This guest post was submitted by David Moss, professor at Harvard Business School, author of When All Else Fails: Government As The Ultimate Risk Manager, and founder of the Tobin Project.
As currently drafted, the Financial Stability Improvement Act of 2009 (released by the House Financial Services Committee on 10/27/09) contains several important elements for reducing systemic risk. It aims (1) to identify systemically dangerous financial firms, (2) to apply heightened regulation to these firms, (3) to establish a stabilization system to prevent or quell panic during periods of systemic distress, and (4) to create a resolution mechanism that would wind down complex financial firms when necessary. These could represent very important steps forward.
Unfortunately, these reforms may ultimately be undermined by one very significant weakness – the explicit requirement in the bill that the identification of systemically dangerous financial firms by federal regulators remain entirely secret, and never be revealed to the public. This is the bill’s Achilles heel.
The decision that there be “no public list of identified companies,” as the bill currently reads, stems from a belief that secrecy about the identity of these firms will limit moral hazard. However, after more than a year of costly bailouts, the federal government’s implicit guarantee of major financial firms is, sadly, rock solid. To try to make it magically disappear by refusing to name the most systemically dangerous firms not only won’t work, but will severely jeopardize the effectiveness of the regulation itself.
To maintain the pretense of secrecy, the bill includes some very unfortunate compromises:
● First, the bill does not require the systemic regulator to adopt a consistent (or universal) set of tough standards for all systemically dangerous firms, presumably to avoid compromising the secrecy surrounding these “identified” financial institutions.
● Second, the desire to hide these firms’ regulatory status (as systemically dangerous) means that they cannot be assessed fees in advance to cover their share of a resolution or stabilization fund; instead, the bill envisions ex post assessments on a much larger pool of firms, including a great many that are not systemically dangerous. (This would be like charging renters to cover the fire losses of homeowners.)
● Third, the attempt to ensure secrecy requires that all of the regulators’ reports to Congress themselves remain strictly confidential, thus weakening – and perhaps crippling – the essential process of democratic oversight.
Perhaps most disconcerting, all of these compromises will most likely be for naught, since the desired secrecy seems almost impossible to achieve. Virtually everyone already knows the identities of the most systemically dangerous firms; and, beyond that, leaks are inevitable.
Moreover, to the extent that secrecy was somehow maintained, it would leave the systemic regulator highly vulnerable to capture by the very financial institutions it was charged with regulating. Just imagine how weak regulations would become if the regulated firms themselves were the only parties that could weigh in on a proposed regulation, since the regulatory process was required to be hidden from everyone else.
The proposed legislation has many strengths. But without greater transparency, it will inevitably fall short – both in eliminating “too big to fail” financial firms and, most importantly, in preventing the next financial crisis. To be successful, the final legislation must require the creation of a public list of all systemically dangerous financial institutions; and it must ensure that these firms are subjected to dramatically heightened regulation to control excessive risk taking. In fact, the regulation of these firms must be so tough that they feel a strong incentive to slim down or break up in order to get off the list. Such a vital public mission will never be achieved in the shadows. (For more on this, see my recent piece on financial regulation in Harvard Magazine.)
By David Moss
The Baseline Scenario 
¨the bill does not require the systemic regulator to adopt a .. set of ..standards for all systemically dangerous firms¨
David, why should there be a set of standards for systemically dangerous firms at all?
Haven´t we learned anything at all? Too big to fail is too big to exist! Why should we accept the mere existence of systemically dangerous firms? It has become very clear that whatever the benefits of those TBTF firms, these benefits are much smaller than the damages! Oh, and the benefits are for management only, while the damages are for the clients (higher fees due to oligopolistic market power) and the taxpayers.
Let us compare the financial infrastructure with the internet infrastructure. On purpose, the internet consists of many, many nodes. Traffic can be routed along multiple routes. Nodes are down all the time, however, users do not notice as traffic can easily bypass those down nodes. Down nodes get up again and others temporarily fail; there are no systemically important nodes. We should demand a similar financial infrastructure: NO systemically dangerous firms.
¨The decision that there be “no public list of identified companies,” as the bill currently reads, stems from a belief that secrecy about the identity of these firms will limit moral hazard. ¨
I had to read that sentence twice, and still do not understand it. No identity will limit moral hazard? What is the argumentation?
¨In fact, the regulation of these firms must be so tough that they feel a strong incentive to slim down or break up in order to get off the list. ¨
Instead of these firms feeling a strong incentive to slim down, why not force them to slim down? Look at what´s happening in EU right now: banks which received state aid are forced to slim down.
¨the bill does not require the systemic regulator to adopt a .. set of ..standards for all systemically dangerous firms¨
David, why should there be a set of standards for systemically dangerous firms at all?
Haven´t we learned anything at all? Too big to fail is too big to exist! Why should we accept the mere existence of systemically dangerous firms? It has become very clear that whatever the benefits of those TBTF firms, these benefits are much smaller than the damages! And the benefits are for management only, while the damages are for their clients (higher fees due to oligopolistic market power) and the taxpayers.
Let us compare the financial infrastructure with the internet infrastructure. On purpose, the internet consists of many, many nodes. Traffic can be routed along multiple routes. Nodes are down all the time, however, users do not notice as traffic can easily bypass those down nodes. Down nodes get up again and others temporarily fail; there are no systemically important nodes. We should demand a similar financial infrastructure: NO systemically dangerous firms.
¨The decision that there be “no public list of identified companies,” as the bill currently reads, stems from a belief that secrecy about the identity of these firms will limit moral hazard. ¨
I had to read that sentence twice, and still do not understand it. No identity will limit moral hazard? What is the argumentation?
¨In fact, the regulation of these firms must be so tough that they feel a strong incentive to slim down or break up in order to get off the list. ¨
Instead of these firms feeling a strong incentive to slim down, why not force them to slim down? Look at what´s happening in EU right now: banks which received state aid are forced to slim down.
(1) It seems that “systemically dangerous” implies “systemically important”, which means “must be handled with extra care and not allowed to fail”.
(2) All the talk about heightened regulation, heightened capital requirements, etc. might mean additional burden for the financial institution to which it will be applied, but the mere fact that it is viewed by the government as systemically dangerous (= systemically important) would be viewed as a positive by this institution’s counterparties, because they know they government will intervene if needed, and therefore they are likely to find themselves in a position of AIG counterparties.
(3) The authors of the bill seem to believe that absent an explicit confirmation by the government, the market will assume that a given financial institution is not systemically dangerous (= systemically important). In all likelihood it will be the exact opposite – any financial institution with a meaningfully large balance sheet or large notional amount of the derivatives book will be assumed to be systemically dangerous (= systemically important) and hence guaranteed government support in the case of a crisis. In other words, the bill essentially says that the government will bail out some financial institutions but it refuses to say which ones specifically. As a result, it will be viewed as a blanket promise of a bailout for any financial institution.
Barney Frank has labored mightily and brought forth a mouse. He seeks to create a Star Chamber of failed regulators which will operate in secret to identify individual financial firms deemed (who knows how) to represent heightened systemic risk, then, without telling anyone, the Closeted Solons are empowered strongarm those players who cannot wiggle out of it during entirely private proceedings conducted God knows where into transfering assets and liabilities posing excessive systemic risk to other firms, presumably better able to absorb it, although why they would want it is not immediately clear. The idea is to keep everyone in the dark so that nobody can protect himself or his money and one morning we wake up to a fait accomoplis and a handful of dust. Well, why not? It’s only money and they can always print more.
A thoughtful person might ask why we should trust the members of Barney’s Financial Hindsight Council, who are the very same people who allowed this forten zoffer to fester and then explode over the past fifteen years? Why not financial statement transparency, current value accounting, progressive taxation and criminal prosecution of financial fraud?
No doubt we will have to await a new Congress for anything like that.
You have the cart before the horse. Have you ever considered that the “unfortunate compromises” are not the result of the decision that “there be no public list” of systemically important institutions, but that the need for privacy IS THE RESULT OF:
First, the desire TO AVOID adopting a consistent (or universal) set of tough standards for all systemically dangerous firms, HENCE ALLOWING FAVORITE STATUS TO BIG CONTRIBUTORS.
Second, the desire TO AVOID assessing fees in advance to cover TBTF institutions’ share of a resolution or stabilization fund because THE INSTITUTIONS in question DO NOT WISH TO PAY “federal capital insurance equal to 10 percent of total assets” and will lobby against and refuse to support the campaigns of Congressman who vote for such a fee.
Third, TO ENSURE “all of the regulators’ reports to Congress themselves remain strictly confidential, thus weakening – and perhaps crippling – the essential process of democratic oversight” AND THEREBY STRENGTHENING AND SHEILDING CONGRESS FROM SCRUTINY.
The draft is unacceptable. UNACCEPTABLE. Barney Frank may enjoy taking it in the rear, but I don’t.
I believe the writer has buried the lead. Here it is:
That’s not a bug, it’s a feature.
As Marcus Aurelius taught, we should look first at what it is on its face.
Just as every step of the bailouts has been anti-democratic, with as much Cheneyesque secrecy as possible, so here too it’s obvious that the goal is to thwart transparency, and therefore accountability, and therefore democracy.
On its face it’s absurd that secrecy will limit moral hazard.
1. The government and the firms themselves will know who they are, and everybone else will have a pretty good idea.
2. Across the board moral hazard has been institutionalized as the law of the land anyway. This is proven by the administration’s open proclamations, right from the start of its tenure, that its first priority was to prop up big banks and preserve private profits. All its actions have followed from this. Every last one.
So everybody KNOWS that in the eyes of the administration moral hazard is no longer even a “hazard”, but the desired status quo, the desired outcome of policy.
Another laughable notion is that this same failed legislative and regulatory cadre who collaborated with the banks in destroying the economy will now somehow really try to “regulate” those same banks.
So we have three leading indicators of blatant bad faith and corruption:
1. Too Big To Fail and its bailout as the highest policy of the land.
2. The anti-public, pro-bank record of all major government actors throughout this century.
3. The open hostility to democracy this administration has carried over from Bush/Cheney on pretty much every front, but which it’s especially obsessive about where it comes to bank looting policy.
This would be like charging renters to cover the fire losses of homeowners.
That’s pretty much the essence of all these bailouts, which by definition are extraordinarily regressive.
Indeed, in seeking to prop up bloated residential real estate prices and reflate that hideous bubble, it’s literally making renters subsidize homeowners to their own economic detriment. They have to pay to price themselves out of home ownership.
Risk is one thing. Worse, though, is the massive diversion of capital towards activities that ought to be unlawful. To the point activities that are necessary for the continuation of civilization find themselves without capital.
Focus on fixing #2:
“…the bill envisions ex post assessments on a much larger pool of firms, including a great many that are not systemically dangerous. (This would be like charging renters to cover the fire losses of homeowners.)”
Slightly worse – it would be like charging them insurance AFTER everyone discovered the entire banking sector is bankrupt. It is PRO-cyclical, not anti-cyclical. And can we honestly imagine charging banks those supplemental fees in October of last year? (That would have worked splendidly.)
Those fees MUST be pre-paid, and held in escrow at the Federal Reserve. Arguably, the escrowed account could cover part of the higher capital ratios required for larger firms. I understand that this implies the firms will have to report this in financial statements, which means they will be named – but pre-payment is the ONLY way this sytem will help at all.
This system still creates some moral hazard, but at least the moral hazard is concentrated among a class of firms – and it creates incentives for true self-policing. If Big Firm JP knows that Big Firm LB is doing something dumb, which could soak up its escrowed pre-paid “systemic risk” insurance, then Big Firm JP may try to stop it (via legislation or legal action or public attention).
Geithner ounds like he is in Prof. Moss’ corner on fees. Geithner just said something to the effect that, in the future, the financial industry will have to pay for its own cleanup if failures occur in the future. Isn’t that the reason the Treasury and the Fed got involved in the crisis? There were no other sources of the immense capital required to stop the bleeding. In fact, the blood still hasn’t been cleaned up. A 10% fee on total assets would be a start but I wonder, if the exposure of the culprits in the current crisis was limited to 10% of total assets, would the crisis have occurred in the first place. Would a 10% cushion prevent systemic risk?
This is a step in the right direction, or maybe a half step, or maybe a 1% step. Once again, until we reinstate Glass-Steagall, and eliminate the “reform” enacted under “Gramm”, we won’t see any real improvement in the degree that the economy produces a balanced growth curve. It is easy to see that the economy is completely “warped” under the current system, and this new law looks like a bandaid for the problem requiring real surgery.
Unless and until our campaign laws are reformed, every measure will be controlled by the big lobbies, but then that’s just life in the plutocracy in which we presently (and will continue to) live.
As always, there is the major caveat preventing transparency. There is a reason why most thieves prefer the cover of darkness!!!!!
I’ve said on this site many times before That I have extremely high respect for Alan Blinder. Professor Blinder was a former member of the Board of Governors of the Federal Reserve and quite knowledgeable on these issues.
Professor Blinder has literally spoken for YEARS about the importance of transparency of the Federal Reserve and it’s decisions. He recently gave a paper/speech at the Federal Reserve Bank of Boston. I highly recommend reading this to anyone concerned about these issues, and those people paying tax dollars to keep Goldman Sachs and pals afloat in the market. Goldman Sachs would not exist today if it wasn’t for the U.S. taxpayer footing the bill for their irresponsible losses and uncapitalized risks.
Blinder’s writing style is engaging. Enjoy!!
Click to access blinder.pdf
Let me just add one more thing. TRANSPARENCY is extremely extremely important to any healthy economic system. It is that TRANSPARENCY which allows us to hold bankers’ and politicians’ feet to the fire.
Obviously these guys are not afraid of Barney Frank’s game of patty-cake. They’re not too scared of Bernanke either. And Big bank CEOs didn’t see the point in attending President Obama’s speech to Wall Street. The American voter is the last line of defense here. And if we let these politicians pass financial laws that blindfold the American taxpayers’ eyes, what will happen next?? The bankers will grow a conscience out of guilt over the kindness Barney Frank has shown them??
You don’t cure dysfunctional markets by HIDING risky behavior. You cure dysfunctional markets by STOPPING it.
The real problem comes from the provision to visit losses on creditors. LIBOR rates will skyrocket if this passes.
I find it difficult to believe that cost of doing all these things will be outweighed by the theoretical and likely illusory benefits that big banks are supposed to provide.
And those costs are just the ones that we can see. There is also a risk of unintended consequences from moral hazard and everything else that’s been pointed out above.
Is there anyway to revive the anti-trust argument?
How they should be regulated:
http://www.comedycentral.com/videos/index.jhtml?videoId=219426&title=tron-carters-laworder
Arrgh! I just heard Geithner live and he is in favor of AFTER-the-implosion fees on ALL systemically dangerous financial firms on the secret list if one should fail. Geithner’s rational is that the survivors benefit from the resolution of the culprit institution because the survivors receive protection from the panic that would arise and spread to all. The fees, according to Geithner, would be used to repay any taxpayer money used to “resolve” or dissolve the culprit.
There seems to be an underlying assumption in all that I read that the bankers knowingly took on too much risk, however, I see no evidence that they did this knowingly, in fact, I see quite a bit of evidence that they took on risk cluelessly. This behavior qualifies as really bad management – it is the job of management to understand the risks being taken and to have contingencies for mitigating those risks – this has been sorely lacking since the M&As. I believe it is not possible to force competent management through regulation, therefore, the sphere of impact of bad financial institution management should be limited by size and the types of businesses allowed. Regulating this situation in the darkness of privacy as described in the post is probably one of the worst possible non-solutions.
Please keep such characterizations out of this forum. It is one of the few fora on the web that maintains a reasonable and civil tone.
“Haven´t we learned anything at all? Too big to fail is too big to exist!”
I think Carol gets right to the point. Twice.
Seems like Prof Blinder’s paper jogs effortlessly around the bases showing us how smart he is and recommends nothing of substance. What exactly is he proposing that will help?
NOW you’re talkin’
Moss is the editor of New Perspectives on Regulation which includes a chapter by Yochai Benkler on how help a society regulate itself. Note the emphasis he puts on transparency. Educate and vet administrators properly, and have legions of seniors watch what they do. Just be careful that it’s true transparency, not just windows in a Potemkin Village.
Today I read the WSJ article where FDIC’s Sheila Bair commented to Congress that she didn’t think there was enough independence in the oversight counsel and that it does not make sense to ask for TBTF banks to pay in after there is a failure, rather than paying into such a fund prior to a failure. I find myself paying special attention to what Ms. Bair says as I think she is a financial outsider and because of that has a clearer view of what should be done to protect the taxpayer. And after watching the Frontline report on Brooksley Born’s warning to Congress about the need to regulate derivatives and the poor treatment that the boy’s club of Greenspan, Summers and Rubin gave her at the time….it just highlights the importance of listening to an outsider’s opinions even more. Conflict of interest / intellectual capture is alive and well in DC and while that segment usually speaks the loudest, often their loud voice does not equate to the reasonable and logical voice.
On the other hand…
The Tobin Project is just another think-tank (funded by whom?). Uncle Wiki tells us that Tobin had a big influence on both uberflacks Bernanke and Krugman. He was part of the Cowles Commission which sought to “was dedicated to the pursuit of linking economic theory to mathematics and statistics. Its main contributions to economics lie in its creation and consolidation of two important fields: general equilibrium theory and econometrics.” In other words, use fancy math to cow us into eating whatever policy they wanted us to eat. Tobin won the big econ prizes, which, of course we now know, puts him in a very unflattering light. (Because we now understand the credibility game).
Look at some of the other names associated with the Tobin Project: Eizabeth Warren, check. And Doris Kearns Goodwin.
http://www.tobinproject.org/welcome/about/leadership.html
(Anyone know anything about this “Mai Family” Foundation?)
So, Goodwin. She’s quite the PR maven herself. She wrote the book a few years back that helped us get to Hilary Clinton, and convince us that she cares deeply about the world and the people in it. Serendipitously, her publicist, Beth Laski is my neighbour. Ms. Laski, who used to work for the LA Daily News, Variety, CBS 2 News, Hollywood Reporter, & Universal Pictures, now runs her own shop, and “consults” for “The State of The USA.” They are associated (synonymous with?) the “Gov 2.0” initiative, and O’Reilly Media seems to be closely involved with them as well.
Judging by the huge money behind all of this activity, (hint, the same big-money interests that set fire to our happy little screwed up global economy) these smiling, polished, well educated folks might not be the ones we should have influencing our opinions and behaviour.
…and Benkler’s involved with all this too, eh? Curiouser and curiouser.
Should be: “that helped us get to know Hilary…”
I think that the plan creates a kind of de facto merger of these organizations. If each are to be possibly “punished” or “rewarded” by the failure of the others it seems logical and dangereous that they would collude to activities together so that no one firm fails by itself. If all fail then we are back to a government sponsored bailout. This in effect has the players acting as one organization, a situation the law would not permit, or would it?
I don’t think Sheila Bair is what we can truly call a “financial outsider”. Nonetheless Miss Bair is worth listening to and has a lot more intelligent things to offer than many people in the discussion.
It’s interesting to note that Gary Gensler has Brooksley Born’s old job as Chairman of Commodity Futures Trading Commission (CFTC). He is finding himself screaming to be heard, just like Brooksley Born was. Frank seems to be putting a lot of weak language in the draft legislation (we can guess who might have helped Frank write the draft). From the Bloomberg Oct. 8, 2009 story:
“A plan offered by the Obama administration would subject all swaps dealers and “major market participants” to new regulations for capital, business conduct, record-keeping and reporting. Frank’s version would exempt corporations from that definition if they use derivatives for “risk management” purposes. While Frank’s proposal is a “step in the right direction,” its “ambiguous” definition of risk management may leave a large number of corporations unregulated, Henry T.C. Hu, director of the SEC’s new division of risk, strategy and financial innovation, told the committee.”
Also from the Bloomberg Oct 8, 2009:
“It is clearly the weakest of all the proposals I’ve seen to date,” said Christopher Whalen, managing director of Institutional Risk Analytics in Torrance, California, in an interview before the hearing. Whalen, who has testified before Congress on derivatives regulation, is an independent bank analyst. “Frank’s committee seems to be intent on gutting any meaningful reform.”
I have a feeling that in short-time the Big banks and Congress will make being Chairman of the Commodity Futures Trading Commission (again, Brooksley Born’s old job) something similar to becoming Ambassador to Iceland or Ambassador to Zambia.
Here is the link to the Bloomberg story by Tina Seeley and Dawn Kopecki http://www.bloomberg.com/apps/news?pid=20601087&sid=a7fAFtZGaGAk
Please sell snake oil elsewhere:
“Assistant Secretary for Financial Institutions at the U.S. Department of the Treasury (2001 to 2002), Senior Vice President for Government Relations of the New York Stock Exchange (1995 to 2000), a Commissioner and Acting Chair of the Commodity Futures Trading Commission (1991 to 1995), and Research Director, Deputy Counsel and Counsel to Kansas Republican Senate Majority Leader Robert Dole (1981 to 1988). While an academic, Bair also served on the FDIC’s Advisory Committee on Banking Policy. Bair also pursued a seat in the U.S. Congress (she lost the 1990 Republican nomination in the 5th Kansas district by 760 votes to Dick Nichols). Bair began her career in the General Counsel’s office of the former US Department of Health, Education and Welfare”
This is an outsider? Either you’re a paid astroblogger (my pet word for bloggers that astroturf) or really really gullible. I believe we covered Ms. Born in another post. And no, I’m not a misogynist. It could very well be that women are being used in this propaganda war for a specific reason.
““Gentlemen, I have had men watching you for a long time, and I am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country. When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter, I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin! Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.”
ANDREW JACKSON, SPEAKING TO INTERNATIONAL BANKERS IN 1832
I post this quote from the right Honorable President Andrew Jackson with the intent of demonstrating the kind of courage, and righteousness necessary to right the current horrible wrongs of our financial system.
Jessica at 8:22am hits the mark. The only – THE ONLY reason for secretiveness in this circumstance is hiding the horrible truth. The size of the institution is not so critical as that institutions ability to function lawfully and successfully. THERE IS NO SUCH THING AS TBTF!!! If large or small institutions FAIL, they should and must suffer the consequences of that FAILURE!!! Heaping all the costs and burdens of that FAILURE on the American taxpayer is a political choice, not a mathmatical necessity. TBTF oligarchs are shielded by our government for untoward, illicit, insider, illegal and immoral predatorclass reasons that undermine the rule of law and every principle that good government is founded upon, and cause grave injury to the larger society for predatorclass gains exclusively. NO ONE ELSE ON EARTH benefits from bailing out TBTF oligarchs, outside of the oligarchs themselves, the predatorclass operators who profit from those oligarchs, and the forked tongued politicians that promote and advance the interests of the predatorclass and the oligarchs, and heap all the monsterous costs, burdens, and horrible pains on the people. A pox on the American finance sector!!!
If there were any courageous leaders and any politicians truly giving voice to the voiceless, we all would hear them say publically in righteous indignation to the thieves, swindlers, PONZI operators, and criminals the US finance oligarchs “You are a den of vipers and thieves. I intend to rout you out, and by the eternal God, I will rout you out.”
Alas there are no courageous leaders now, and no one giving voice to the voiceless. All we know today are politicans on the payroll and in the pocket of the predatorclass!!!
I believe in free speech “Uncle Billy”, but did it ever occur to you that when you attack people who are basically on your side, in the end it gets you nowhere??? And by the way, maybe all these cute conspiracy stories you come up with, might make the site look more wacko??? You know even Noam Chomsky doesn’t believe 911 was a U.S. government conspiracy. You could learn something from him.
Go away please.
UB – you have your definition of an insider and I have mine. Great job searching, cutting and pasting though!
http://www.sourcewatch.org/index.php?title=Astroturf_blogging
When I wrote and discussed the dangers of systemic risks 1997-2004 I was primarily referring to the systemic risk of having too few regulatory systems and therefore too many going off in the wrong direction, and of the systemic risk of all following too few credit rating agencies. Now what is mostly referred to as systemic risks in the discussions is “the too big to fail issue”.
If the “too big to fail” is systemic risk and they are going to supervise systemic risk, then the only thing I know is that the “too big to fail” are just going to get bigger, and I shiver about the implications of pre-authorizing the possibility of a bail-out of a bank because it is deemed a systemic risk. Sincerely this is getting crazier by the day.
I can already hear some popular love songs coming up… “Baby if you’ll be my little systemic risk, I’ll be your regulator man!”
“Barney’s Financial Hindsight Council”
nice satire :)
“In fact, the regulation of these firms must be so tough that they feel a strong incentive to slim down or break up in order to get off the list.”
… which has a snowball’s chance in hell of happening, because that’s the opposite of what financial lobbyists are pushing for. This bill, as described, has all the trappings of the usual legislation designed to look like the politicians are “doing something” without changing the status quo. So, business as usual. No surprise there.
The politicians are the field managers for the plantation owners, they conspire.
Please direct your attention to the right honorable Ron Paul of Texas.
In some places though, like in Venezuela, “The Politician” owns the oil plantation directly, and needs no one to conspire with… and that makes it even worse.
OK, I am just a stupid housecat and rooter out of Commies, but what “activities ought to be unlawful” are you talking about?
I can think of several, many of them related to financial circuses, but I am not sure yet if we are at all on the same page here.
Silly me, but I thought fraud was unlawful.
Prompt Corrective Action is also (toothless) law.
Enforcing these would be a start…
If Hugo wasn’t so busy living it up at fancy hotels with Michael Moore, he’d get you for that.
If I were to find out the names on this list, I would consider it my patriotic duty to reveal them to everyone else.