Barack Obama went on the business talk show The View to talk about how banks need more stringent regulations on trading activities in light of trading losses at JP Morgan.
Reports Reuters:
"JPMorgan is one of the best managed banks there is. Jamie Dimon, the head of it, is one of the smartest bankers we got and they still lost $2 billion and counting," Obama said on ABC's "The View," according to a transcript released by the network.
"We don't know all the details. It's going to be investigated, but this is why we passed Wall Street reform," Obama said.
Well then I guess Obama’s version of Wall Street reform apparently isn’t working by Obama’s own working definition.
Maybe the coffee klatch ladies at The View can help us formulate better bank regs.
The can hardly do worse than Obama and the Democrats have done by passing Dodd-Frank- the most expensive legislation in the history of Main Street, after Obamacare.
So what exactly has Obama’s signature Wall Street reform package, Dodd-Frank done?
Supposedly it was passed to curb abuses in origination of consumer mortgages.
But more importantly, it was passed to make sure that a bank failure did not involve the risk of failure in the entire financial system so that the government wouldn’t have to bail out the banks again.
But as Obama himself admits, the Wall Street reform package that Democrats passed, and Obama signed, doesn’t do that.
"This is the best, or one of the best managed banks. You could have a bank that isn't as strong, isn't as profitable making those same bets and we (the government) might have had to step in," Obama said according to Reuters.
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Even for a president, Obama’s a pretty shoddy economist- and that’s a pretty startling admission.
Because while Wall Street reform that Obama talks about might be the most expensive legislation ever passed after Obamacare, it doesn’t even begin to address the issue of systemic failure in the banking industry- the very issue Wall Street reform was supposed to address. .
In fact, because the federal government under Obama concentrated more assets in fewer banks through forcing banks like Bank of America to buy toxic assets like those from Countrywide Mortgage rather than allowing the market to do its proper job, bank failures have likely been postponed rather than averted.
And to add insult to injury, the Obama administration then turned around and sued Bank of America for the mortgage practices of Countrywide, the very company the administration forced BofA to buy.
To put the JP Morgan affair in proper context, he’s a clip from our bank expert Mark Calabria from Cato.
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