Von Aldo

Surprise! Americans Don't Think Financial Fix Will Work

According to a Bloomberg poll, most Americans don't believe the financial regulatory overhaul legistlation to be voted on this week would do much to prevent another financial crisis.

Bloomberg today writes, "Almost four out of five Americans surveyed in a Bloomberg National Poll this month say they have just a little or no confidence that the measure being championed by congressional Democrats will prevent or significantly soften a future crisis. More than three-quarters say they don’t have much or any confidence the proposal will make their savings and financial assets more secure."

Let's face it: Regulators already had the power to prevent the last crisis: They could have required less leverage, they could have dismantled or reigned in Fannie and Freddie --- the true causes of the housing bubble --- and several other things. As Mark A. Calabria of the Cato Institute puts it: "The Dodd-Frank bill claims to address this failure by eliminating agencies, such as the Office of Thrift Supervision, or transferring regulatory responsibilities, such as consumer protection, from existing agencies. What the press releases leave out is that all of the same bureaucrats behind the failures also move to the new agencies along with their previous responsibilities."

“The mood of the American public is highly skeptical toward government and its ability to do right by the average person,” says J. Ann Selzer, president of the polling firm [Selzer & Co.]. “That explains some of the apparent contradiction in seeing a need for more regulation yet having little confidence that what is currently on the table will do much for consumers. They just feel they’ve been played and they don’t want to be fooled again.”

Calabria concludes: "There is probably no regulator who was more asleep at the wheel than the Federal Reserve Bank of New York. Yet, in what must be a new twist on the Peter Principle, the New York Fed's leadership during the crisis, Timothy Geithner, was promoted to Treasury secretary and placed in charge of Obama's financial reform efforts." In short, meet the new regulators, same as the old regulators.

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