Paul Volcker and the return of Glass Steagall as part of Obama’s long term plan

Whatever you think of President Obama’s policies, one thing to note about him is that he plans long term. When he brought Paul Volcker onto his team, I first wondered if it was just window dressing. Volcker all but dropped off the radar until recently, when he has been saying scathing things about the big banks. Now there’s this: Obama to Propose New Limits on Banks – In this article, the WSJ says that…

“Mr. Obama is also expected to endorse, for the first time publicly, measures pushed by former Federal Reserve Chairman Paul Volcker, which would place restrictions on the proprietary trading done by commercial banks, essentially limiting the way banks bet with their own capital. Administration officials say they want to place “firewalls” between different divisions of financial companies to ensure banks don’t indirectly subsidize “speculative” trading through other subsidiaries that hold federally insured deposits.”

Why does any of this have to do with the long term? This could have been done anytime in the last year. Instead, Obama shored up the banks and let them more or less do what they wanted. And what did they do? They went on to rake in some serious profits and pay out some huge bonuses, much to the dismay of Obama’s supporters. However, Obama in the short term has focused on the more difficult task, which was Health Care Reform, while cajoling the banks to show some restraint (which they did not).  Once that is settled, one way or another, Obama will pivot towards bank reform, which is what he appears to be doing now. Just in time for the 2010 elections. Which is the plan.

After that, the plan will be to work on climate change, propose improvement to health care reform,  complete the draw down of forces in Irag and Afghanistan, and get the economy in the best shape it can be for the U.S. presidential election. That’s the long term plan. Watch.

2 responses to “Paul Volcker and the return of Glass Steagall as part of Obama’s long term plan

  1. I hope he manages it, if only so that I can point and laugh at all the American republicans I know who keep on and on and on about how awful he is.

    • smartpeopleiknow

      Bank reform is tough, no doubt. But it’s like quitting smoking: it’s tough, but cancer is tougher. Same with banks: reforming them is tough, but not as tough as bailing them out.

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