TIMES ONLINE: Apparently, during his big speech on financial reform last night, there were audible groans on the floor of the New York Stock Exchange when President Obama said that he had “always been a strong believer in the power of the free market”.
This was presumably because that particular element of the President’s audience thinks he is anything but. Applied to their own corner of the US economy, though, why they think as they do is anyone’s guess. One year on from the collapse of Lehmans, it looks to be business as usual on Wall Street, with big bonuses in the offing amid signs that, as Mr Obama said, the lessons of the crisis have been ignored by some.
But for all his finger-wagging, for all his promises to undertake serious financial reform, the President has actually done remarkably little so far.
Apart from trying to convince Americans that big government bailouts of financial institutions have come to an end, last night’s speech was all about trying to get that process back on track, which is why a key element of Mr Obama’s plans — a new consumer protection agency to oversee financial products such as mortgages and personal loans — was again flagged.
Yet the measure looks some way from ever reaching the statute book due to a formidable lobbying effort by the financial services industry.
Other elements of Mr Obama’s proposals, such as measuring and seeking to regulate systemic risk, are even further away. Similarly, while the Administration has tabled proposals which would ensure that many over-the-counter derivatives are traded on regulated exchanges, centrally cleared and more accurately reported, these plans are a long way from being enacted.
Part of the problem is that Mr Obama’s fellow Democrats, despite controlling Congress, seem far more determined to push through healthcare reforms before they ever turn their attention to an overhaul of financial regulation.
All of this is hugely regrettable and helps to explain why so many ordinary folk on Main Street believe that the President is in thrall to Wall Street.
Meanwhile, in fairness to those NYSE traders who groaned at Mr Obama’s comment last night, the President is giving them good reason to doubt his free-market credentials. >>> Ian King, Business commentary | Tuesday, September 15, 2009
