Forum Post: The financial system should support economic activity, not the other way around
Posted 13 years ago on Oct. 18, 2011, 6:03 p.m. EST by jeyowell1
(57)
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Repeal the 879-page Dodd-Frank act of 2011. Reinstate the 37-page Glass-Stegall act of 1933. G-S worked for 60 years. Despite its length, D-F is still not complete with 243 rules yet to be defined by regulators. The regulators have asked the financial industry to fill in those blanks. Essentially the foxes have been asked to not only guard the henhouse but to build it too. Right now the banks derive only 30% of their income from lending and 70% from gambling, euphemistically referred to as “trading”. One by-product of this is that all the monetary benefit from productivity gains in the last decade accrued exclusively to the “financial sector”. The imperative of a functional financial system is simple: efficient allocation of capital to productive enterprise, because the financial system should support economic activity, not the other way around. Clearly, the titans of finance have failed miserably at this, yet they not only still have jobs, they continue to be richly rewarded for their incompetence.
Sounds good to me. But without significant political reform, any realization of policy aims would soon be repealed or worked around with no means for redress beyond camping out in parks all over again. I think we need to demand a constitutional amendment for clean campaign financing, instant run-off voting for federal offices, and a verifiable paper trail for all federal elections.
Amen