Monday, March 31, 2008

Put That Deck Chair Over There

As former labor secretary Robert Reich points out, the market reforms announced by Federal Reserve Chairman Ben Bernake are largely "sound and fury, signifying nothing."

They're long on consolidation, but they're very short on regulation. For example the Fed can't even require Investment banks to open their books to regulatory inspection unless they are in serious trouble. When it comes time to bail them out they'll disclose the problem, but they won't have the fed nosing around in their business when they're busy creating the problem in the first place.

Consolidation may do some good, but I doubt it. Let's put it this way: creating the homeland security out of 30 different agencies is hardly a model of success for emulation.

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