I was thinking that too!

"The two men wrote that the plan would point to the need for deeper cash reserves at major financial institutions."

This type of regulation was practiced before the bubble. Unfortunately, the SEC changed this and allowed certain financial institutions to increase their debt-to-asset ratio to as high as 50-to-1. Most who have read my posts regarding the crisis are aware that I assign much blame to the SEC for that asinine decision. Anyway, I will wait for the official unveiling before I assess the proposals. 

I think the way that the financial industry has acted in the past 5-10 years can really be described as unethical. Because it has the possibility to cause so much harm and the fact that people are not qualified often to judge whether they are being screwed or not is the reason why people have to be protected. There really is a problem of asyncronous information between the consumers of financial services and the providers of such services. Its the same reason why other industries are regulated because the market cannot function as efficiently without it.

"Too big to fail" is just a phrase that is used to defend companies and industries which have close ties to political parties, and other large companies and industries that are not lucky enough to have this distinction (say Exxon Mobile and the oil industry in general) can risk being put out of buisness without any political help.

Now, just as a question, being that the financial institutions have used their political power to get the government to ignore or change any regulations that stood in their way what makes you think that anything they do today will actually "protect" consumers? Being that Obama is very close to the architects of this mess, what makes you think that these changes will benefit consumers and not financial institutions?

I think it's possible to protect both, if a system can be constructed which prevents the formation of bubbles, or at least limits the size and severity of bubbles.

The consumers who were sold mortgages which they couldn't afford to make payments on aren't the only victims here. When they defaulted and their homes were put up on the market, the glut of supply dropped the bottom out of the real estate market. At that point, a lot of home owners who were perfectly capable of making payments found themselves with mortgages that exceeded the value of their new homes. Some accept the rotten deal because they want the house, but others mail their keys into the bank and just walk away. Now even responsible borrowers and lenders get burned by the bubble.

If you can stop the bubble, the responsible borrowers get to keep their house as a worthy investment, and the bank gets a loan repaid with interest, instead of a severely devalued house.

The consumers who were sold mortgages which they couldn't afford to make payments on aren't the only victims because they're not the victims, and they have earned the consequences of their ignorance and greed ... The real (and only) victims of this entire affair and the honest and hardworking individuals who lived below their means, avoided the lure of easy money and didn't rack up large debts they couldn't afford, and now they are the ones who are stuck with the bill for other people's excess. Why should the responsible people who lived without in order to have a better future for themself, continue to live without so that other people can continue to live the life of excess that they didn't work for?

Why can't we let Moral Hazzard protect consumers by ensuring that every person who is looking to get a mortgage is warned by everyone they know that financial institutions will make offers that sound too good to be true because they are.

Wow, the sheer amount of misunderstanding and misinformation in this thread is truly shocking.  Kudos, Mafoo, for topping even your own borderline lunatic ravings.

The last two times you have entered one of these threads of mine, you just attacked me and skipped the point. Is it getting increasingly hard to defend Obama?

Like HappySqurriel said, there is no such thing as a company to big to fail, and if there was, that's what the bankruptcy courts are for. This kind of stunt is nothing more then people in power grabbing more power.

If anyone thinks that's good for the people, there fucking idiots.

Then you obviously weren't paying attention.

Look, say what you want, but once the "government" gets it's nose under the tent, the rest of the camel follows very quickly. That is why "therealmafoo" is hyping this up a little more, it wouldn't hurt some of you people to look for more common sense.

@mafoo I appreciate you posting all this stuff up. You seem like a smart person...when you gonna start a talk show? 

lol, thanks. I think HappySqurriel would do a better job though.

I like to think of myself as someone who understands what's right and what's wrong. I recognize that when you force people to work in the service of others, your enslaving them, and that's wrong.

I recognize when somethings wrong, but don't always do the best job of presenting my arguments. HappySqurriel always does however. If he had a blog somewhere, I would read it.

On the subject of a talk show... it's sad really that no one has a talk show with these views. It's either something from the right who want to take your liberties, or someone from the left who wants to take your liberties. Where is my voice?

I mean my views are the same as the great men who started this country. Why are they so rare today?