Fixing the Financial System is not what the current Administration is about. Making new Regulations of the same people doing the same thing they did before is the President's own definition of insanity: Trying the same thing over and over, and expecting a different result.
Credit Rating Companies for example failed miserably to evaluate the credit of Munis (Municipal Bonds), of Bond Insurance Companies, and other things. Yet, the right fix is not on, yet: The House Financial Services Committee and the Obama Administration are pushing legislation that would have the purpose of better regulating the Credit Raters. However, the legislation would avoid addressing the central Fiduciary conflict that Credit Rating Companies had and still have: They are paid by the people whose credit they rate. Until that is changed, everything may be changing, but nothing is new, to quote an old saying. On the pending legislation, its avowed purposes, and its drawbacks, see Joe Nocera, "Talking Business/CliffsNotes of Columns to Come" p. B1, col. 1 (New York Times Nat'l ed., "Business Day" Section, Saturday, October 31, 2009).
Similarly, the Obama Administration and particularly Treasury Secretary Timothy Geithner are pushing other legislation also designed to keep the old financial system intact. They want to have the same people who failed to stop the Great Meltdown hold down new regulating jobs in a new government agency, to regulate the same people who ran amok with the financial system in the first place. See Stephen Labaton, "A Clash Over Regulation of Big Firms" p.B1, col. 5 (New York Times Nat'l ed., "Business Day" Section, Friday, October 30, 2009), published online under this different headline: "F.D.I.C. Chief Criticizes Reform Plan".
Fiduciary Duties require more than just tinkering at the edges, as they say. The American people are the ones owed those Fiduciary Duties, not the temporary occupants of the Federal Government and certainly not the wealthy people who already failed. It is a good time to fix the problem, not just invent new regulations and expect them to be enforced by the same people who failed at enforcing the old ones.
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