Asides

Obama to Paulson: My Two Cents

By The Prince ⋅ March 30, 2008 ⋅  Email This Post ⋅  Print This Post ⋅ Post a comment

From the WSJ Washington Wire Blog today: 

Sen. Barack Obama described the Bush administration’s sweeping changes to financial market regulation as “inadequate” on Saturday.

While noting that he had not yet seen the full proposal, which Treasury Secretary Henry Paulson will unveil on Monday, the Illinois senator said that, based upon news reports, he believed the proposed regulatory reforms didn’t go far enough, though he lauded the proposed consolidation of regulatory agencies.

Obama laid out his own proposals to boost regulation of the financial industry during a speech in lower Manhattan earlier this week. Speaking to reporters in Johnstown, Pa., on Saturday, he criticized the lack of any increased capital reserve requirements for investment banks, which can now use the discount window from the Federal Reserve.

“If I’m a commercial bank right now, I’m still not clear why it is that investment banks… are able to do things I can’t do, aren’t subject to the same capital requirements and liquidity requirements that I am and yet they’ve got the same fallback with the Fed as we do,” he said.

The Prince’s Commentary: Does Mssr. Obama wish to regulate the financial industry like the electricity industry because that has been a "huge success"?  Or would he like to just have the president be commander and chief/CEO of all U.S. based investment bank.  The truth is The Fed and the Treasury are already way outside their regulatory authority and this is going to the courts.  The Prince will guarantee it.  Take a look at the executive summary.  Even if congress grants this regulatory authority to the Fed you could still challenge this as an unlawful delegation by the President and Congress of regulatory authority.  See this Supreme Court case that was decided in emergency times of the Great Depression not unlike our own when it comes to the Mortgage Crisis/State of Economy. Home Building & Loan Association vs. Blaisdell.