is realistic. Above a point, a bank too big to fail becomes a bank  too big to save.

We should be neutering the  political power of wall street, instead of retreating into a mishmash of bandaids that do not go to the root of the problem And the root of the problem is congress is allowing wall street to take over control of our political system. Limiting bank size to a percent of gdp is one way to counter that.

If you aren't willing to accept too big to fail, then you need to have alternative hard mechanisms to prevent the unravelling of our finance system, if the biggest player is allowed to fail.

Too big to fail legislation is like spacing out the dominoes so they don't affect each other, when the first one fails. Instead of a few big interlinked dominoes, you get a wide diverse set of dominoes that don't take each other down.

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by: JC @ Sat May 08, 2010 at 01:47:09 AM UTC

[ Parent ]

Size matters if competition matters. (0.00 / 0)

Investment banking, still combined with "normal" banking, lacked adequate competition before the meltdown. Now, there are even fewer, larger hybrid banks, with an unhealthy share of the financial market.  Is anti-trust dead forever? Decoupling banking functions, again, will reduce risk to consumers, investors, taxpayers and to our political system. Decoupling will make the giant banks smaller, but will also do a lot to increase public confidence in the banking sector.

Sadly, there is almost no focus on the Fed, and large mortgage players, the source of "cheap" credit and most of the bad paper still weighing down bank balance sheets.  

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by: steve kelly @ Sat May 08, 2010 at 15:12:45 PM UTC

The Ugly? (0.00 / 0)

Senator Tester backs Wall Street on Brown-Kaufman Amendment

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by: JC @ Sun May 09, 2010 at 20:50:45 PM UTC

Endless Merry -Go-Round (0.00 / 0)

Now that all historical memory is erased it is easy to convince people regulating/limiting/ capital is some "new" tactic. Every fresh crisis brings new calls for restrictions and concern for the "public good" or "stability" , over and over and over again.

But the long term trend? JC mentions the "root" of the problem but needs to peel back one more layer. The working class worships an ideology which enslaves them and stares uncomprehendingly at the spectacle.

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by: troutsky @ Mon May 10, 2010 at 04:35:58 AM UTC

Well (0.00 / 0)

Now that the usual suspects have had a chance to vent their spleens ...

Breaking the big banks into smaller bite sized chunks is not as simple as legislating that they do it.  There is the market hit, economically devastation possibly to the point of triggering the very collapse that Brown-Kaufman seeks to avoid.  There is the claim of targeted legislation, actionable except in cases of antitrust.  The courts have always been extremely unwilling to support caps (arbitrary or not) on the size of a business' assets.  Targeted taxation, however ... just sayin'.  The Big Banks have proven very resilient at avoiding regulation through dummy companies and subsidiaries.  All of these are good reasons to think twice about voting for Brown-Kaufman.

That having been written, I know full well that the usual suspects will ponce on in and tell me how reality really works.  Our Senator is bought and paid for by donations, I don't understand politics, I'm just making excuses, blah blah blah.  But here's the facts:  we don't know why Tester voted the way he did.  Most (all) of us don't know what the effect that Brown-Kaufman would have on the rest of the economy as a whole.  And I'm not being a stooge for Tester.

In truth, I agree most strongly with troutsky.  We have made God-kings of those who run the paper economy, and the greatest portion of that is the denigration of those who have marketable product, labor.  The problem is that we have a system where we get gashed if we even give the faintest prick to those overlords.  One solution is to nationalize one or more of the big banks.  Give us a safety net, while the vampire squid eats its own.

No, I don't see that happening, either.  But I, for one, refuse to lay this problem in the lap of one Senator.  I guess my expectations just don't run quite that high.  

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by: Rob Kailey @ Mon May 10, 2010 at 21:45:37 PM UTC

"I, for one, refuse to lay this problem in the lap of one Senator" (0.00 / 0)

I agree. But our senator's words and votes brings this discussion home to us to dissect.

I just hope that Tester's seeming hypocrisy will elevate the issue of "too-big-to-fail" to one of a productive dialog. That's my goal with pointing him out. I'd like for him to try and reconcile his words with his actions. I don't hold out much hope that he will. But it would be interesting, none the less.

I have to agree with troutsky, too. Unfortunately, it is difficult to take the public one step deeper into the discussion, when they don't even understand what Congress is debating right now. And is the public really ready for a debate on alternatives to our market capitalist system, when already the teabaggers have tagged Obama as the next coming of Karl Marx, when he's really more a moderate republican in the vein of Richard Nixon?

troutsky asks us to look at the ideology the working class worships. I assume this is the capitalist notion that if you work hard you will succeed and be rewarded for your efforts. And if you don't work as hard as others, or you have some hardship befall you, then, well, that's the consequences you pay for playing within the system.

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by: JC @ Mon May 10, 2010 at 22:26:39 PM UTC

[ Parent ]