Monday, March 31, 2008

Paulson's speech about the economy

Which Krugman was completely right about. You can find it Here. The speech is an almost Soviet exercise at using a lot of oxygen while saying nothing. In terms of concrete suggestions for the mortgage crisis the list is laughable and a slap in the face for people whose homes have been foreclosed.

"Legislation should set forth or task this Commission to establish minimum standards which should include personal conduct and disciplinary history, minimum educational requirements, testing criteria and procedures, and appropriate licensing revocation standards."

That's it. Instead of forbidding subprime lending or predatory lending the all powerful Treasury Department has decided to offer harder tests for mortgage agents to get licenses and more schooling as a necessary requirement.

Other concrete innovations include an agency to oversea credit and debit card transactions to make sure that there isn't fraud, as well as deregulation of insurance agencies.

"Payment and Settlement Systems

Payment systems are critically important for overall market stability. On a typical business day, US payment and settlement systems settle transactions valued at over $13 trillion. Every American relies on a payment system in one way or another, everyday. Yet, our government is behind the curve in payment system oversight. "

Payment and settlement systems is a fancy way of saying credit, debit, and check transactions.

"Optional Federal Charter for Insurance

Insurance presents a clear need for regulatory modernization. States have been the primary regulator for insurance for over 135 years. While a completely state-based regulatory system for insurance may have been appropriate at one time, insurance market changes have put increasing strains on the system.

A state-based regulatory system is quite burdensome. It allows price controls to create market distortions. It can hinder development of national products and can directly impact the competitiveness of US insurers. There have been numerous attempts to modernize the regulatory structure for insurance. At this time, it seems clear that the way forward is to give insurers the ability to elect for federal regulation."

In other words, if the insurance company doesn't like that a state is making it offer affordable rates it will be able to get a federal charter and break the state law.

1 comment:

professor rat said...

You sound like you are using the term 'Soviet' in a way that attacks the deformed workers state. What sort of 'Left thought' is this!
I must report you to the central committee of the recovering Trotskyist's Platform immediately.
Pack your baggage.