Comments on: Consumer Protection When All Else Fails (Written Testimony)

By: ‘PRESIDENT OBAMA’S REGULATORY REFORMS ANNOUNCEMENT: A VIEWER’S GUIDE,’ by Simon Johnson at : baselinescenario. com. « Want Less Blog

Wed, 17 Jun 2009 11:57:26 +0000

[...] the need to protect consumers from the financial industry going forward, specifically with a strong Financial Products Safety Commission. Messrs. Geithner and Summers seem, at best, lukewarm to this idea – in fact, we have no clear [...]

By: President Obama’s Regulatory Reforms Announcement: A Viewer’s Guide « The Baseline Scenario

Tue, 16 Jun 2009 13:03:40 +0000

[...] stress the need to protect consumers from the financial industry going forward, specifically with a strong Financial Products Safety Commission. Messrs. Geithner and Summers seem, at best, lukewarm to this idea – in fact, we have no clear [...]

By: New Jersey CFO » We’re Building the Foundation for the Next Crisis - Baseline Scenario

Tue, 16 Jun 2009 11:16:01 +0000

[...] Their view: “[T]he administration will offer a stronger framework for consumer and investor protection across the board.” This sounds incredibly vague and may be the worst news today. It looks like they are backing away from the idea of a Financial Products Safety Commission, for example as proposed by Elizabeth Warren. [...]

By: Today’s Foundation, Tomorrow’s Crisis: The Geithner-Summers Proposals | Politics News

Tue, 16 Jun 2009 10:02:33 +0000

By: ‘FOUNDATIONS FOR FURTHER TURMOIL,’ by Simon Johnson. ‘We are building the foundation for the next financial crisis; by all indications, it will be more disruptive & a great deal more damaging than the crisis of 2008-09.’ A five

Tue, 16 Jun 2009 00:24:14 +0000

By: Geithner-Summers Plan: Dealing with the Underlying Problems in Our Financial System

Mon, 15 Jun 2009 16:26:40 +0000

[...] 5. Their view: “[T]he administration will offer a stronger framework for consumer and investor protection across the board.” This sounds incredibly vague and may be the worst news today. It looks like they are backing away from the idea of a Financial Products Safety Commission, for example as proposed by Elizabeth Warren. [...]

By: Today’s Foundation, Tomorrow’s Crisis: The Geithner-Summers Proposals - The Plank

Mon, 15 Jun 2009 14:10:42 +0000

[...] Their view: "[T]he administration will offer a stronger framework for consumer and investor protection across the board." This sounds incredibly vague and may be the worst news today. It looks like they are backing away from the idea of a Financial Products Safety Commission, for example as proposed by Elizabeth Warren. [...]

By: Today’s Foundation, Tomorrow’s Crisis: The Geithner-Summers Proposals « The Baseline Scenario

Mon, 15 Jun 2009 12:22:03 +0000

By: broker

broker — Mon, 01 Jun 2009 09:18:10 +0000

OHH Great post! I’m loving your website;

By: JakeS

JakeS — Mon, 25 May 2009 16:35:16 +0000

You forgot one:

THE SPICE MUST FLOW: The backbone infrastructure – railways, the telecom backbone, the payment clearing system, the electrical grid and the water supply cannot be privatized successfully. Because these are system-critical natural monopolies. In other words, privatisation results in less efficiency (if there are multiple operators) or in a single company being able to exercise monopoly power (i.e. hold society to ransom by taking crucial infrastructure hostage).

- Jake

By: Michael

Michael — Mon, 25 May 2009 08:06:15 +0000

“1. We need layers of protection against financial excess. Think about the financial system as a nuclear power plant, in which you need independent, redundant back-up systems – so if one “super-regulator” fails we don’t incur another 20-40 percentage points in government debt through direct and indirect bailouts. A consumer financial products protection agency should definitely be part of the package. Update: The Washington Post reports that such an agency is now in the works; this is a big win for Elizabeth Warren, Brad Miller and others.”

This more than welcome development is long overdue. As badly needed as this is, ideally its creation wouldn’t be tied to continued public outrage and the resulting stoked political indignation and will. Hopefully there is more than enough momentum to get this done and in a manner that ultimately renders our hopes for such an agency rewarded and well spent.

By: JakeS

JakeS — Mon, 25 May 2009 08:02:02 +0000

The holding companies are not the problem. The system-critical banks could be stripped out from those companies, divided into good bank/bad bank, the good bank confiscated (subject to fair compensation, as decided by the public regulator – if the holding company disagrees, it can go to court), and the bad bank with all the toxic, radioactive waste could be dumped on the holding company.

Then the holding company goes into Ch. 7 like every other insolvent pyramid scam.

Oh, and the CEOs go with the bad bank. And if they want their bonuses and golden parachutes, they can line up as the most junior creditor of an insolvent holding company.

Then you start prosecuting. Start with the war crimes trials for Clinton, Cheney and Cheney’s trained monkey. Then you move down to the counterfeiting operation – sorry, “off-balance-sheet-SPVs,” my bad – of Morgan and GoldmanSachs. And when the fatcats and their apparatchiks start crying “limited liability,” you reply “sorry, no points. Limited liability or not, counterfeiting money remains illegal.”

Finally, you make a campaign finance reform along the lines of the German rules, and impose confiscatory wealth taxes on fortunes in excess of a quarter billion €, in order to kill off the robber barons as a political power factor once and for all.

Simple.

- Jake

By: links for 2009-05-22 « Lasting Impression

links for 2009-05-22 « Lasting Impression — Fri, 22 May 2009 16:15:33 +0000

[...] Consumer Protection When All Else Fails (Written Testimony) « The Baseline Scenario The critical weakness in our system is that bank executives get to keep their jobs and their money. All key insiders should be fired when their banks become insolvent (as part of the government intervention and support process), irrespective of the reason for that insolvency. They should also be subject to large fines, equal to or in excess of the value of their total compensation while leading the bank that failed. As things currently stand, powerful insiders have learnt that they can gamble heavily and never lose personally or professionally. (tags: responsibility accountability risk bailout tarp banking finance moral_hazard government regulation incentives greed recession simon_johnson) [...]

By: Per Kurowski

Per Kurowski — Thu, 21 May 2009 19:04:46 +0000

We need names!!! Of real people!!!

Whatever it might be high time to put some humans in the front line and disallow all this hiding behind corporate veils turned into cloaks.

No more credit ratings without the five professionals most responsible for those ratings putting their name on that rating… for better and for worse.

By: Anonymous

Anonymous — Thu, 21 May 2009 19:01:31 +0000

A good theory! I hope we can start live and work by these rules.