Political Spectrum — A View from the Left: Does the financial industry need more government regulation?0
May 23, 2012 by Richard Drake
Does the financial industry need more government regulation?
Government regulation. The horror of the ages. Urban legend tells us that regulations kill the life blood of American creativity, that “job creators” across this great nation of ours would be hiring workers by the bushel if weren’t for those regulations, which govern everything from workplace safety to environmental protections.
And nowhere, the legend goes, does the hand of regulation have a more strangling effect than on our financial industry. And one of the most vicious pieces of legislation, the one that has kept the best and brightest helping to left our economy from the recession we now find ourselves in.
When we talk about legislation of late, we talk of two things: J.P. Morgan and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The fact that J.P. Morgan lost so much of its investors’ money might seem to play up the urgency for bills such as Dodd-Frank, yet for Republican presidential candidate Mitt Romney, the J.P. Morgan crisis matters – pardon the pun, but I can’t help myself – not a whit.
In fact, as he pointed out on a news show this week, somebody made money off the debacle, and that is sort of the American way, after all. Cue, “Heh heh,” the patented Romney giggle. And he is far from alone in his belief.
It’s okay, though. JP Morgan’s chief executive Jamie Dimon said last week, “Just because we’re stupid doesn’t mean everybody else was.”
Dodd-Frank, the boogie man (much like the Death Tax) created by the right, withers on the vine today, essentially gutted by Congress. And yet, to one would think that jack-booted bespectacled storm-troopers were terrorizing innocent bankers in the middle of the night across the country, trampling their rights and creating a Bill of Rights Kristallnacht.
The handmaidens of the financial classes – those who support them both politically and in in journalism – are attempting to use Jedi mind tricks on the American people, trying to convince them that that the hullabaloo over financial indiscretions is a passing fad, and that we should pay attention to something more important, like Jeremiah Wright, perhaps? But poll after poll indicates that the American people, like a slumbering giant finally woken from hibernation, doesn’t trust banks, or those who run them, and is disgusted by the cavalier attitude they have towards other people’s money. Their money. J.P. Morgan, whose president adamantly resists the idea of more regulation, is considered one of the shrewdest investment firms in America. For those who still might cling to the fairy-tale view that what happened with J.P. Morgan was an anomaly, and that the lessons of the past really have been learned by the financial gurus on Wall Street, we might consider these words by Heidi Moore of Marketplace:
On Wall Street there’s a saying: There’s never just one cockroach in the kitchen. So if JP Morgan —the alleged smartest guys in the room—could take a bet this big, this stupid, and lose it then what are other banks also up to? It shows us that we’ve learned nothing and that the mindset of Wall Street hasn’t changed, that risk is out there and we’re not measuring it well.
What’s worse, of of course, is that we will only read about these things after they crash-and-burn. There will be little, if any, forewarning.
Sure, as Mitt Romney said, somebody will make a profit, and for some that will be all that counts. Too bad it isn’t the people who are supposed to be making the profit.