Posted on 05/01/2015 2:50:53 AM PDT by IBD editorial writer
China is trying to fix its banking system. Not by piling on more regulations in the name of protecting consumers and the financial markets. Instead, it's trying to inject more free-market competition into the system so as to improve its stability and efficiency.
(Excerpt) Read more at news.investors.com ...
Princes Fauxcahontas is ANOTHER IVY LEAGUE scumbag like ALL the rest.... oh so fing smart...so smart she had to lie to get into the ivy league school (just like scumbag obama) and is ANOTHER LIBTARD WHO THINKS CUBA and VENEZUELA are cutting edge social programs....
Obamacare has gutted the future of medicine and this ivory tower bozo wants to gut the FINANCIAL SYSTEM...
we dont need any more input from the LIBTARD LEFT...
Corporations pay 35-40% in taxes already.... the capitalist system is being stiffled already. It is CAPIAL that creates jobs.... it is GOVERNMENT that destroys them..
She only repeats what they tell her to say.
Ole Princess Lizawatha is more commie than the chi-coms.....go figure...
BUMP! You dead-on nailed it. YES!
Meanwhile, the Chicaps are apparently going about fixing their banking industry with Free Market changes
From the article: “”That means making smarter loans to companies and individuals — and accepting the consequences when they don’t work out.”
Elizabeth Warren can be criticized for many of her anti free market positions. However, it was George W. Bush and his Fed Chairman appointee Ben Bernanke whose low interest rate easy money policies resulted in the housing bubble that brought on the 2008 crash. In addition, it was Bush and his former Goldman Sachs CEO treasury secretary Hank Paulson who chose to bail out US and foreign banks (yes foreign banks) through fed money printing and taxpayer money (TARP) in the fall of 2008.
Bush and Paulson could have allowed the bankruptcy courts to reorganize the “too big to fail” banks. That would have meant the bondholders, shareholders, and management would have paid the price for making their banks insolvent instead of the taxpayer. Depositors would have been covered by their FDIC insurance, but much of that money would have been returned to the taxpayer over time from asset sales and fees during restructuring. The restructured banks, with new management, would have been much more conservatively run and our banking system would be much sounder today.
It isn’t hard to forget the same wealthy bankers, who came to Bush on their knees demanding the taxpayer cover their mismanagement, were paying themselves multimillion dollar bonuses again.
Bush and his Wall Street advisors were no more believers in the free market than Elizabeth Warren. Had Bush allowed the banks to restructure in bankruptcy, we’d have a much healthier banking system today. Instead the banks have gone back to playing their old speculative games by increasing derivative exposure far beyond 2008 levels.
The demise of the banking system can actually be traced back to 1999 when Republicans in Congress passed and Bill Clinton signed, under heavy lobbying by the Wall Street banking cartel, a deregulation bill that ended the great depression era Glass-Steagall bill that prevented investment banks from merging with commercial banks. That legislation was designed to prevent depositor money at commercial banks for being employed in risky speculative ventures. Once Glass-Steagall was repealed, investment banks quickly merged with commercial banks and invested depositor money in subprime loans, loans to poor risk foreign nations, and speculative instruments such as derivatives.
I don’t buy the conservative story the 2008 collapse occurred because Chris Dodd and Barney Frank forced them to make risky housing loans to people who couldn’t afford them. Bank of America voluntarily purchased Countrywide and Wachovia voluntarily purchased Golden Gate. They chose to enter the risky sub prime mortgage business through acquisition, no government agency or official forced them to do so. In addition, BB&T, Wells Fargo, and other banks did not require government bailouts but were forced to take them because the federal government didn’t want the people to know there were large healthy banks. Doing so would have challenged the assertion the entire banking system was at risk.
The 2008 collapse occurred because bankers voluntarily speculated with depositor money in the subprime mortgage market and in derivatives. Yes there was encouragement from government with respect to subprime but ultimately management makes the decision. Some banks chose to curry favor with leftists in Congress, others didn’t. Those who made bad decisions should be standing on the street corner today instead of enjoying multimillion dollar bonuses. We can thank George W. Bush, not Elizabeth Warren, for the current state of the banking system.
Lest we forget, our Republican Congress recently passed legislation extending taxpayer protection to derivatives trading. Five Wall Street banks, all of whom took billions of taxpayer money in 2008 (Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase and Morgan Stanley), are responsible for 95% of the derivatives trading conducted by US banks.
I don’t agree with many of Elizabeth Warren’s regulatory policies. I do agree with her Glass Steagall should be reinstated so the Wall Street speculators don’t have easy access to the bank deposits of small businesses and average citizens. I also agree with her the US government should not be providing insurance for risky derivatives trading. Somehow the “free market” editors at Investor’s Business Daily and the Wall Street Journal conveniently forget the banking subsidies and government guarantees.
There was a CNBC report out from 2009 that China in many ways had a much freeer economy than we did.....
All very true. However, you neglected to mention that only a hand full of Dems voted against this. if memory serves me right, it was on the order of 80-90% Dems voting for this as well as the commodities trading act of 20o0 which was the real culprit.
Yes there was heavy lobbying by Wall Street of BOTH parties on this issue. In fact, I believe Bill Clinton literally got tens of millions in speaking fees from the Wall Street community the year after he left the White House. (When, according to Hillary, they were broke)
It’s Luddite to blame Glass-Steagall repeal. Time marches on, it’s like the people that don’t want Walmarts in their town.
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