Obama took the fight over financial reform today to the scene of the crime, Wall Street. He urged Wall Street to work with him and not against him on financial reform saying, “ultimately there is no dividing line between Main Street and Wall Street”.
Via the Associated Press:
President Barack Obama rebuked Wall Street for risky practices Thursday even as he sought its leaders’ help for “updated, commonsense” banking regulations to head off any new financial crisis
“Ultimately there is no dividing line between Main Street and Wall Street. We rise or we fall together as one nation. So I urge you to join me,” said in a high-stakes speech near the nation’s financial hub. His audience included some of the nation’s most influential bankers.
Obama made his case for stricter over site of financial institutions. (via Associated Press)
Taking his argument for stronger oversight of the financial industry to the city where the economic meltdown began, Obama said it was “essential that we learn the lessons of this crisis, so we don’t doom ourselves to repeat it. And make no mistake, that is exactly what will happen if we allow this moment to pass.”
Although Republicans and Conservatives continue to try to portray Obama as a Socialist, who is against free-markets. Obama had this to say (via Associated Press), “A free market was never meant to be a free license to take whatever you can get, however you can get it.”
Are you wondering what exactly Obama’s and Congress’s financial reform plan entails? (via Associated Press)
The legislation would create a mechanism for liquidating large, interconnected financial firms that are so big that their sudden collapse could shake the economy. At the height of the crisis in 2008, the Bush administration and the Federal Reserve provided billions of taxpayer dollars to prop up the giant insurer American International Group Inc., several banks and various financial institutions considered too big to fail. The moves were highly unpopular with voters.
The bills also, for the first time, would impose oversight on the market for derivatives — complicated financial instruments whose value is derived from the value of other investments. The measures also would create a council to detect threats to the broader financial system and establish a consumer protection agency to police consumers’ dealings with banks and other financial institutions.
As a side note: If interested in more detailed information on financial reform and the economy in general. I suggest reading the Baseline Scenario blog and Ezra Klein‘s blog at the Washington Post. There other venues as well, such as Paul Krugman of the New York Times.