Friday, September 6, 2013

I wish Kristi Noem could give a straight answer on financial reform.  U.S. Representative Noem (R-SD) was at a town hall meeting in Mitchell, SD, a couple of weeks ago, and when pressed about why she wouldn't support reinstating a Depression-era law (Glass-Steagall) that keeps brokers and bankers from working together under the same corporate umbrella, she glibly said (per the Mitchell Daily Republic),  "We need reforms different from Glass-Steagall.  I don't think it's the legislation we need to reform our financial industry right now."  I call her answer "glib" because when pressed as to what she thinks the answer is, per the MDR again, "Noem didn't elaborate and moved on to other questions."                                                        This is ridiculous and it makes me wonder if Noem even understands that at the core of the financial collapse that occurred a few years back was the easy lending that took place because bankers were all too willing to make shaky loans to customers solicited by their associates at their firms' brokerage divisions.  It was easy money all the way around, with the brokers reaping hefty commissions from the funds loaned out by bankers who made their money from origination and other fees.                                                    
     Very cozy stuff, and just the same dynamic that occurred in the 1920s, leading up to the crash of '29, only difference being it was stocks, not real estate, that collapsed back then.  The 1929 fiasco led to a sweeping reform of the financial services industry known as the Glass-Steagall Act, which remained in place until the late 1990s, when President Clinton signed a measure essentially repealing it, setting the stage for the replay that continues to bedevil the American economy.   That Noem continues to reject Glass-Steagall's reinstatement is, first off, a rejection  of the South Dakota Legislature's 2013 resolution calling for just such a reinstatement, and a rather baffling blow-off of her constituents, considering that she won't suggest what she believes to be "reforms different from Glass-Steagall."                                                                                      I don't know about you, but as her constituent, I'd like to know what reforms Noem has in mind for solving the problem of conflicting interests between bankers and brokers.  The only solution I can think of is regulating the conflict out of existence.  I'd love to know what Noem thinks can be done about it. 
"We need reforms different from Glass Steagall," Noem said. "I don't think it's the legislation we need to reform our financial industry right now. - See more at: http://www.mitchellrepublic.com/content/noem-farm-bill-process-mess#sthash.9HYiXij5.dpuf
"We need reforms different from Glass Steagall," Noem said. "I don't think it's the legislation we need to reform our financial industry right now. - See more at: http://www.mitchellrepublic.com/content/noem-farm-bill-process-mess#sthash.9HYiXij5.dpuf
"We need reforms different from Glass Steagall," Noem said. "I don't think it's the legislation we need to reform our financial industry right now. - See more at: http://www.mitchellrepublic.com/content/noem-farm-bill-process-mess#sthash.9HYiXij5.dpuf

No comments:

Post a Comment