Everyone's talking about "Oversight" as the recipe to prevent a future financial break-down:
Plan for Financial Oversight Draws a Mixed Response
.... Mr. Frank said the financial and economic catastrophes of the last 18 months had created a new political consensus in favor of tighter financial supervision. Mr. Frank said he hoped to pass a bill “very soon” to give the federal government “resolution authority” to seize control, restructure and shut down troubled financial institutions.
We now have financial institutions that are "too big to fail". There's nothing new about this. It's what Teddy Roosevelt and both Populists and Progressives -- over a 100 years ago -- used to call 'The Trusts'.
They were broken up thanks to Progressive and New Deal legislation. Then in the Era of Regulation Laxity, restrictions were removed and surprise, surprise, they came roaring back.
Hoping that "oversight" will do the job is a joke. We had "oversight" with the ratings agencies like Moody's and look where it got us. Now all it seems we're going to do is trade one form of oversight (admittedly wholly inadequate and private) with another (Federal and perhaps given the complexity of the market equally as inadequate).
Real 'reform' would be to prevent the problem in the first place. As Matt Taibbi told Rachel Maddow:
If these companies are too big to fail, they're too big to exist.
Bring back Glass-Steagall! That's what real reform looks like. Everything else is just window dressing.
