As if the past 8 years isn't enough proof of the failure of Republican ideas on, well everything... we finally get SEC Chairman Christopher Cox saying it.
From the NY Times:
WASHINGTON — The chairman of the Securities and Exchange Commission, a longtime proponent of deregulation, acknowledged on Friday that failures in a voluntary supervision program for Wall Street’s largest investment banks had contributed to the global financial crisis, and he abruptly shut the program down...
"The last six months have made it abundantly clear that voluntary regulation does not work," he said in a statement. The program "was fundamentally flawed from the beginning, because investment banks could opt in or out of supervision voluntarily. The fact that investment bank holding companies could withdraw from this voluntary supervision at their discretion diminished the perceived mandate" of the program, and "weakened its effectiveness," he added.
When even the Bush appointed Chairman of the Securities and Exchange Commission says voluntary regulation caused the financial mess, you know GOP ideas are dead.
While this is obvious to all of us here, let's hope we see Obama run with this line. Let's also hope McCain latches on to the House GOP plan for "more taxes cuts and less regulation".
Not only that, Obama can now extrapolate from the financial mess to all things, especially the fight against Global Warming. Republicans love to say we just need to create "voluntary" regulations to have companies manage the pollution and carbon the create.
Methinks you won't have to try hard to say, "Well look at what voluntary did to our economy--we for sure can't do that with our planet".
The story also explains how corrupt and incestious all things Republican are:
The program Mr. Cox abolished was unanimously approved in 2004 by the commission under his predecessor, William H. Donaldson. Known by the clumsy title of "consolidated supervised entities," the program allowed the S.E.C. to monitor the parent companies of major Wall Street firms, even though technically the agency had authority over only the firms’ brokerage firm components.
The commission created the program after heavy lobbying for the plan from all five big investment banks. At the time, Mr. Paulson was the head of Goldman Sachs
Isn't that unbelievable? The guy who lobbied for the "self regulation" that created this mess is the same guy asking for $700 Billion.
On the brightest note on this mess I've seen in a while, Calculated Risk links to Bloomberg article where Pelosi is quoted as saying:
"It would be my hope that this could be resolved today, that we'd have a day for the American people and members of Congress to review the legislation on the Internet."
Well, Nancy, you are the Speaker. I'm sure you could make sure this legislation gets online for all the bloggers--and just ordinary citizens--to scour through first.
And hopefully, it will help kill any large bailout plan until Jan 20, 2009.
Hat-tip to Barry Ritholtz at The Big Picture--another kick ass econ blog.