Monday, September 14, 2009

Obama's Speech on Wall Street

mostly silence from Wall Street but that I guess was to be expected since the giants don't want their free ride to come to an end. Mr. Obama said what needed to be said. Companies should not have the opportunity to shop for the agency that would regulate them. Compensation packages should be redesigned so that long-term (as opposed to short-term) gains are rewarded. Gaps in regulation must be filled in and a resolution authority implemented to force an insolvent company's stock brokers and lenders to pay for its obligations.

The president could eliminate the companies' regulation shopping by merging the respective agencies into one. But oversight is only one part of problem. This systematic failure can't be solved unless compensation packages are redesigned so that salaries and bonuses are taken as freely as they are given. And these companies that "are too big to fail" should be broken up so that they could never put us through a crisis as monumental as the one we've been through ever again.

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