This morning I ranted at my long suffering wife after reading this paragraph from this morning’s Times:
Now, the comment deadline ushers in a critical phase. Equipped with arguments from every side, regulators will turn their focus to completing details of the rule.
The article is about the comment period that recently closed regarding the Volker rule. The article itself led off with several paragraphs detailing the massive numbers of comments that were submitted by the financial industry and their high priced lawyers, accountants and enablers. How, I ranted, after reporting on that, can you say that the SEC had heard from all sides?
Well, of course I had no objective data to confirm my preconception, though I would have bet both my fortune and my sacred honor that I was right. Well, it turns out I was right, as this portion of a comment, submitted by Occupy the SEC shows:.
Of the comment letters received about 90% are from financial institutions, and another 5% are from foreign governments objecting to the priority the US regulators have gifted to US traders in US Government Bonds. The remaining 5% are from ordinary folks, like Mr. Volcker, Occupy the SEC and other public interest groups.
It’s interesting that 95% of the comments reflect the views of the 1%, and the views of the 99% are embodied in the comments of the remaining 5% of commenters.
The system is gamed from the start. The Volker rule itself is a Rube Goldbergian device to accomplish what could more easily and effectively be accomplished by reenacting Glass Steagall, something that worked for more than 50 years. Because the simple expedient of separating commercial banks from investment banks is off the table, the SEC must engage in complex rulemaking to try to reach some of the same objectives the simple solution accomplished with ease. The rule as proposed by the SEC is already shot full of holes, and now the banks are circling in for the kill.
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