Sunday, May 13, 2012

RNC Chairman: JP Morgan Chase's $2 billion loss proves that we need LESS regulation

RNC Chairman, Reince Priebus was on Meet the Press today to discuss, among other things, the topic of financial regulation in the wake of JP Morgan Chase's $2 billion trading loss, this quarter. (Skip to 7:31)

Gregory: [...] In light of the losses on Wall Street this week, you think we need less financial regulation rather than more?

Priebus: I think we need less. I mean the fact of the matter is that Dodd-Frank didn't work. The reality is that we've got 5 to 10 banks in this country, that under our GDP, those 5 to 10 banks make up a huge majority of this country's GDP. Now that's an issue. I do agree that this too big to fail mentality is a problem but I don't think Dodd-Frank fixed anything, in fact I think they made things worse. 
Gregory: So you're satisfied with the way Wall Street operates with the kinds of bets were taken by JP Morgan Chase that led to this kind of loss. You don't think Washington regulators can remedy that?

Priebus: Well, certainly Dodd Frank didn't remedy it. And the record of this president is that he wasn't able to remedy it either.

Gregory: Senator Levin said the Vockler rule, which would govern how they use their money to make these kinds of trades to hedge their bets, it would address that.

Preibus: Listen, I'm not a financial expert or an expert on SEC, but I can tell you this president talks a lot about regulation on Wall Street, he takes millions and millions of dollars on Wall Street, what he's done over the last 3 1/2 years...


...they haven't controlled any of these things. So, they've made things worse.

There's a few angles to this. First off, I'm continuously amazed that despite what happened at the end of 2008, with that whole economic collapse thing, low lives like Preibus are not only not afraid to support going back to those policies, but are willing to do so, loudly and proudly.

Second of all, if you, yourself admit you're not a financial expert, you probably shouldn't be criticizing someone else until you've brushed up on the subject.

Third, while it's true that Dodd-Frank, as it was written, didn't prevent this from happening, I'm curious how it "made things worse".

 Fourth, and this is probably the most important point, the reason this happened was because the provision in Dodd-Frank that would have prevented the current situation hasn't even taken effect yet:

The so-called Volcker rule is expected to take effect this summer. But the Fed clarified Thursday that it won't enforce it until July 2014.

Congress directed regulators to craft the rule as part of an extensive regulatory overhaul passed after the 2008 financial crisis. Regulators hope it will limit the kind of risky trading that hastened the financial crisis and forced taxpayers to bail out the banks. It was named after former Federal Reserve Chairman Paul Volcker.

The Fed said it issued the statement to clear up confusion. Some banks had worried that they might have to 
start complying with the new restrictions sooner.

Finally, what exactly was the point of bringing up the fact that Obama's been receiving millions of dollars in campaign donations from Wall Street? Is he sad that he's taking money from them, while still having the audacity to enact mean regulations? Or is this another Rovian attempt to show that Obama's the one in cahoots with the big bad bankers, while simultaneously arguing in their favor by repealing Dodd-Frank?

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