Financial Regulation — A Blueprint for Political Coercion

Posted on April 21, 2010

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by Dick Morris and Eileen McGann

 

How odd that when the president’s largest corporate donor, Goldman Sachs, gets indicted, it is seen in the wonderful world of Washington as catalyzing his efforts to modify Wall Street regulation. Goldman’s employees, of course, gave Barack Obama just shy of $1 million, a total only exceeded by the faculty and staff at the University of California, making them the second-largest bundle of donors to the Obama campaign.

There are so many reasons to oppose Obama’s financial regulation bill.

Some Republicans have focused on the fact that it sets up a TARP II fund that starts the bidding at $50 billion. In making such an offer to back up firms that are too big to fail, the bill guarantees:

The big firms will feel free to make whatever risky bets they can get away with since their downside (i.e., backside) is covered.

The bigger firms eclipse the smaller ones (as Fannie Mae and Freddie Mac did to the mortgage industry) because of their implicit federal guarantee.

More firms crowd to get under the $50 billion umbrella, and it expands into an even-larger bailout.

MORE…..townhall.com/

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