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To hear Liberals, you'd think the GOP did away with ALL Regulations while in Power...

Discussion in 'Economy' started by mal, Oct 25, 2010.

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Oct 25, 2010 #1

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mal Diamond Member

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Yet I never see ANY Evidence of this Claim...

What Industry is Regulation Free?...

What Industries have had Regulations Removed by the GOP?...

Anyone?...

peace...
Oct 25, 2010 #2

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uscitizen Senior Member

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Republicans just tend to underfund agencies representing things they do not like.
So that enforcement is very lax.
They kow they cannot dereg everything.
But they can dream?
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Oct 25, 2010 #3

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Bush was a big fan of rolling back EPA standards via Executive Order, non-enforcement, or defunding. It's actually pretty hard to roll back regulations using legislation or the courts as such a maneuver usually ends up reminding folks why the regulation was there in the first place.

The Bush EPA: A Spooky Retrospective

You can find a summary of some of the regulatory decisions made under Bush there when it comes to the Environment. I will admit, it's a partisan pro-climate change site, but a great deal of the claims are documented if you care to check them out.

Googling "Bush and EPA" gives links to all kinds of articles on the web about some of the decisions he made that rolled back EPA regulations.
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Last edited: Oct 25, 2010
Oct 25, 2010 #4

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Mms...
Oct 25, 2010 #5

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mal Diamond Member

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Still not seein' the, "The REPUBLICans did away with Regulations when they were in Power" Cry I am Hearing on the National Radio Networks formerly Known as Err Amerika...

To Thumb Fartmann's Credit, he Blames EVERYTHING on the 80's and Reagan...

Including Slavery.

peace...
Oct 26, 2010 #6

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finebead VIP Member

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mal said: ↑

Still not seein' the, "The REPUBLICans did away with Regulations when they were in Power" Cry I am Hearing on the National Radio Networks formerly Known as Err Amerika...

To Thumb Fartmann's Credit, he Blames EVERYTHING on the 80's and Reagan...
Click to expand...

Here is one of the worst, that created the "too big to fail" banks, by allowing them to take on way too much debt, that had been prevented after the great depression.

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agencys failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

A lone dissenter a software consultant and expert on risk management weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.

One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told those with assets greater than $5 billion.

Weve said these are the big guys, Mr. Goldschmid said, provoking nervous laughter, but that means if anything goes wrong, its going to be an awfully big mess.

Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nations corporate laws after a wave of accounting scandals. Do we feel secure if there are these drops in capital we really will have investor protection? Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks balance sheets.

Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.

Im very happy to support it, said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: And I keep my fingers crossed for the future.

The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.

After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.

With that, the five big independent investment firms were unleashed.

In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.

Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio a measurement of how much the firm was borrowing compared to its total assets rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.

The 2004 decision for the first time gave the S.E.C. a window on the banks increasingly risky investments in mortgage-related securities.

But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
Click to expand...

http://www.nytimes.com/2008/10/03/business/03sec.html?_r=1
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Oct 27, 2010 #7

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mal Diamond Member

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finebead said: ↑

mal said: ↑

Still not seein' the, "The REPUBLICans did away with Regulations when they were in Power" Cry I am Hearing on the National Radio Networks formerly Known as Err Amerika...

To Thumb Fartmann's Credit, he Blames EVERYTHING on the 80's and Reagan...
Click to expand...

Here is one of the worst, that created the "too big to fail" banks, by allowing them to take on way too much debt, that had been prevented after the great depression.

Many events in Washington, on Wall Street and elsewhere around the country have led to what has been called the most serious financial crisis since the 1930s. But decisions made at a brief meeting on April 28, 2004, explain why the problems could spin out of control. The agencys failure to follow through on those decisions also explains why Washington regulators did not see what was coming.

On that bright spring afternoon, the five members of the Securities and Exchange Commission met in a basement hearing room to consider an urgent plea by the big investment banks.

They wanted an exemption for their brokerage units from an old regulation that limited the amount of debt they could take on. The exemption would unshackle billions of dollars held in reserve as a cushion against losses on their investments. Those funds could then flow up to the parent company, enabling it to invest in the fast-growing but opaque world of mortgage-backed securities; credit derivatives, a form of insurance for bond holders; and other exotic instruments.

The five investment banks led the charge, including Goldman Sachs, which was headed by Henry M. Paulson Jr. Two years later, he left to become Treasury secretary.

A lone dissenter a software consultant and expert on risk management weighed in from Indiana with a two-page letter to warn the commission that the move was a grave mistake. He never heard back from Washington.

One commissioner, Harvey J. Goldschmid, questioned the staff about the consequences of the proposed exemption. It would only be available for the largest firms, he was reassuringly told those with assets greater than $5 billion.

Weve said these are the big guys, Mr. Goldschmid said, provoking nervous laughter, but that means if anything goes wrong, its going to be an awfully big mess.

Mr. Goldschmid, an authority on securities law from Columbia, was a behind-the-scenes adviser in 2002 to Senator Paul S. Sarbanes when he rewrote the nations corporate laws after a wave of accounting scandals. Do we feel secure if there are these drops in capital we really will have investor protection? Mr. Goldschmid asked. A senior staff member said the commission would hire the best minds, including people with strong quantitative skills to parse the banks balance sheets.

Annette L. Nazareth, the head of market regulation, reassured the commission that under the new rules, the companies for the first time could be restricted by the commission from excessively risky activity. She was later appointed a commissioner and served until January 2008.

Im very happy to support it, said Commissioner Roel C. Campos, a former federal prosecutor and owner of a small radio broadcasting company from Houston, who then deadpanned: And I keep my fingers crossed for the future.

The proceeding was sparsely attended. None of the major media outlets, including The New York Times, covered it.

After 55 minutes of discussion, which can now be heard on the Web sites of the agency and The Times, the chairman, William H. Donaldson, a veteran Wall Street executive, called for a vote. It was unanimous. The decision, changing what was known as the net capital rule, was completed and published in The Federal Register a few months later.

With that, the five big independent investment firms were unleashed.

In loosening the capital rules, which are supposed to provide a buffer in turbulent times, the agency also decided to rely on the firms own computer models for determining the riskiness of investments, essentially outsourcing the job of monitoring risk to the banks themselves.

Over the following months and years, each of the firms would take advantage of the looser rules. At Bear Stearns, the leverage ratio a measurement of how much the firm was borrowing compared to its total assets rose sharply, to 33 to 1. In other words, for every dollar in equity, it had $33 of debt. The ratios at the other firms also rose significantly.

The 2004 decision for the first time gave the S.E.C. a window on the banks increasingly risky investments in mortgage-related securities.

But the agency never took true advantage of that part of the bargain. The supervisory program under Mr. Cox, who arrived at the agency a year later, was a low priority.
Click to expand...

http://www.nytimes.com/2008/10/03/business/03sec.html?_r=1
Click to expand...

Big Banks aren't Regulated?...

peace...
Oct 27, 2010 #8

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Dimmies also conveniently forget that the deregulation directly responsible for too big to fail financial institutions was signed by none other than Bill Clinton.
Oct 27, 2010 #9

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Toro Diamond Member

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It is wrong to say that there is less regulation in general than 10, 20, 30+ years ago.

The problem is that what got us into this mess was largely unregulated, and the financial industry paid lobbyists and politicians handsomely to keep it that way.
Oct 27, 2010 #10

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finebead VIP Member

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mal said: ↑

Big Banks aren't Regulated?...
Click to expand...

Sure, all the ones that are "NOT" too big to fail are regulated.

I have shown the repub controlled SEC relaxing the Net Capital Rule from 15:1 to 45:1 and allowing the investment banks to "monitor their own risk", which did not work out at all.

This excessive leverage allowed by the repub SEC directly led the failure of Lehman Bros, which paniced the financial markets in Sept. 2008, it led to the sale of Bear Stearns and Merrill Lynch for pennies on the dollar, and it led to the conversion of Goldman Sachs and Morgan Stanley from investment banks to commercial banks to bring them under regulation of the commercial banking rules to prevent the risky behavior they engaged in.

When we bailed out AIG, we were really bailing out Goldman who was heavily dependent on AIG Credit Default Swaps (CDS).

These investment banks had been in business since prior to the Civil War, and survived great depression and both world wars, but in 5 years after the net capital rule was relaxed, all had lost control of themselves at investment banks via bankruptcy, sale, or conversion of charter.

The question is not so much "are the banks regulated" as, "were the banking regulations sufficient to deal with the activities we were engaged in", and the answer clearly is no. There were not adequate regulations to prevent a meltdown of our financial infrastructure.

The deregulation of the repub SEC of the Net Capital rule allowed the 5 biggest banks to increase their risk, without supervision, leading to their failure of the "too big to fails".

Do you want to contend this action was insignificant? You asked for an example of repub deregulation, and I have shown it to you.

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