Bloomberg has a peice out called, Rubin Failure on Swaps Dims Odds Obama Will Rein In Wall Street that speculates about incoming President Obama's possible response to the ongoing financial crisis. Obama's association with Clinton administration veterans and deregulation advocates like Larry Summers and Robert Rubin along with large donations from the financial section may signal a less sweeping reform of financial regulation than is justified by the situation.
As the president-elect faces a once-in-a-century opportunity to remake the regulatory apparatus governing Wall Street, some of Obama’s fellow Democrats and investor groups are urging him to bring sweeping changes to banks, hedge funds and executive pay. His closest economic advisers, men like Robert Rubin, Lawrence Summers and Paul Volcker, may recommend otherwise: go slow. If Obama takes their counsel, the 44th president, who succeeds Bush on Jan. 20, may not clamp down all that hard on a financial industry whose excesses have pushed the nation -- and much of the world -- into a recession.
A lot of the blame for the financial crisis lies with deregulation that started under Reagan and continued unabated through the Clinton and Bush years. Glass-Steagall Act was repealed by Gramm-Leach-Bliley under Clinton. Let's hope that one of the results of this crisis is a more secure firewall between risky financial experiments and the day-to-day banking that the whole economy depends on.
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