This may be the best rationale I’ve seen the MSM use when mentioning the Volcker rule:
“The Senate is considering writing into law what Mr. Obama calls “the Volcker rule,” which would effectively bar banks from the risky and often lucrative practice of trading for their own accounts. The Volcker rule is aimed at undoing a side-effect of the bailouts of 2008 and 2009: An assumption that government will always rescue big financial institutions, and thus make it easier for them to borrow heavily to make risky bets.”
I keep hearing people complain that the Volcker rule would not have prevented the crisis. The Volcker Rule is aimed at the side effects of the rescue, not prevention. Indeed, in the post crisis, post-bailout era, we must strive not only to prevent the next set of taxpayer funded bailouts — but to minimize the negative repercussions of the last rescue.
Typical of ignoring the impact of the rescue is the fin services mega lobbyist, the Financial Services Forum. Consider what their spokesbitch, Rob Nichols, recently bleated:
“Trading—proprietary or otherwise—didn’t lead to the recent crisis. Let’s focus on correcting the major deficiencies in our current supervisory framework first.”
That is an example of a false dichotomy — there is nothing that prevents a society from a) attacking the cause of problem and b) cleaning up the side effects of the prior rescue.
Of course, that is not how bloodsucking lobbyists and preservers of the status quo see it — they simply don’t want anything to change. Financial Services Forums’ Nichols wants the Fed to be in charge of regulating the largest banks. Based on 1) his approval of the Fed’s performance this past crisis; and 2) His prior job as Assistant Secretary of the Treasury under President George W. Bush — he is obviously a huge fan of incompetence.
Nichols continues to defend Too Big to Fail, supports taxpayer funded speculation, and wants to insure the mega banks are free from regulation.
In his stint in the last administration, Nichols helped contribute to the crisis; As a lobbyist, he is hellbent on making sure future administrations have another crisis.
Heckuva job, Nichols.
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Source:
New Life for ‘the Volcker Rule’
BOB DAVIS
May 1, 2010
http://online.wsj.com/article/SB10001424052748704093204575215920817484134.html
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