An Open Letter to President-Elect Barack Obama: How a Regulatory Makeover Can Fix the Financial Crisis

Shah, thank you for your thought provoking article. If we are lucky people with the ability to do something about our situation will read it.
One item I did not see has to do with Insurance. I seems to me that investors believed that AIG was 'insuring' the various morgage backed securities, but in fact were not placing any where near an appropriate amount in reserves. Where is the insurance industry in all this?

John

FOFL

You said "With the mandate of the people you (meaning the Messiah – Barrack Hussain Obama) have an opportunity to override the self interest of entrenched politicians, the inordinate influence of lobbyists and the disturbing greed of vested interests. The old walls of crony capitalism are held together by self-serving, self-policing and self-destructive regulatory bodies."

Never happen, he is one of them.

As to your plan, it is just rearranging deck chairs on the Titanic.

Thanks for the comic relief!

Dear Mr. Gilani
I appreciate your efforts to contribute to the recovery of our gravely wounded nation. I hope you send your ideas directly to the President-elect. I’d like to believe he’d appreciate them.

Don’t be deterred by people who toss meaningless epithets like “Marxist/Socialist” at ideas they don’t agree with. The only raison d’etre for governments is to govern and regulate. The best and fairest governments strike a delicate balance between too much and too little regulation. Your ideas are obviously designed to achieve that balance.

We saw what happens when a government doesn’t regulate at all. The wolves came out and had a feast in the marketplace. There’s nothing “free” about that kind of market.

De-regulation has nothing to do with the U.S. financial crisis.
The CRISIS is simply the ‘predicted’ outcome of a central bank (the fed) controlling a fractional reserve system.
It is without doubt the greatest Ponzi scheme of all time.

Basically the private bankers create money from nothing, loan it out, and collect interest in perpetuity, (power granted to them by the Federal Reserve Act of 1913).

Don’t be a fool and believe that the Federal Reserve is actually Federal or that it has any Reserves!

The crisis will continue in divergent up and down cycles until we reach the point of hyper-inflation and a total disintegration of the dollar. This has happened to other countries in the past, it is doomed to happen to the U.S.

Of course this could all be stopped by right now by replacing the federal reserve notes (dollars) with with real money (money that is backed by gold). Followed up with the U.S. Congress repealing the Federal Reserve act of 1913.

Most people are not even aware that the Federal Reserve is privately owned!
These owners collect most of the interest off the U.S. national debt, which is currently $1 billion dollars a day!
The interest is paid to the Rockafeller’s, the Morgan’s, the Bank of Spain, the Bank of Israel, the Rothchild’s, the Kennedy’s, the Getty’s, etc…. It’s no wonder they stay wealthy for generations!)

Get active! Learn and understand the real problem:
–> The Federal Reserve &
–> Fractional Reserve Banking.

Interesting ideas, but is more bureaucracy really the answer?

What a load of Bullshit. Greed will once again reign once everything gets better. History will show this time and time again. So much for so called transparancy. You will never get it. Remember the President of the USA is only a puppet, nothing more nothing less!!

It was 9/11. I can tell everyone I've never witnessed anything more disgusting. I remember that sentiment well, and reckoned I'll never have the chance to revisit it in my lifetime… at least, not in a very long time.

Apparently, I was wrong… Merely 7 short years! And the fact that something as shameless as this so-called 'crisis,' can spout from the 'mecca of world-class management' — rather than some corrupt third-world syndicate — makes it all the more appalling.

One can argue that the crimes of 9/11 was connoted by morbid ideology. But such 'Economic Crimes Against Humanity,' as these 'elites of the civilized world' brought forth, can only be attributed to quintessential — and abysmal — Greed And Self-aggrandizement. To them, morality may not even have a place in their toilets, unless it got stuck in there somehow!

Yet, unlike 9/11, nobody in a position to call the shots had, so far, uttered one decent word about giving these 'elites' what they truly deserve.

Could it be because this thing reaches all the way to the very top — to those deemed untouchable, and too numerous to contend with?

This still-unfolding mess is huge, to be sure. As for the enormity of connivance… Readers, judge for yourselves. Personally, I'd say — What Chamberlain, Gamelin, Hitler, Himmler, and Stalin were to political history, these 'elites' should be to financial history.

Perhaps 'Devils-in-Disguise' are Real, and from this point onwards, the phrase 'Crisis of Confidence' should be reappraised in a 'new-and-improved' context.

Sad… Chilly too!

Regulations have their place, just don't forget: Rules Are Made To Be Broken.

The crux of the matter: Moral Fibre!

… How do you regulate that?

I can not imagine the vitriol that this writing has evoked, but the vitriol is self demeaning, thus future comments from those individuals are only worthy in the process of developing a list of those who should be ignored.

Some regulation would help but it is not the solution. The real problem is a Government engineered and subsidized Positive Feedback Ponzi Scheme. Every time there was corrective Negative Feedback, Bush and our so called leadership made changes to keep the party going.

A more certain plan would be an Immigration Moratorium or reduction to about 100K people a year until we are back to at least normal employment, have a path to energy independence, and ideally have a national population plan in place to understand what the constraints actually are in terms of energy, ecology, and the economy.

Right now the wages of low end workers are stagnant and have been for some years due to the massive illegal and legal immigration we have received. If we stop creating Upton Sinclair's "The Jungle" on a national scale and make a firm and declared policy of taking care of our own citizens as our first priority, CONFIDENCE in the future would skyrocket, wage earners at the lower end would see their wages rise (or at the very least see improved job prospects). That would stop the increase in foreclosures and stabilize the housing market, thus freeing the economy. Tax receipts would be up while liabilities like unemployment and welfare would go down.

President Obama will spend trillions to create or recapture about 3 million jobs (over $250K for each job). My plan of an immigration moratoium (or reduction to 100K per year) from over a million a year would recapture those 3 million jobs in Obama's first term at NO COST to the government/taxpayers.
Acting with determination on illegal immigration and encouraging illegals to leave with a carrot/stick approach would save several million more jobs. In addition to the positive effects of more employed Americans paying taxes and keeping their homes, the liabilities imposed by our massive and excessive immigration would drop and provide a double action to help the economy. We would not need new infrastructure just to keep up and the need for services such as health care, education, and police would drop markedly. Taxes could stabalize or be reduced as well, further boosting the economy. Money could be spent refurbishing our existing infrastructure (which has not been happening) and put into improving education, better reimbursed health care, less crowded jails and better kept police and fire departments.

If we do not take the Immigration reduction approach, every job that is created by Obama's plan will be needed just to keep up with immigration. We will never catch up! The Immigration Moratorium provides the corrective feedback needed to pull us out of recession as well as give long term confidence, especially to our lower end workers.

The new President is focusing on all of the important isues,
however, i believe there is one that needs to be looked at. Knowing that the banks are declining to disclose where the billions of tax payer dollers' went, that was given to them to help the foreclorsure crisis, this admistration should now require that all loans are to be a fixed rate loan and no more adjustable loans which means the credit agencies needs to be overhauled whereby people applying for loans' can qualify and have rates that they afford to pay without the fear of what we are now experiencing.

NOTE TO MONEY MORNING PUBLISHERS ONLY RE: ACCURACY OF TEXT

FYI, see your "Louisiana" listing and please note that Cazayoux is no longer in Congress. He was replaced in a runoff by William "Bill" Cassidy, R-La. Sorry I cannot provide a fax.

Thank you for doing this, we need more of it in this country.

Gilani is spot on. Wall STreet has toiled for years to siphon off billions of dollars to line greedy pockets. That surely is pure capitalism. Capitalism, however is prone to excess on the upside and downside. We take away a solid regulatory structure and tell these guys to self regulate. Kind of like turning a pedophile loose in an amusement park. You know what is going to happen. Wake up folks!