"The whole aim of practical politics is to keep the populace alarmed, and hence clamorous to be led to safety, by menacing it with an endless series of hobgoblins, all of them imaginary." H. L. Mencken
The hobgoblin that is often used by the Wall Street banks is that if this or that reform is introduced, it will lessen their competitiveness, and their craftiest and most clever employees will leave the country to work for foreign banks.
Is that supposed to be a threat? That sounds like a plan. And let them deduct the price of a one way coach class ticket.
It should be painfully obvious by now, that despite his recent crocodile tears and phony fist waving, that Larry Summers and crew Obama are being bossed around by the banks, for whatever reasons that charity might prevent one from saying.
It is time for a real change, in most cases bringing back what was taken apart over the past twenty years.
If you are a bank, and you take deposits and obtain access to the Fed window and FDIC, you should do nothing other than traditional commercial on balance sheet banking. Period.
If you are an investment bank, you are a no better than a hedge fund. There should be strict limits on the quality and levels of the capital which you employ. And your partners should be exposed to the full extent of your losses. Yes, the full extent.
In the markets there needs to be position limits. If you exceed the position you get fined and surrender 100 percent of any gains. If you do it again your trader gets his license suspended. A third time and your trading license is revoked until you can prove you have gotten your internal controls together.
As for naked short selling. Forget about it. If you fail to deliver within 24 hours you are forced to cover on a market order, like a margin call.
If you receive an exemption for legitimate commercial hedging, your position is published with your name on it on a weekly basis. After all, your hedging decisions are based on information which should be disclosed, sooner rather than later.
The timely disclosure of pricing and volume information in any market is public information and should be disseminated to all parties at the same time, without predatory pricing that inhibits access by the average investor. Or better yet, just make the information feed free, and take the costs as a part of doing business as a licensed exchange.
There are criminal penalties on the books for white collar crimes. When corporations engage in fraud, those penalties should apply to the perpetrators within the firm. The current regime of wrist slap fines from the SEC to be absorbed by shareholders makes the risk-reward ratio an incentive for breaking the law. There needs to be a section of the FBI that deals only and specifically with white collar crime, not as a task force, but as part of its organizational structure.
Corporations, including non-profits, foundations and trusts, are not people, and they do not vote. Only voters should be able to contribute to political campaigns. If this creates a financial problem for politicians who rely on millions of dollar to fund elaborate media and public persuasion campaigns, well then, too bad. There is always the option to pursue public campaign funding. They might actually have to say things and stand on a genuine record actually reported by a legitimate news media.
Time to break up the media conglomerates. Period. The news organizations cannot be controlled by a few corporations. There were limitations on news outlet ownership for many years which were repealed. Bring them back. Diversity of ownership brings checks and balances.
And the financial activity of lobbyists should be limited, recorded, and disclosed on a monthly basis, and in detail. You or any member of your staff go to lunch with a lobbyist, the amount which you accept is reported along with the subject matter discussed. You are a registered lobbyist, and all your lobbying related phone calles and text messages become a matter of public record. The public deseves to hear your case as well as their representatives.
The revolving door between lawmakers, regulators, and the businesses with they oversee must be slammed shut for a period of no less than five years. Time to bone up on a trade besides influence peddling, congressman.
Would this prohibit the best minds from serving the public? Are you kidding me? Look at the government in Washington now. If those are the 'best minds' then the US is in real trouble.
If the US wants to get back on its feet, it is going to have to get serious about restoring its liberty and an even playing field for all its people.
This would be a start. Next up, tax code reform. You want a flat tax? I'll give you a flat tax....
