The lack of political leadership

[bills_fan]

Three major national institutions (LEH, MER, AIG) have folded over the last 4 days and no longer exist. Many others are in real trouble. Where is the politcial leadership?

 

Patterson got out in front of AIG and played an instrumental role in helping to save the system. But AIG was an insuance company, which is State regulated.

 

Where has the President of the United States been? I haven't heard from him. He's maintaining radio silence throughout this whole crisis.

 

His administration is pursuing a reactive, ad-hoc strategy in stead of getting in front of the problem, via RTC II.

 

And Congress? From todays WSJ, a solution I've advocated since March...

 

If that fails, then the best and perhaps only recourse is to create an entity on the order of a new Resolution Trust Corporation. Such an agency could become a buyer at a fair and transparent price for distressed debt, as well as the workout home for institutions like AIG that failed because of accounting rules and bad subprime debt but retain great underlying value.

 

The details are crucial to making this work right -- to avoid political meddling, for example, and to make sure it has an end date. But until home prices stabilize, it may be the only way to stop the panic and serial nationalizations.

 

We're told Treasury has a proposal ready to send to Congress, but that the Members have told Mr. Paulson they don't want to see it until after Election Day. Mr. Paulson fears that if he does call for action and Congress refuses, then the contagion would be even worse. Well, how much worse can it get than a failure or two a week of a major financial institution? The sooner a resolution agency is up and running, the fewer banks will fail and the lower the ultimate cost to the taxpayer.

 

Mr. Paulson ought to tell Congress that this authority is essential to stopping a panic, and that the need is urgent. If Harry Reid and Nancy Pelosi say they can't do it until December or later, then they can take responsibility for the nationalizations to come.

 

http://online.wsj.com/article/SB122169466799949977.html

 

That giant sucking sound we are all hearing is our financial system being consumed by a giant cosmic black hole created by the vacuum of leadership.

[erynthered]

Three major national institutions (LEH, MER, AIG) have folded over the last 4 days and no longer exist. Many others are in real trouble. Where is the politcial leadership?

 

Patterson got out in front of AIG and played an instrumental role in helping to save the system. But AIG was an insuance company, which is State regulated.

 

Where has the President of the United States been? I haven't heard from him. He's maintaining radio silence throughout this whole crisis.

 

His administration is pursuing a reactive, ad-hoc strategy in stead of getting in front of the problem, via RTC II.

 

And Congress? From todays WSJ, a solution I've advocated since March...

 

 

 

http://online.wsj.com/article/SB122169466799949977.html

 

That giant sucking sound we are all hearing is our financial system being consumed by a giant cosmic black hole created by the vacuum of leadership.

 

 

What would you suggest the President do?

[bills_fan]

What would you suggest the President do?

 

 

The decision to put members of Congress on the spot to authorize the creation of RTC II is not one that Paulson can undertake. Let the President come on TV, call for Congress to create RTC II and send over Paulson's plan. Then apply pressure daily to Congress to move on it. Take whatever heat you have to and provide Congressmen of both parties political cover to pass it and get it done. In the meantime, let the markets know exactly what is going on so that irrational fear amd panic do not permeate the system, such as yesterday.

 

That would constitute leadership to get us out of this crisis.

[erynthered]

The decision to put members of Congress on the spot to authorize the creation of RTC II is not one that Paulson can undertake. Let the President come on TV, call for Congress to create RTC II and send over Paulson's plan. Then apply pressure daily to Congress to move on it. Take whatever heat you have to and provide Congressmen of both parties political cover to pass it and get it done. In the meantime, let the markets know exactly what is going on so that irrational fear amd panic do not permeate the system, such as yesterday.

 

That would constitute leadership to get us out of this crisis.

 

Thanks for your answer. I may chime in later. I'd like to read some more responses.

Again thanks for all the input you've brought to this board on whats been going on.

[PastaJoe]

The Republicans don't want Bush acting presidential and going on national television explaining to the nation what has happened and what's being done about it. It would remind everyone who's been in charge during all this, and that it would be more of the same if McCain was president, since he was such an advocate for deregulation (before this week of course, when he had an epiphany).

 

Have you noticed you don't hear Repubs pushing for private accounts for Social Security lately? Imagine the uproar among the AARP crowd if that was in effect now. Dems would be well served to remind voters of that great idea.

[molson_golden2002]

The Republicans don't want Bush acting presidential and going on national television explaining to the nation what has happened and what's being done about it. It would remind everyone who's been in charge during all this, and that it would be more of the same if McCain was president, since he was such an advocate for deregulation (before this week of course, when he had an epiphany).

 

Have you noticed you don't hear Repubs pushing for private accounts for Social Security lately? Imagine the uproar among the AARP crowd if that was in effect now. Dems would be well served to remind voters of that great idea.

Obama should be reminding the voters about that

[StupidNation]

Have you noticed you don't hear Repubs pushing for private accounts for Social Security lately? Imagine the uproar among the AARP crowd if that was in effect now. Dems would be well served to remind voters of that great idea.

 

It actually is a good idea. Last time I checked social security is going bust and we have 2 choices: 1st privatize our money and let us screw it up 2nd give it the gov't and know it will be screwed up

 

I'll take liberty, you'll take enslavement to the system.

[finknottle]

Have you noticed you don't hear Repubs pushing for private accounts for Social Security lately? Imagine the uproar among the AARP crowd if that was in effect now. Dems would be well served to remind voters of that great idea.

 

My stock portfolio is down 25%. As far as I am concerned, my social security is effectively 0 - they just have not admitted it yet.

 

BTW, Obama's plan for increasing the ceiling on Social Security contributions will help the budget short-term but worsen and slightly advance the insolvancy of social security itself - more money in, more money+interest out.

[PastaJoe]

It actually is a good idea. Last time I checked social security is going bust and we have 2 choices: 1st privatize our money and let us screw it up 2nd give it the gov't and know it will be screwed up

 

I'll take liberty, you'll take enslavement to the system.

 

Or a bipartisan committee could be formed to come to a compromise on how to resolve it, as has been done in the past. Like I said, if private accounts are such a great idea, why isn't McCain making it a campaign issue when everyone is focused on the market? Seems like a great time to push such a great idea.

[erynthered]

The decision to put members of Congress on the spot to authorize the creation of RTC II is not one that Paulson can undertake. Let the President come on TV, call for Congress to create RTC II and send over Paulson's plan. Then apply pressure daily to Congress to move on it. Take whatever heat you have to and provide Congressmen of both parties political cover to pass it and get it done. In the meantime, let the markets know exactly what is going on so that irrational fear amd panic do not permeate the system, such as yesterday.

 

That would constitute leadership to get us out of this crisis.

 

 

Whats your thoughts on this?

 

http://theheritagefoundry.org/2008/09/17/f...r-liberal-myth/

[bills_fan]

Whats your thoughts on this?

 

http://theheritagefoundry.org/2008/09/17/f...r-liberal-myth/

 

 

Funny you should ask...

 

This Articlein today's WSJ sums up my attitude toward "deregulation".

 

More regulation is not necessarily needed, better regulation almost assuredly is needed. An overhaul of the regulatory system is needed, there would be less overall regulation, numerically, but it would be more streamlined.

 

In the securities world, you have the SEC, FINRA and various other entities.

 

The commodities world has the CFTC.

 

The banking world is a true mess, the Fed, OTS, State Agencies, OCC etc. all have jurisdictions over various banks.

 

The insurance world is state regulated.

 

The accounting world has FASB.

 

The overlap is significant, as are the areas that they miss, such as derivatives and hedge funds. So, you have heavy, overburdensome regulation in certain areas and the wild west in others.

 

If you had one, single, Federal regulator for financial products and institutions, you would have a more efficient, streamlined and effective regulator. This model has proved effective in Britan with the Financial Services Authority, although they still split out banking.

[Chilly]

^^ - Sounds like what McCain is arguing

[bills_fan]

^^ - Sounds like what McCain is arguing

 

 

Neither candidate has a clue on these issues. If McCain did say that, I did not hear any specifics and someone probably dumped on him a talking point.

[Chilly]

Neither candidate has a clue on these issues. If McCain did say that, I did not hear any specifics and someone probably dumped on him a talking point.

 

Pretty much the feeling I got from the bit that I heard, too. I think one of McCain's economic advisors basically told him to stop talking about de-regulation, and start talking about (paraphrasing) 'reducing the multiple layers of the patchwork regulatory system in order to increase its effectiveness'

[/dev/null]

And Congress?

 

In the immortal words of great early 21st century philosopher Eric Cartman...Screw you guys, I'm going home

 

http://www.bloomberg.com/apps/news?pid=was...id=aVPBaUbYV_qQ

[YellowLinesandArmadillos]

It actually is a good idea. Last time I checked social security is going bust and we have 2 choices: 1st privatize our money and let us screw it up 2nd give it the gov't and know it will be screwed up

 

I'll take liberty, you'll take enslavement to the system.

 

Yeh right, might as well give it away then. Draw it out till there is no money left, at least some people will get back what they paid into it. You privatize it now and you can kiss it goodbye. Plus it is still being used as a budget offset to distort things making them seem better than they actually are.

[YellowLinesandArmadillos]

Funny you should ask...

 

This Articlein today's WSJ sums up my attitude toward "deregulation".

 

More regulation is not necessarily needed, better regulation almost assuredly is needed. An overhaul of the regulatory system is needed, there would be less overall regulation, numerically, but it would be more streamlined.

 

In the securities world, you have the SEC, FINRA and various other entities.

 

The commodities world has the CFTC.

 

The banking world is a true mess, the Fed, OTS, State Agencies, OCC etc. all have jurisdictions over various banks.

 

The insurance world is state regulated.

 

The accounting world has FASB.

 

The overlap is significant, as are the areas that they miss, such as derivatives and hedge funds. So, you have heavy, overburdensome regulation in certain areas and the wild west in others.

 

If you had one, single, Federal regulator for financial products and institutions, you would have a more efficient, streamlined and effective regulator. This model has proved effective in Britan with the Financial Services Authority, although they still split out banking.

Nice thought, not sure how that would play out good or bad, definitely more streamlined... will never happen, too many folks have stakes in their fiefdoms to ever allow this to happen, especially the states. They have fought tooth and nail to preserve their authority over insurance and state banks, though most have national charters now. Then there is the SEC and the CFTC not to mention the Treasury Department and the Commerce Department. Talk about a political cluster !@#$.

[erynthered]

Nice thought, not sure how that would play out good or bad, definitely more streamlined... will never happen, too many folks have stakes in their fiefdoms to ever allow this to happen, especially the states. They have fought tooth and nail to preserve their authority over insurance and state banks, though most have national charters now. Then there is the SEC and the CFTC not to mention the Treasury Department and the Commerce Department. Talk about a political cluster !@#$.

 

And reading this board at times makes me think all this started only a short eight years ago. How' bout that.

[DC Tom]

And reading this board at times makes me think all this started only a short eight years ago. How' bout that.

 

Yeah, everyone knows it started when Hillary Clinton had Ron Brown assassinated.

[East Brady]

Leadership, well lets see, johnny mac wants chrissy cox fired(sec), Jim Bunning has introd legislation to strip the Fed of its bailout power and nancy girl said don't blame us here in congress. Sounds like business as usual from the d's and r's. Oh and the fed printed 40 billion yesterday causing a flight into gold. Reality TV at its finest.