And Goolsbee. Gee, a Chicago School nutcase on regulatory reform? What could go wrong?

The CFPA will be a minor improvement but most of what it looks to do will be advisory.

There is simply no there there in Obama’s reform proposals. There is next to nothing to like about them. They rate an F, a really, really low F.

Citizens United is a SCOTUS case involving a challenge to provisions of McCain Feingold which would govern advertising concerning a candidate standing for election within 60 days of the election. SCOTUS asked for supplemental argument last spring, and heard it last month, not on the substance of the challenge to M-F, rather on the 100+ year old notion that corporations are not entitled to contrubute to political campaigns. It is all too possible that the SCOTUS will enshrine the notion of corporate personhood in a direct ruling, eliminate bans on corporate contributions and possibly strike down contribution limits all together.

Under this likely scenario, most campaign finance reform, both arising from the progressive era as well as post-Watergate, will be thrown out. Absent contribution limits, the only way to check corporate power over elections is for government to fund election campaigns of candidates with a minimum baseline of support. Arizona has that statewide, San Francisco has had it for Supervisors and expanded it to Mayor and that version includes “unlimited” matching funds after one candidate breaks the designated, non-binding spending limit. Here in SF, we have more than a 50% record of beating downtown San Francisco’s corporate candidates with community candidates for the equivalent of city council.

Unless we do Public Financing, the SCOTUS will shut the door on any chance average folks have of participating in politics and it will become impossible to open again. Truly a corporate coup d’etat by the remants of the Bush regime just as they are losing power, like white people did here in CA with Prop 13 as they saw the multicultural demographic writing on the wall.

The public can only bear so much b.s. and they know a lot of the truth when it comes to domestic issues.

AFAIC, the ‘consumer Protection Agency’ is just cover for the unwillingness to truly address the issues and I’m not alone in this perpsective:
“MARCY KAPTUR: Congress has really shut down. I’m disappointed in both chambers, because wouldn’t you think, with the largest financial crisis in American history, in the largest transfer of wealth from the American people to the biggest banks in this country, that every committee of Congress would be involved in hearings, that this would be on the news, that people would be engaged in this. What we’re seeing is– tangential hearings on very arcane aspects of financial reform. For example, now we’re going to have a consumer protection agency to help the poor consumer, who doesn’t understand all of this, rather than hearings on the fundamental new architecture of reforming the American financial system, so that we have prudent lending, capital accumulation at the local level again; that we encourage savings and limit debt by the American people. Our country needs this. Those aren’t the hearings that are happening.

If you want a marker at the Federal level of how serious we are to get justice out of this financial crisis, look at the F.B.I. Look at the number of people who are really prosecuting and investigation mortgage fraud and securities fraud. It is so small

I’ve been one of the Members of Congress trying to increase by ten times the agents to get at the justice issues for the American people. For companies that have been hurt. For shareholders that have been hurt. Our government isn’t doing it. That it’s very easy to look at the budget of the F.B.I. in mortgage fraud and securities fraud and say, ‘How serious is the government?’ And until those numbers increase, we will not begin to get justice.”

And when you have 80 million people who either can’t read or read at a 4th grade level, what good does such an agency really provide?

A couple reactions: at this point, whenever I read the words ‘Chicago’ (Univ of) and ‘economics’, I brace myself.

Second, Robert Reich’s ‘Supercapitalism’ does a better job than Goolsbee in analyzing the dynamics at work, IMHO. What Goolsbee is doing (apparently without realizing it) is acting precisely as someone who has been ‘captured’ by corporate interests would behave. He is not questioning ‘too big to fail’; he’s putting lipstick on the heinous pig of greed.

Third, those derivatives should simply be outlawed. Period.
As another commenter pointed out, they’re destabilising and as near as I can see they have already destabilised pension funds nationwide, a problem that probably won’t hit public consciousness until 2010, which ought to be one hell of a bumpy ride. (Perhaps if the turbulence gets rocky enough, Obama will even wake up and replace Geithner with Robert Reich — but then, I’m a dreamer…)

Fourth, as the intro to Nomi Prins superbly written ‘It Takes A Pillage’ points out, we’re paying for the lost gambles. We’re paying about 100x the amount of the costs of simply paying off all the mortgages that went under. The fact that Goolsbee is not honest about that fact, that he is still willing to honor what are basically fraudulent ‘contracts’ is to my mind a disaster in the offing.

Fifth, FWIW, I don’t miss a single day of MSNBC’s “Morning Meeting” these days – and I’d bet that I’m not the only one. When the host, Dylan Ratigan, explained his use of the term ‘Corporate Communism’ last week, I felt as if the sense that many of us clearly have of being screwed by a corrupt system is now so clear to millions that it is now ‘permissible’ to say it publicly. And the scorn that I see on the few econ blogs and columns that I read (even including the Financial Times, go figure…!) seems to share the same sensibility that the level of corruption — and I have to include the government for its failure to regulate, investigate, and prosecute absolutely egregious, flagrant sociopathic conduct — has gone beyond some kind of ‘tipping point’.

If I’m reading those ‘tea leaves’ correctly, then Goolsbee’s proposal will be met by some kind of drama-club wailing and keening among the banking and finance sectors, while people with sharper, more pragmatic, tougher minds will view these limp-wristed, feckless proposals with ridicule and scorn.

Where in Goolsbee’s proposals does he implement what George Soros — who ought to know! — recommends: regulating credit, as well as ‘monetary policy’? I just don’t see it.

This really looks like Goolsbee his putting machiolations on a vampire’s castle and trying to convince us all that things will be better now.

I don’t buy any of it for an instant.
It still allows flagrantly destabilizing instruments, and it still leaves in place very dangerous incentives.

At some point, the complexity has overwhelmed the ability of regulations and regulatory bodies to keep up with monitoring everything.

Given that fact, the structure needs to be completely rethought.

Sorry, but this is akin to Goolsbee serving up some version of XPExtreme, with customizations for each state. That’s madness.
What we need is to clear the decks and build some kind of Open Source, transparent banking system.

That will have to be far more public, and utility-oriented, than our present system. Too bad neither Congress nor the President has the guts to take that on. The existing system fit the period from 1930-1995. It no longer works, but like any system it has much more invested in trying to remain in place than in any kind of fundamental reshifting.

I predict system failure.
How fast, I dunno.
But this is simply not going to work.

Because it fails to model itself upon what we know of human behavior, and it incentivizes concentrating wealth. Stupid, stupid, stupid.

And masaccio@8, sorry, but I don’t fully understand the significance of your point here. Do you have links…?

An example of a department with a mandate that could end is the Drug Enforcement Agency, who have no interest is “finishing” their work. Or a military who “win” wars.