Dow Average to Congress: Your Reform Bill is a Joke
Yesterday, Larry Summers weighed in on the financial regulation bill before the Senate:
“If you vote for cloture right now and don’t add any more amendments, we will have solved the issues that led to crisis. Had this been law, as is, in 2007, we would not have had the crisis.”
Bill Clinton recently blamed Summers and Robert Rubin for giving him bad advice on derivatives. Summers’ response was basically “who could’ve predicted?”
Current efforts to reform financial regulation are “cosmetic” and won’t prevent another crisis, economist Nouriel Roubini told an audience on Tuesday at the London School of Economics.
“We need more radical reforms,” he added. “The idea that we’ll be able to close down an institution like Goldman ( Sachs) in an orderly way—a business that operates in nearly a hundred countries—is absurd.”
The market has dropped over 400 points in the past two days, and it’s been down 9 out of the past 12 days. While there are certainly a lot of factors influencing the situation, the market’s volatility sends a clear message that the reform bill is inadequate to restoring confidence in their wake. (Capital requirements? Pshaw.)
In other words, fraud is a bad market structure. Who could’ve predicted? Well, certainly not Larry Summers, who has built a career on being authoritatively and consistently wrong in ways that always manage to enrich the Wall Street oligarchs.