Friday, April 23, 2010

Reporter's Notebook

Paul Leonard can be reached at pleonard@vbjusa.com

Financial reform now


Yesterday, I received an email from the company that supplies my auto insurance, urging me to call my senators to oppose the implementation of the so-called Volcker Rule, named for former U.S. Federal Reserve Chairman Paul Volcker and which would limit the most-egregious speculative dealings of certain financial institutions.

Instead, I plan to do the opposite. I urge our readers to call their representatives in support of the full financial reform bill now being considered by the U.S. Senate.

While some readers may disagree, the reasons for making this call are not political. Instead, this column in support of financial reform is simply an acknowledgment of the events of the recent past.

It may be easy to forget in a time of resurgent stock prices and improved investor confidence the lessons learned from the financial meltdown. Such is the nature of the cyclical free market system, full of its ups and downs.

But for Southwest Washington business owners and workers still struggling after losing the lion’s share of their investments, their vital lines of credit and in some cases, their membership in the American middle class, there is no forgetting the loss of hard-earned capital as a result of the unchecked speculative dealings of certain financial institutions.

The bailouts of 2007-8 changed everything. There is no turning back the clock to the heady days of the 1990s and 2000s, when American ingenuity was replaced by the cannibalization of wealth, with CEOs doling out millions in bonuses while their firms dived into the red.

Common sense reform of our financial system means an end to taxpayer-funded bailouts of institutions which took irresponsible bets on the markets and lost. It means an end to the practices laid-out in the recent federal indictment against Goldman Sachs, accused of profiting from market positions taken opposite of the interests of its own clients.

Currently, lobbyists representing Wall Street interests are pushing to delay debate on the bill, a bi-partisan effort nearly two years in the making.

So I urge you to call senators Patty Murray and Maria Cantwell – two likely supporters of the legislation – to tell them you support their efforts to reintroduce the ultimately-American virtue of “fair play” back into the U.S. financial system.

3 comments:

Bruce said...

I cannot believe that this legislation is becoming a Democratic versus Republican debate, just from the influence of Wall street. My email inbox is flooded with opposing views. Even though Wall Street may be extremely powerful, I'm sure that Republicans lost their fair share of money a couple years back, how quickly they forget. Or is it that the lobbyist are lining their pockets sufficiently to make them forget. This should be a bipartisan effort that benefits everyone with the exception of the overpaid executives of Wall Street. Tell your senators to not back down from the pressures of the Wall Street lobbyist.

Anonymous said...

The hen house was opened up to the wolves when banks were let into the securities business and wall street became banks. No oversight, plenty of loopholes and greed overshadowed common sense. Let's reel them back in and earn any changes that will likely be applied to the bill in years to come. Enough of the stupid stalling tactics of the right. If we waited for the perfect bill then nothing would be done, like health care. Bills are amended and added to all the time. Let's not stop real improvements for our countries future!

Jake Engle said...

Fee-only, Fiduciary independent financial advisers SUPPORT all of these reforms. (We aren't your commissioned insurance agent!)
Many older Americans (Republicans, actually) schooled me on the great period of prosperity in the USA in about 1940 - 1970.
That was brought about by common sense financial reform that came after a period of unfair and deceptive business practices. Hard to believe that FDIC insurance was once controversial. Our current rebound started the March 2009 day that the SEC banned naked short selling. Capitalist can be optimistic, as the new rules will lessen the chance of such a terrible downturn as we went through in 2008. No honest person has anything to fear from these new rules.