Recall that Citigroup was brazenly created in 1998 in violation of the Glass-Steagall restrictions. Those were repealed within months with major help from Robert Rubin, who went on months later to make $15 million a year at Citigroup. The repeal was like waving the green flag at a Nascar race—part of a culture of empowerment that encouraged Wall Street to get bigger and riskier and to eventually trash the rest of the economy.
But don’t listen to me or Sorkin: Ask John Reed, Citi’s former CEO, and Dick Parsons, its former chairman.
Yeah, that was the hashtag I slapped on that POS when I saw it:
#STRAWMAN
https://twitter.com/ritholtz/status/204948602542489600
#1 Posted by Barry Ritholtz (@ritholtz), CJR on Fri 25 May 2012 at 11:14 AM
His audience operates and/or benefits from the Wall Street wealth pump and they have a tune they want heard. Sorkin is either pandering to them or corrupting the public record on their behalf.
It could, however, be reasonably argued that a few more Wall Street operatives hanging from lamp posts WOULD be a cure for crisis. Pour encourager les autres, or whatever.
#2 Posted by Jonathan, CJR on Fri 25 May 2012 at 11:43 AM
Right, mostly, Ryan, but I submit that "Hauling Executives to Jail" actually could be most of the solution.
Take away their money and put them in prison for many years. Do a few and build up the machinery necessary to do a lot more, and the greedheads will see reason.
Worth a try, anyway.
#3 Posted by Edward Ericson Jr., CJR on Fri 25 May 2012 at 12:13 PM
To borrow from Ed Koch, 'Doesn't the truth matter?' Or, how about simple facts?
Glass-Steagall (The Banking Act of 1933) has NOT been repealed. Stroll into any bank and see if there isn't a sign somewhere proclaiming that the deposits there are insured by the FDIC. That is Glass-Steagall.
All that has been repealed were two provisions (#20 and #32) out of the original 34. Those two were about 'affiliations' and board memberships between commercial and investment banks. Had either remained in place they would have had nothing to do with the financial crisis of 2008.
The provisions defining commercial (#16) and investment banking (#21) were concerned with the now totally discredited idea that banks speculation in corporate securities was the cause of the Great Depression. No sober economic historian believes that to have been true.
At any rate, the 2008 problems were in real estate loans, not corporate securities. It's a dead giveaway that someone is clueless when he says that it's 'the repeal of Glass-Steagall'.
#4 Posted by Patrick R. Sullivan, CJR on Mon 28 May 2012 at 05:33 PM
It's kinda common knowledge when we talk about the Gramm-Leach-Bliley act's effect on Glass-Steagall that we're talking about the repeal of those sections making federally insured banks separate from the high flyer investment banks.
It's a pedantic point that maybe commenters could be more accurate about, but it's not like you can label some one 'clueless' just because they use the short hand 'repeal glass-steagall' when what is meant is 'repeal glass-steagall protections/restrictions'.
And it's probably wise not to label people clueless when you don't seem to have the causes of the Great Depression right nor get how " the 2008 problems.. in real estate loans" caused by huge irregularities in the Mortgage Backed Securities market might have been mitigated by having restriction #20:
"Sec. 20. After one year from the date of the enactment of this Act, no member bank shall be affiliated in any manner described in section 2 (b) hereof with any corporation, association, business trust, or other similar organization engaged principally in the issue, flotation, underwriting, public sale, or distribution at wholesale or retail or through syndicate participation of stocks, bonds, debentures, notes, or other securities. "
or #32:
"Sec. 32. From and after January 1, 1934, no officer or director of any member bank shall be an officer, director, or manager of any corporation, partnership, or unincorporated association engaged primarily in the business of purchasing, selling, or negotiating securities, and no member bank shall perform the functions of a correspondent bank on behalf of any such individual, partnership, corporation, or unincorporated association and no such individual, partnership, corporation, or unincorporated association shall perform the functions or a correspondent for any member bank or hold on deposit any funds on behalf of any member bank, unless in any such case there is a permit therefor issued by the Federal Reserve Board; and the Board is authorized to issue such permit if in its judgment it is not incompatible with the public interest, and to revoke any such permit whenever it finds after reasonable notice and opportunity to be heard, that the public interest requires such revocation."
And, regardless of what you think, the effect of repealing these restrictions was that the US now had several financial regulators, each which had an area of specialty, regulating enterprises which now had no specialty but were now, in the words of Al Sherman, a hungarian goulash of finance.
Which is how you ended up with one of the world's largest insurers, who was loading itself up with MBS CDS's in their London office, being in the charge of a piddilly S&L regulator.
Complex finance makes big profits for institutions who understand the system well enough to make money off of unsophisticated clients/investors (who lose their money). Really complex finance makes big losses for everybody because nobody can understand the system well enough to avoid loss.
Glass-Steagall forced finance to become less complex so that it would make money from "long term greedy" growth and not wheelie dealie wealth redistribution from suckers to traders.
If you don't get that, then clueless is your forte, friend.
#5 Posted by Thimbles, CJR on Mon 28 May 2012 at 08:10 PM
And Jesus, now that the investment bank is dead - replaced by the bank holding companies who can do their risky business with the implicit federal guarantees that people used to say Freddy and Fannie were bad for, you're totally clueless if you think we don't need Glass-Steagall now.
#6 Posted by Thimbles, CJR on Mon 28 May 2012 at 08:43 PM
'It's kinda common knowledge when we talk about the Gramm-Leach-Bliley act's effect on Glass-Steagall that we're talking about the repeal of those sections making federally insured banks separate from the high flyer investment banks.'
And, it's flat out wrong. The sections defining commercial and investment banking are still law. Note the word 'affiliated' in what you quoted from section 20. If a commercial bank and an investment house were now affiliated through a holding company owning both, their balance sheets still have to be kept separate.
You're also wrong on the history of Glass-Steagall. What it did was to create two oligopolies, protected from competition from each other. Until, as usually happens to cartels, modern technology undermined their privileges.
In the ink and paper world of the 1930s, where checks took sometimes weeks to clear, such prohibitions on competition could work. However, when one can move money out of one type of 'bank' into another with the click of a mouse, that game is up. Technology rendered much of Glass-Steagall irrelevant, and it wasn't even applicable to foreign banks anyway.
#7 Posted by Patrick R. Sullivan, CJR on Tue 29 May 2012 at 06:50 PM
"And, it's flat out wrong."
Sure buddy. I say "restrictions on the types of activities allowed by federally insured institutions forces a separation between an enterprise that doesn't have restrictions, because it's not insured by the taxpayer, and one that does," you say "no it doesn't".
Whatever.
"If a commercial bank and an investment house were now affiliated through a holding company owning both, their balance sheets still have to be kept separate."
But that doesn't prevent transfers of uninsured assets onto insured balance sheets, like what BOA recently did.
Glass Steagall (with its repealed sections intact - pedantic correction #1) would have prevented the holding company from buying an investment bank while owning an insured bank. That was why Citi moved to repeal
it(pedantic correction #2) sections of it and would grow to regret that folly.Technology doesn't make a frig of difference to restrictions. Yes, an institution can bump of the frequency of its transactions, but if those transactions have to abide by certain rules and be of similar character, or the bank loses its license, then the bank can be monitored and regulated.
If you throw hungarian goulash at a regulator, nobody knows what's going on and the whole world falls into a pit before long.
Glass Steagall alone may not have prevented a crisis, but not having
it(pedantic correction #3) sections of it made this crisis very very bad because it made each bank into an MC Esher house of stairs so guys could get paid well for telling us which way was up.And it meant that, because of the financial consolidation in the wake of Glass Steagall repeal (f*&% pedantics, I'm tired of this bs.), rating agencies could be threatened by their less diverse and more powerful client base.
You want to claim that European banks and computers make regulation moot? Fine. I don't see why the banks lobbied so hard for so many years to repeal moot regulation, but okay. Think what you want.
Doesn't make you right though.
#8 Posted by Thimbles, CJR on Tue 29 May 2012 at 08:35 PM
I'll go with the guy waving the nobel prize on information asymmetries:
http://www.pbs.org/wgbh/pages/frontline/warning/interviews/stiglitz.html
http://www.cfr.org/foreign-policy-history/roaring-nineties-new-history-worlds-most-prosperous-decade/p6492
"Another example was the repeal of the Glass Steagall Act [What a clueless nobel prize winning economist], which was a separation between commercial banks and investment banks. One of the reasons for this separation was worries about conflict of interest. That became very clear in the Enron episode and in other episodes. Again, we had a debate, the Council took the view that this would be opening up new sources of conflict of interest that we, you know, had been recognized. And this would open up new sources.
They said, "Don't worry. We'll create Chinese Walls.” And first our view was some degree of skepticism about whether these Chinese Walls, how high they would be, and how easy it would be to climb over. But the other argument that we put forth was if there really were Chinese Walls that were really separating the two, then why put the companies together? The reason for putting them together was synergies.
And you could only get those synergies if you talked to each other. So if you really kept them separate, then there is no argument. And you're just opening up a potential risk."
#9 Posted by Thimbles, CJR on Tue 29 May 2012 at 08:42 PM
'I'll go with the guy waving the nobel prize on information asymmetries:'
Stiglitz co-wrote a paper with Orzag in which they argued that there was virtually no chance that taxpayers would ever have to cough up to cover losses at Fannie and Freddie. How'd that work out?
I'll cite that famous right wing economist Alan Blinder;
http://www.bos.frb.org/economic/conf/conf54/papers/blinder.pdf
----------------quote------------
When I was Vice Chairman of the Federal Reserve Board, I was always lukewarm toward repeal of Glass-Steagall. I supported the Board’s pro-repeal position for two main reasons: because markets had torn huge holes in the
alleged walls anyway, and because the government should not ban activities unless it has good reasons to do so (which I did not see in this case). That said, I think the GrammLeach-Bliley (GLB) Act of 1999 has gotten a bad rap in this episode.
I have often posed the following question to critics who claim that repealing GlassSteagall was a major cause of the financial crisis: What bad practices would have been prevented if Glass-Steagall was still on the books? I’ve yet to hear a good answer.
...
Mortgage underwriting standards were disgraceful, but they were promulgated by banks and mortgage finance companies and did not rely on any new GLB powers. The dodgy MBS were put together and marketed mainly by free-standing investment banks, not by newly-created banking-securities conglomerates. All five of the giant investment banks (Goldman, Merrill, Morgan Stanley, Lehman, and Bear) got themselves into severe trouble without help from banking subsidiaries,...and their problems certainly did not stem from conventional investment banking activities (the target of Glass-Steagall).
Similarly, Wachovia and Washington Mutual died (and Bank of America and Citigroup nearly did) of banking diseases, not from entanglements with or losses imposed on them by related investment banks. In short, I don’t see how this crisis would have been any milder if GLB had never passed.
------------------endquote------------
#10 Posted by Patrick R. Sullivan, CJR on Wed 30 May 2012 at 01:35 PM
The four blind mice who represent Manhattan in Congress (Rangel, Maloney, Nadler and Velazquez) were enthusiastic about Gramm-Leach-Bliley which gutted Glass-Steagall. By the way, Bliley was an undertaker in Richmond. These quartette of Congress members has given their masters, the financial services industry, the best regulation money can buy.
#11 Posted by Mike Robbins, CJR on Wed 30 May 2012 at 03:12 PM
From a 1988 GAO report to congressman Ed Markey (D-Mass);
http://archive.gao.gov/d30t5/135024.pdf
---------------quote-------------
In recent years, commercial banks have found ways to overcome some of the Glass-Steagall restrictions and, similarly, nonbanking firms have found ways to undertake some, but not all, banking activities. ....
Coming to grips with the question of Glass-Steagall repeal represents an opportunity to systematically address changes in legal and regulatory structures that are needed to better reflect the realities of the financial marketplace.
....Over the past several years, some banks have acquired substantially expanded powers. The expansion of activities has been the result of these banks (1) undertaking activities that were not explicitly prohibited or were sustained as legal by the courts, (2) introducing new products closely resembling securities, and (3) being given new powers by the regulators. In addition some states have granted significant securities powers to state-chartered banks that are not Federal Reserve members.
...not all banks shared equally the opportunity to become involved. Adopting ways to avoid the Glass-Steagall restrictions was often expensive, so only a limited number of non-banking firms had been able to enter the banking or thrift industries by establishing separate companies such as the nonbank bank or unitary thrift holding company. Moreover, the determining factor that has enabled banks and securities firms to expand into each others' activities has been their ability to spot and take advantage of technical exceptions to the generally strict separation of commercial and investment banking activity required under the Glass-Steagall Act.
....As indicated, the Glass-Steagall laws have already been eroded and erosion is likely to continue in the future.
------------endquote----------
Note well that; '...needed to better reflect the realities of the financial marketplace.'
More than a decade before Gramm, Leach, Bliley, it was clear to the GAO that Glass-Steagall was a dinosaur.
#12 Posted by Patrick R. Sullivan, CJR on Wed 30 May 2012 at 04:20 PM
You are out and out wrong about Sorkin and Glass Steagall and he is probably right. It had nothing to do with the crash. All of the failures like Lehman and Bear Stearns and Merrill Lynch were brokers, so this leads to the question "How did the repeal of Glass Steagall cause these firms to go under?" The answer is it didn't. The crash had many causes, mostly greed, stupidity and the complete failure of regulation under Bush.
#13 Posted by james hanbury, CJR on Wed 30 May 2012 at 08:37 PM
Dear Mr. Sullivan - Your ignorance shows-up in every post. You espouse not only ignorance but ignorant arrogance. You have the audacity to make claims about what is "correct' and "incorrect" on a topic with widely varying and nuanced viewpoints by people much much smarter and much much more educated on the topic than yourself.
Simply quoting Wikipedia entries for Glass Steagall does not make your a legislative expert nor provide you with expertise in financial history. You are simply a hobbyist so please do not attempt to make posts with authority. All that does is make you look like a complete imbecile.
#14 Posted by Patrick R. Sullivan is wrong, CJR on Wed 30 May 2012 at 10:07 PM
Ah Patty. This is going to be fun.
"Stiglitz co-wrote a paper with Orzag in which they argued that there was virtually no chance that taxpayers would ever have to cough up to cover losses at Fannie and Freddie. How'd that work out?"
Wow, that's a great point. How could Stiglitz have wrote such a paper in 2006 when Freddy and Fannie were bingeing on the MBS's that the investment banks started to walk away from when AIG stopped insuring them with unregulated derivatives?
Oh, that paper was from 2002? You mean as the housing bubble was just getting inflated? Two years before the FBI started warning about epidemic mortgage and securities fraud?
Yeah... You know, if a doctor said to a patient "You're in perfect health. I think you'll live for another 30 years," and the patient gets hit by a truck the next week, you don't really get to laugh at the doc and ask "Hey doofus, how'd that work out?"
"I'll cite that famous right wing economist Alan Blinder;"
You go on ahead and site that economist Alan Blinder, the guy who claimed at the Jackson Hole conference in 2005 that "While there are some negatives in the record, when the score is toted up, we think he has a legitimate claim to being the greatest central banker who ever lived. His performance as chairman of the Fed has been impressive, encompassing, and overwhelmingly beneficial—to the nation, to the institution, and to the practice of monetary policy."
Yes, that would be ">the same Jackson Hole conference where actual conservative economist, Raghuram Rajan, made the point that financial complexity, risk shifting, and the incentive systems in place were setting ourselves up for a big dump. This was the paper that got famous in hindsight because the crowd basically called him a luddite and gave him the economist version of an apollo send off.
And to his credit, Alan Blinder was one of the ones who defended him, but yeah, if we are going to play the gaffe game, Alan Greenspan as the greatest central banker that has ever lived is going to rank pretty damn high.
But we're not done.. This is going to be fun, I say.
#15 Posted by Thimbles, CJR on Thu 31 May 2012 at 02:07 AM
Busted links aren't fun.
:(
The Rajan paper:
http://www.kc.frb.org/publicat/sympos/2005/pdf/rajan2005.pdf
Two a Krugman link detailing Blinder's defense.
http://krugman.blogs.nytimes.com/2009/01/03/economists-behaving-badly/
Why you ask? Because,
a) thimbles likes him some krugman
b) "One commenter asks why I didn’t say anything about the housing bubble in The Great Unraveling. Answer: TGU, published in 2003, was put to bed in April 2003, the day after US troops took Baghdad. The housing bubble was still in its infancy." Which is why Stiglitz is stupid, because he didn't predict the housing bubble popping before the housing bubble happened.
PS. Why would you quote a clueless guy like Alan Blinder, who says stuff like "When I was Vice Chairman of the Federal Reserve Board, I was always lukewarm toward repeal of Glass-Steagall"?
Now that I'm done the errata, back to the fun post.
#16 Posted by Thimbles, CJR on Thu 31 May 2012 at 02:20 AM
You see, there's all these people who are saying, "Geez Glass Steagall was good when it was the 1940's, but then we got computers and whistles and all these toys just made it not work no more." but it actually wasn't so when you get into it.
And I got my first clue on this based on an interview with Alan Blinder about the World Com crisis of 2002? (so many crisises as of late, hard to keep track):
http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/interviews/blinder.html
"The 25 percent exemption, which let commercial banks do 25 percent of their business in the securities industry, this pretty well killed Glass-Steagall, de facto. Is that right?
Yes, I think so, with a very, very few exceptions. Somebody whose business plan might have led to 33 percent being securities would be constrained. But very few, if any, banks would've fallen in that category. So for the most part, I think the bankers had very nearly all that they needed under the 25 percent ceiling. They got some legal simplicity by the repeal and a few other things like that. But in terms of actually doing business, I think they could do most of what they wanted before."
"But you were there during the discussions?
I was there during the discussion. I can tell you I had misgivings about going to 25 percent for exactly that reason -- not because I thought it was bad public policy. I had some misgivings because I thought such a large liberalization of the powers and extent of banking ought to be explicitly allowed for by Congress. Not that I thought it was a bad idea, I thought Congress probably should do that, rather than the Fed unilaterally."
What? The? Fiddlesticks?
You see there was a reason that Glass Steagall wasn't as effective. Was it technology? Nope. No, it's funny how laws become ineffective (like Sarbanes Oxley) when regulators and law enforcement stop enforcing them, start giving exemptions. Ya see, the banks were sad because they could see how the Japanese Zaibatsu were about to play around with their money and deposits in the stock market and Americans couldn't.
So Greenspan let them, with a 25% cap. And that was fine until Citibank got a sad because Travelers really wanted to get married and the government couldn't stand in the way of love. Greenspan had already granted them temporary permission to live as man and wife, couldn't congress see it in their hearts to repeal that cruel law tearing asunder what Greenspan had joined?
It wasn't a failure in a law antiquated by modern finance, it was a failure in politicians and the regulators they appointed.
A conclusion Barry Ritholtz agrees with.
http://www.ritholtz.com/blog/2012/05/how-we-ended-glass-steagall/
When commercial banks could only act like commercial banks, people didn't expect them to make the profits and take the risks of high flyers. When commercial banks were told "You can do everything Wall Street can," shareholders demanded "Why aren't you making money doing the risky stuff that Wall Street does?" The answer should have been, "because it's not our money. It's depositors' money and it will be taxpayers' money if we lose it. There's a law that says we can't do that sort of thing."
But that law got repealed, finance got more complex, regulators ability to track the health of their regulatees got reduced, and the world economy suffered a big dump.
Because of bipartisan, free market, anti-regulatory jackoffs who eroded the power of regulation. The regulation worked for 40 years prior to them.
#17 Posted by Thimbles, CJR on Thu 31 May 2012 at 02:56 AM
It looks like Dodd Frank is getting "outdated" and "becoming a dinosaur":
http://therealnews.com/t2/index.php?option=com_content&task=view&id=31&Itemid=74&jumival=8267
"EPSTEIN: Dodd–Frank has not been implemented. The way it was written, it left the field open for hundreds of rules that had to be made by various regulatory agencies, which basically allowed the bankers to come in and spend millions of dollars lobbying to gut the rules and to do in the regulatory stages what they couldn't do in the congressional stage a couple of years ago. So the bankers have spent hundreds of millions of dollars—the latest estimates were well over $100 million last year—trying to gut Dodd–Frank, and they have a multi-front strategy that so far has been very successful.
JAY: And this was part of the criticism I know I think you had mentioned, and other interviews we did at the time on The Real News, was that some of what Dodd–Frank was should have been more law (like you cannot do this) versus regulations (we'll figure out what you can do or can't do), 'cause once it's in the realm of the regulatory environment rather than straightforward law, then the regulatory agencies are subject to, number one, all this lobbying, and two, partly to a large extent what the Republicans are pushing is just simply underfunding these agencies, so even if there is a regulation they can't do anything about it.
EPSTEIN: That's right. And as I said, there's this multi-front strategy. One is to underfund the agencies that have to make and enforce all these rules—the Commodity Futures Trading Commission (CFTC), the Securities and Exchange Commission (SEC). The Republican-led Congress are trying to underfund these. They're also bringing lawsuits against these agencies when they make rules that the banking lobbyists don't like. They're putting forward weekly bills in Congress in the House of Representatives to gut these rules even further. So this process is completely being taken over...
EPSTEIN: It's a waiting game for them, and they're banking on more Republican support. The odd thing, of course, is the Republicans are running on an anti-bank, populist kind of platform, but they're doing nothing but supporting the big banks. And even a number of Democrats are going along.
JAY: Well, I was just about to say it's not like the Democrats, you know, pushed—what Volcker himself actually wanted was a straightforward law, a simple law on this issue. The Democrats in charge of this process, you know, collaborated with the Republicans in making this process so complicated and so open to lobbying. So it's not like they didn't have a chance to do more than they did."
Sigh. Bring back Glass Steagall!
#18 Posted by Thimbles, CJR on Thu 31 May 2012 at 11:33 AM
'Sigh. Bring back Glass Steagall!'
So, why didn't Dodd and Frank do that?
#19 Posted by Patrick R. Sullivan, CJR on Thu 31 May 2012 at 11:54 AM
'Simply quoting Wikipedia entries for Glass Steagall does not make your a legislative expert nor provide you with expertise in financial history.'
Since I didn't do that (I quoted a Blinder paper and a GAO report from 1988 that showed that everyone knew that Glass-Steagall was outdated) it's hard to take you (whoever you are) seriously.
I have made the point elsewhere that it's pretty sad when readers of only Wikipedia would be better informed than those who only read the CJR. Which seems to be true.
#20 Posted by Patrick R. Sullivan, CJR on Thu 31 May 2012 at 12:01 PM
What can you expect from a valued contributor to "Morning Joe" ?
#21 Posted by John , CJR on Thu 31 May 2012 at 12:15 PM
"So, why didn't Dodd and Frank do that?"
What a fantastic rebuttal. *golf clap*
The answer is, quite simply, there is a quiet coup going on. You see it everywhere when you take the time to look into it, but most people don't. They still think that the democrats and republicans are in some sort of gridlock where each side is entrenched and nothing can be moved.
But occasionally you'll hear the truth, that "the banks -- hard to believe in a time when we're facing a banking crisis that many of the banks created -- are still the most powerful lobby on Capitol Hill. And they frankly own the place."
They own the hearts and minds, and when that fails, they have the wallets to fill campaign coffers and to offer post political opportunities with. There is no gridlock when the bankers want something done. There is only gridlock when they want something stopped.
The bankers want Glass-Steagall stopped, they want Dodd-Frank stopped, they want the CFPA stopped, and to me that's reason enough to fight for them.
But that will not be an easy fight:
http://www.rollingstone.com/politics/news/how-wall-street-killed-financial-reform-20120510
"Dodd-Frank is groaning on its deathbed. The giant reform bill turned out to be like the fish reeled in by Hemingway's Old Man – no sooner caught than set upon by sharks that strip it to nothing long before it ever reaches the shore. In a furious below-the-radar effort at gutting the law – roundly despised by Washington's Wall Street paymasters – a troop of water-carrying Eric Cantor Republicans are speeding nine separate bills through the House, all designed to roll back the few genuinely toothy portions left in Dodd-Frank. With the Quislingian covert assistance of Democrats, both in Congress and in the White House, those bills could pass through the House and the Senate with little or no debate, with simple floor votes – by a process usually reserved for things like the renaming of post offices or a nonbinding resolution celebrating Amelia Earhart's birthday.
The fate of Dodd-Frank over the past two years is an object lesson in the government's inability to institute even the simplest and most obvious reforms, especially if those reforms happen to clash with powerful financial interests. From the moment it was signed into law, lobbyists and lawyers have fought regulators over every line in the rulemaking process. Congressmen and presidents may be able to get a law passed once in a while – but they can no longer make sure it stays passed. You win the modern financial-regulation game by filing the most motions, attending the most hearings, giving the most money to the most politicians and, above all, by keeping at it, day after day, year after fiscal year, until stealing is legal again. "It's like a scorched-earth policy," says Michael Greenberger, a former regulator who was heavily involved with the drafting of Dodd-Frank. "It requires constant combat. And it never, ever ends...
money never gets tired. It never gets frustrated. And it thinks that drilling holes in Dodd-Frank is every bit as interesting as The Book of Mormon or Kate Upton naked. The system has become too complex for flesh-and-blood people, who make the mistake of thinking that passing a new law means the end of the discussion, when it's really just the beginning of a war."
Read the whole article, and read this one while at it:
http://www.rollingstone.com/politics/blogs/taibblog/sec-taking-on-big-firms-is-tempting-but-we-prefer-whaling-on-little-guys-20120530
The age of real reform, political integrity, and limits to finance are gone - and we will have to fight like hell to get it back.
#22 Posted by Thimbles, CJR on Thu 31 May 2012 at 01:50 PM
Sorken has decided that maintaining relationships with bankers is paramount to his career trajectory. He's probably right about that. But it means that his journalistic ability is seriously compromised. He does get unparalleled access to influential people, but I would never rely on his analysis. It will always be tempered by what he considers to be most important to his journalistic ambition.
#23 Posted by Jaime Falcon, CJR on Thu 31 May 2012 at 02:04 PM
Hey Pat, I notice you're not only all over the internet on Glass Steagall (like a little Mike H on finance), but you're busy high fiving yourself on your own blog.
Funny, don't see any mention of me pwning you there.
I suppose you'll get on that blog update once you've finished harassing Simon Johnson.
Cheers.
#24 Posted by Thimbles, CJR on Thu 31 May 2012 at 05:51 PM