Only a Hint of Roosevelt in Financial Overhaul - Joe Nocera

Only a Hint of Roosevelt in Financial Overhaul

By JOE NOCERA

Three quarters of a century ago, President Franklin Roosevelt earned the undying enmity of Wall Street when he used his enormous popularity to push through a series of radical regulatory reforms that completely changed the norms of the financial industry.

Wall Street hated the reforms, of course, but Roosevelt didn’t care. Wall Street and the financial industry had engaged in practices they shouldn’t have, and had helped lead the country into the Great Depression. Those practices had to be stopped. To the president, that’s all that mattered.

On Wednesday, President Obama unveiled what he described as “a sweeping overhaul of the financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression.”

In terms of the sheer number of proposals, outlined in an 88-page document the administration released on Tuesday, that is undoubtedly true. But in terms of the scope and breadth of the Obama plan — and more important, in terms of its overall effect on Wall Street’s modus operandi — it’s not even close to what Roosevelt accomplished during the Great Depression.


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http://www.nytimes.com/2009/06/18/business/18nocera.html?_r=1&pagewanted=print

Congress has turf battles, but I think he will keep tinkering should it require it.

Knee Jerks are exhausting me!

decision-making. Expanding the legal use of collective bargaining, individualizing relief, etc.

So far, Obama has reinforced existing power structures. And that might be the correct thing to do now, but don't call it a new New Deal.

FDR: Different times call for different solutions.
ER: Yes, dear.

Joe Nocera says Barack Obama is no Roosevelt. In the opening paragraph of a scathing critique of the president's proposals for regulatory reform, the New York Times columnist declares that "Roosevelt earned the undying enmity of Wall Street" for his New Deal rules that squeezed all the fun and games out of American capitalism as it had been previously practiced. And in his last paragraph, Nocera warns that "if Mr. Obama hopes to create a regulatory environment that stands for another six decades ... he is going to have make some bankers mad."

Wall Street may not be ready to dub Obama "that man II," but they sure aren't dancing in the aisles at the prospect of new regulation. Quite the opposite, they seem positively glum.

more...

http://www.salon.com/tech/htww/?last_story=/tech/htww/2009/06/18/the_wall_street_pout/

Obama's window for making substantive change is rapidly closing. First, there is the issue with the financial sector. When they were on the ropes, coming to the government with hat-in-hand, there was the real opening for placing them under much, much tighter rules. Now, however -- fattened with taxpayer bailouts -- there is less and less probability that these institutions will be brought to heel.

Second, there is the health care debate currently taking place. By effectively removing single-payer from the table, Obama has narrowed the possibilities of reform. I predict that if something does get passed here, it will be a complete boondoggle of a plan that keeps the insurance giants fat and happy while ballooning the deficit in the process.

What is the reason for this? Is it because Obama never really believed anything he said? Is it because he has almost completely surrounded himself with people so wedded to business-as-usual that such a view of the world has become "the air he breathes"? Is it his need to act as conciliator between feuding groups that prohibits him from taking unilateral action out of fear of pissing people off? I really don't know. All I know is that he'd better shift course relatively soon, or he will become completely controlled by the numerous crises around him, much to his political detriment.