Homeowner's Blog

Our Savings are a Little Safer Today

We applaud Congress for passing comprehensive financial services reform legislation. While the legislation is imperfect in the view of most proponents and opponents, until now there has been no new measure in place that would preclude another massive financial meltdown that could have caused another Great Depression. That alone is a significant step forward. It is far better than relying on the memory spans of the small number of senior corporate leaders whose decisions caused the meltdown from preventing its recurrence.

The outcome clearly reaffirms the analogy of the Congressional legislative process to the making of sausage. In the view of many, the legislation does not address all the problem areas. In the view of others much of it is unnecessary and/or harmful. There is probably some truth in both views. Clearly the legislation's effectiveness in many areas will depend on the process of developing the numerous implementing regulations, where the outcomes in each case can range from strong and effective new rules to unintended consequences, and/or a waste of everyone's time.

Based on the history of major reforms, we will probably see some of all three. The legislation will also be revisited many times both to address loopholes and overkill. Both lie in the eyes of the beholders, and will certainly be influenced public opinion regarding financial services sector practices after the regulations have been implemented. Nevertheless there is today less likelihood of a future financial services meltdown than there was yesterday. For that we should be grateful, and thank the sausage makers for all the time and effort they put into the process.

Obama Announces Major Financial Regulatory Reforms

President Barack Obama proposed sweeping changes to the way the U.S. government regulates financial markets. It is unfortunate that many large financial institutions adopted the unsound business practices that caused tremendous losses to their stockholders and American homeowners, and still threaten both the U.S. and the global economy. No government regulations forced them to cause this economic debacle. Unfortunately there is currently nothing but their short memory spans to prevent the same thing from happening again in the future.

The current economic crisis makes it clear that we must take action to prevent future meltdowns of the financial services sector. We applaud President Obama for this proposal and hope that reasonable financial services sector leaders who recognize this reality will be willing to work with other stakeholders to craft a solution that erects needed protections without unnecessary restrictions on the private sector.