More Regulation - There's a Winning Formula

I mistakenly turned on the start of Keith Olbermann's program this evening. In his typical O-booster style, the Keithster stated that Obama was offering a six point plan for healing the economy while McCain could only complain about alphabet soup.... That's when I hit the remote. Figuring Olbermann to always be exagerating for his guy, I thought I would check up on this six point plan. It's proving tougher than I thought. While many web sites allude to Obama having such a plan, for the life of me I can't find the details. Why am I not surprised?

However, what little I could find:

Obama laid out a six-point regulatory plan. It would subject all financial institutions that can borrow from the government to more oversight, crack down on trading practices he said border on market manipulation and create a financial advisory group to discuss potential problems with the president.

Obama also said he would push a $50 billion emergency economic plan to repair infrastructure and schools, offer a 10 percent tax credit on mortgage costs to middle-class homeowners and change bankruptcy laws to make it easier for people in financial trouble to stay in their homes.

So clearly more regulation is the answer? How about we stop creating these messes when the Congress establishes crony-capitalist enterprises like Fannie and Freddie with implicit guarantees from the taxpayers. How about we let some banks fail and let some real pain hit Wall Street. Protect the depositors by all means through the FDIC. But without the pain of failure and loss of their wealth, the Wall Street types will continue to take risks that are too large for the potential gain.

Secondly, how the heck is $50 billion for infrastructure and schools related to this crisis. Obama's instincts to throw my money at problems are truly frightening. Also, memo to Suit, it already is almost impossible to lose your home in bankruptcy proceedings. so please get a clue. So after throwing $200 billion at Fannie and Freddie and another $85 billion at AIG, Obama says what the heck, let's throw down a side bet on infrastructure for another $50 billion. Meanwhile the federal deficit is approaching $500 billion this year before the costs of bail outs. Wait, the Fannie/Freddie bail out won't cost anything, the geniuses in the Bush administration have decided that liability shouldn't be on the government's balance sheet. (Bush must REALLY hate McCain.)

And about that alphabet soup comment. McCain is in fact correct, the overlap in jurisdiction creates uncertainty, but also opportunity for the unscrupulous who use the confusion to their advantage. More effective and accountable regulation, not new regulation might be a better prescription to go with not creating the messes in the first place.