Republicans must have their head spinning after expressing outrage that Obama's bank plan shows he is in bed with wall street, expect the Republicans to hit the media with their Obama is a socialist talking points, as well as pointing to any drops in the DOW, as evidence that Obama is killing wall street.
I actually think it is very smart of Obama to announce his banking rescue plan on Monday, then his proposed regulatory overhaul on Tuesday, because Republicans will not be able to settle on a single talking point regarding whether Obama is in bed with Wall Street or trying to socialize Wall Street. Perhaps President Obama needs to make it a little easier for Republicans to brand him as a socialist who is out to nationalize all forms of private property or as a sell-out who is beholden to large commercial banks.
Nonetheless, expect Krugman on Co. to say its not enough while the CNBC types start blaming him for the recession again. Tomorrow should be a lot of fun.
:popcorn:
http://www.msnbc.msn.com/id/29887343//snip
Treasury Secretary Timothy F. Geithner plans to propose today a sweeping expansion of federal authority over the financial system, breaking from an era in which the government stood back from financial markets and allowed participants to decide how much risk to take in the pursuit of profit.
The Obama administration's plan, described by several sources, would extend federal regulation for the first time to all trading in financial derivatives and to companies including large hedge funds and major insurers such as American International Group. The administration also will seek to impose uniform standards on all large financial firms, including banks, an unprecedented step that would place significant limits on the scope and risk of their activities.
* * *
Geithner plans to make the case for the regulatory reform agenda in testimony before Congress this morning, and he is expected to introduce proposals to regulate the largest financial firms. In coming months, the administration plans to detail its strategy in three other areas: protecting consumers, eliminating flaws in existing regulations and enhancing international coordination.
The testimony will not call for any existing federal agencies to be eliminated or combined, according to the sources, who spoke on condition of anonymity. The plan focuses on setting standards first, leaving for later any reshaping of the government's administrative structure.
The nation's financial regulations are largely an accumulation of responses to financial crises. Federal bank regulation was a product of the Civil War. The Federal Reserve was created early in the 20th century to mitigate a long series of monetary crises. The Great Depression delivered deposit insurance and a federally-sponsored mortgage market. In the midst of a modern economic upheaval, the Obama administration is pitching the most significant regulatory expansion since that time.
An administration official said the goal is to set new rules of the road to restore faith in the financial system. In essence, the plan is a rebuke to raw capitalism and a reassertion that regulation is critical to the healthy function of financial markets and the steady flow of money to borrowers.
The government also plans to push companies to pay employees based on their long-term performance, curtailing big paydays for short-term victories. Long-simmering anger about Wall Street pay practices erupted last week when the administration disclosed that AIG had paid $165 million in bonuses to employees of its most troubled division, despite losing so much money that the government stepped in with more than $170 billion in emergency aid.
/snip
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