Must Read from Joe Conason: Are Dems, GOP Serious on Financial Reform? [View All]

Discredited as the financial powers are, their wealth alone continues to provide them with wildly disproportionate influence over the political process. Given the complexity of the modern global economy -- and the issues of derivative trading, consumer protection and the winding down of too-big failures -- it will be difficult for voters to judge what qualifies as true reform. Fortunately, there are experts with years of experience in the markets who seek to promote the public interest instead of gaming the system.

Among their basic recommendations are simplification and transparency in the financial markets, decreased leveraging, expanded regulation, permanently restrained interest rates and an independent consumer protection agency. At the very least, say independent experts such as Robert A. Johnson, the former chief economist of the Senate Banking Committee, we must prohibit institutions protected by federal deposit insurance from undertaking deals that involve huge risks.

Moreover, we must end "too big to fail" by ensuring that government has the power and resources to dismantle such firms -- without disastrous disruption and without enriching those who gamble blindly, expecting taxpayers to reimburse their losses.

Democrats sound more serious than Republicans in confronting these existential challenges to the economy, but will they go far enough? Unless they can pass the necessary minimum reforms, we may someday find ourselves facing a worse crisis -- and regretting that we didn't restrain the bankers when we had the chance.


http://www.realclearpolitics.com/articles/2010/04/29/it_takes_power_to_control_power_105355.html