Obama’s financial reform joke

By Alex Perry

President Barack Obama continues to do everything but focus on getting America’s economy turned around. Nothing has changed since he got his health care mess passed, and next on Obama’s to-do list is not the economy – it is financial regulatory reform.

Here we go again. Much like the campaigns for the stimulus package and the health care bill, Obama has warned everyone that financial regulatory reform is an urgent matter.

“We cannot delay action any longer,” Obama said this past weekend.

Why is financial regulatory reform a more important issue to address than the economy? Well, according to Obama, Wall Street is almost entirely to blame for the whole economic mess. The two are apparently directly related. On April 17, Obama said the following, “There were many causes of the turmoil that ripped through our economy over the past two years. But above all, this crisis was caused by failures in the financial industry.”

The President is not fooling anyone when he tries to simply blame the cause of the financial crisis on some ludicrous circumstance where a few greedy rich people on Wall Street decided to destroy America’s economy.

Obama makes it seem like there was not already enough regulation in place in this country to stop the crisis from occurring at the time. The financial regulation problem is not that there are no financial regulations – it is that the people in charge of doing the regulating are corrupt. The government officials who were in charge of this regulation at the time of the crisis were either too dumb to handle their positions or they were simply being bribed not to do their jobs correctly. There is no other explanation for financial regulators such as Barney Frank saying the following back in 2003 prior to the fallout, “These two entities – Fannie Mae and Freddie Mac – are not facing any kind of financial crisis … The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Why did Barney Frank say that? Well at the time, it was actually the evil Bush administration that saw the problems that could potentially arise if there wasn’t an increase in the supervision of Fannie Mae and Freddie Mac. Bush proposed a plan to counter that problem. Cue Barney Frank – who had been receiving campaign contributions from both firms – who came to their defense with the aforementioned quote.

Regardless, the real issue Americans have with the firms that were bailed out is that those firms were bailed out. They got themselves into financial trouble and yet it was taxpayer money that got them out of trouble. This is frustrating to most because when working Americans get into financial, trouble the government doesn’t bail them out.

That’s where the anger stems from. It is that simple.

Yet, Obama does not seem to realize that this is the true issue. He thinks everyone will be thrilled if there is simply more strict financial regulation. So what does Obama propose? Even after seeing how the government regulators have already failed to do their jobs effectively in recent years, he still proposes more government oversight as the solution. Government oversight is already what failed us. This is the equivalent of Mike Tyson giving his financial advisers from the 90’s a raise. You don’t reward failure. Government oversight is a corrupt business, and expanding it will not solve any problems – it will just lead to more corruption.

Instead of expanding oversight, he should simply be making sure the people in charge of these positions are doing their jobs. Our government is the group that requires the most oversight.

What financial regulatory reform really should be about is making sure that there is never a situation where government would need to step in and bail anyone out again. That is what the focus of reform should be, but it clearly is not the goal. Not only is it not the goal, the proposal Democrats have made would encourage just the opposite. In their proposal, they want to set up a $50 billion dollar fund which would be available in case a firm is ever in need of a bailout from the government. Even though this money would be supplied by the financial firms and not the government, it still incentivizes bad behavior.

How does that solve any of our bailout problems? To me, all that does is create an open invitation for all of these firms to maintain reckless decision making because they know that if they were to fail, they have $50 billion to fall back on.

Even if this portion of the proposal is removed from the final bill that is voted on, just the fact that it was ever involved in the first place shows how out of touch Democrats are with Americans on this issue. It shows their true intentions.

The real reason I believe Obama is pressing this issue is not because it will turn the economy around – obviously it will not. He is doing it because he thinks that if Republicans disagree with him on this issue they will look bad before the elections coming up in the fall. He wants to paint the picture that Republicans are siding with greedy corporate fat cats by opposing regulatory reform – even if it is a terrible attempt at solving a problem – while Democrats can all say they are cracking down on greed and corruption in this country.

I can see the campaign slogans already – Republicans are with Wall Street and Democrats are with Main Street.

Much like with health care, it all just comes back to the same old political games for Obama and his liberal comrades. Politics first and Americans last.

You voted for change. You got it.

Alex Perry is a Collegian columnist. He can be reached at [email protected]