Liberals hit Senate financial reform bill
As HuffPo puts it:
A coalition of former regulators, left-leaning economists and Democratic insiders have slammed the Senate’s version of regulatory reform in a letter to the parties’ two leaders, warning that the current bill won’t prevent a future financial crisis.
One of the signers is liberal think-tank economist Dean Baker. I e-mailed him and asked about the letter’s claim that the Dodd reform bill does not “eliminate a perpetual system of government sponsored corporate bailouts financed by the government or private industry.”
His speedy response:
To my view, the biggest failing is that it does not end TBTF banks. As a practical matter, I really doubt that any regulator is going to stand up to Goldman, Citi or any of the other big banks and tell them they can’t do something that is making them lots of money, but poses serious risks to the system. It would have helped if we had fired Bernanke, so that regulators understood that there was downside risk from failing to do their job and crack down on the big banks when necessary. But if Bernanke can get reappointed, even after allowing the worst economic disaster in 70 years, there is little hope that future regulators will take large personal risks to confront major banks when there is no downside to ignoring their practices.