There are probably as many reactions to the Treasury Department’s ‘Blueprint for Financial Regulatory Reform’ as there are words in the massive proposal.
One thing, however, stands out. For all the verbiage there is almost nothing in the proposal that does anything to alleviate the current crisis in the credit and housing markets.
It’s like nailing a sign up to keep the chicken coop doors closed once the coyotes have been to visit and left nothing but a few scattered feathers on the ground.
Or, it’s like getting the menu for a grand banquet to be held next month when right now you are suffering from a massive case of indigestion after an hours-long meal and all you want is some immediate relief. Darling, don’t tell me we’re out of Pepto-Bismol.
I wouldn’t say it’s like rearranging the deck chairs on the Titanic (to give a nod to the granddaddy of descriptions for pointless behavior). But that’s only because the U.S. economy is not a ship. The rearranging of financial regulators that would occur under this proposal does a lot of shuffling but doesn’t go to the heart of what got us into the current mess.
Indeed, some of the proposals would make worse the effective lack of oversight that has wreaked havoc on the mortgage market and the balance sheets of some of the biggest names in the business.
Particularly troubling, I find, is a proposal to institute more of a principles-based regulatory scheme for Wall Street firms as opposed to the type of oversight they get now from the Securities and Exchange Commission that tells them what they can and can’t do (at least in theory, although one can’t be sure in the aftermath of this latest burst bubble).