Barney Frank visited the set of the Rachel Maddow Show to talk about the TARP hearings and at the end of the interview he said something that was music to my ears.
Maddow: Should they be constrained from doing those things by rules rather than just being shamed for when they don't do it?
Frank: There's no question about it for the future. Look there's a problem in the American system and we as liberals should be honoring this. The principle that you don't go back and do things retroactively is a very important liberal principle so some of the things that the Bush administration let them do we can then undo. We can prevent them from going forward and this I can guarantee you.
We will very soon be adopting a set of regulations. We're going to be doing essentially now what Franklin Roosevelt had to do in the New Deal, what Theodore Roosevelt and Woodrow Wilson had to do around the turn of the last century. There is a whole lot of new financial activity that's going on and it's caused some damage and done some good, but it's gone on without rules and the one thing I am most confident about is we know how to stop this from happening again. Banning the bad subprime loans. Restricting the excessive kinds of leverage they've had.
Yeah, this is a very high priority for us and I think by the summer we're going to have a set of rules in place. It's going to be comparable I think to what FDR did with the New Deal, with the Securities and Exchange Commission and other rules. We will not depend on their good will. We will put some tough rules in place.
All I can say is I hope he means it, and that he follows through on what he said tonight. I don't know much about economics. It frankly bored me and was just never something I took an interest in. But I'm not a stupid person and I know after watching the 60 Minutes segment A Look at Wall Street's Shadow Market that if we didn't do something to regulate Wall Street that nothing was going to improve in our economy because there would be no trust of our current system.
I make that assumption because I don't trust it now and I'm probably like a lot of other people out there who thought they were spreading their risks in their 401(K)s, if you were lucky enough to have one, and watched it tank by close to forty percent over the last year. For anyone close to retirement age like a lot of my co-workers, those sort of losses are just devastating. You think you're doing the right thing and trying to prepare for retirement and poof, years and years of savings just vanished in a matter of a few weeks or sometimes a few days. I watched friends walking around in what was close to a state of shock when the market crashed.
So I welcome Barney Frank's talk of regulating these markets. I think it's overdue, and this summer could not come fast enough if that's when they try to get it through. For contrast, here's your standard talking head on the "news" saying 'thank goodness Tim Geithner didn't come out with any crazy talk about regulating this mess'. Yeah, that's the ticket, Joe Johns. Forget any regulation that might stop these industries from continuing to cook their books and leverage themselves in a way that would put a regulated insurance company out of business.