James Pethokoukis

Passing financial reform is no miracle

April 22, 2010

Jonathan Chait over at TNR is strangely amazed that financial reform may happen:

What’s happening with financial reform right now is unlike anything that’s happened since I’ve been following American politics. Look at the fundamentals of the issue. This is a matter where a massive industry — one that accounts for close to half of all corporate profits — is adamantly opposed to new regulation. The merits of the issue are so mind-numbingly complex that even economists and policy wonks sound distinctly fuzzy on the details. Throw in a Republican Party that had pursued, with evident political success, a policy of total obstruction. I’d tell you this was a formula either for defeat or a toothless reform.

The latest on Obama and the VAT

April 22, 2010

OK, here is what President Obama said on CNBC to reporter John Harwood about a value-added tax:

Growth is the key to US fiscal recovery

April 21, 2010

The Obama deficit commission has its first meeting next week. And when the panel  finally releases its report after the election, I am sure it will contain an unsurprising mix of tax increases and spending  cuts as a way of dealing with the deficit. But a new report from the  wealth management group at UBS  looking at public sector debt dismissed that policy prescription:

Liberals hit Senate financial reform bill

April 20, 2010

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.

Why we shouldn’t break up the big banks

April 20, 2010

Tyler Cowen gives it his best shot and ends with this recommendation:

If you do wish to break or limit the power of the major banks, running a balanced budget is probably the most important step we could take. It would mean that our government no longer needs to worry so much about financing its activities. Of course such an outcome is distant these days, mostly because American voters love both high government spending and relatively low taxes.

3 TBTF loopholes in the Dodd bill

April 20, 2010

The wonderful Nicole Gelinas explains why she does not think the Dodd bill ends TBTF (as outlined by me):

Faith-based financial reform

April 19, 2010

The timing of the Securities and Exchange Commission’s suit against Goldman Sachs may sway a few doubters. But U.S. financial reform is still partly a matter of faith. That’s one reason for the partisan bickering. Preventing future government bank bailouts relies heavily on Wall Street believing new rules will be enforced and failures will be allowed. For skeptics, though, the current Senate bill leaves enough wiggle room to induce doubt.

U.S. financial reform is still a matter of faith

April 19, 2010

The timing of the Securities and Exchange Commission’s suit against Goldman Sachs may sway a few doubters. But U.S. financial reform is still a matter of faith. That’s one reason for the partisan bickering. Preventing future government bank bailouts relies heavily on Wall Street believing new rules will be enforced and failures will be allowed.

Team Obama already running the numbers on a VAT

April 19, 2010

Talk about burying the lede. This from the NYTimes and my pal John Harwood:

One way to reach that 3 percent [deficit-to-GDP] goal, by the calculations of Mr. Obama’s economic team: a 5 percent value-added tax, which would generate enough revenue to simultaneously permit the reduction in corporate tax rates Republicans favor.

SEC tries to ride Goldman back to credibility

April 16, 2010

Can the Securities and Exchange Commission ride Goldman Sachs back to credibility? Perhaps, but it will take more than one high-profile lawsuit to restore the reputation of America’s top financial cop. L’Affaire Madoff was pretty close to a brand killer. But the move is powerful evidence — and warning — that the agency is out of the doughnut shop and back on the beat.