Monday, March 31, 2008

Paulson's bogus plan to regulate the markets

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Wall Street's appraisal of Treasury Secretary Hank Paulson's much-ballyhooed plan for overhauling the United States financial regulatory structure? If we accept the movement of stock market indexes as evidence, the reaction was a mild shrug. The Dow Jones Industrial Average rose 46 points.

Given the huge play that the Wall Street Journal and the New York Times are lavishing on Paulson's plan, you'd think the mood would be a little more tense. After years of looking the other way, the sheriff is supposed back on the beat, promising to comprehensively change how the government oversees financial markets. Yay! No more distressing repeats of the embarrassing market turmoil that has plagued the global financial system since last August. The party's over, boys. We'll have no more of that get-rich-quick flimflam that you love so much.

Well, actually, no. My guess is that the main reason Wall Street isn't alarmed is that it knows quite well it has nothing to fear from Paulson's plan to, as Paul Krugman wrote in his column Monday, comprehensively rejigger the "org chart" for the federal government's regulatory apparatus. And as proof of that, you need look no further than the section of the executive summary of the 212-page "Blueprint for a Modernized Regulatory Structure" that is devoted to a consideration of "Futures and Securities."


Clinton criticizes proposed Fed overhaul

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HARRISBURG, Pa. - Democrat Hillary Rodham Clinton on Monday criticized the Bush administration's plan to overhaul regulation of U.S. financial institutions, saying the proposal "comes late and falls short."

The New York senator said the government must move more assertively to contain the mortgage and credit crisis rattling financial markets, especially in finding ways to ease soaring rates of home foreclosures.

"No amount of rearranging the deck chairs can hide the fact that our housing and credit markets are in crisis, and they're sinking deeper every day," Clinton said at a campaign appearance. "Every day we fail to take aggressive action is a day lost."


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