When There Are No Rules Left

The Road To Deregulation Has Led To Chaos On Wall Street, Says Bob Schieffer

(CBS)  Weekly commentary by CBS Evening News chief Washington correspondent and Face the Nation host Bob Schieffer.

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Here is the part that bothers me about what's happened to our nation's finances, and we heard it underlined this morning by our guests:

This is not the work of those who broke the law. It is the work of those operating within the law, those who pushed the law to the limit, making loans the law allowed but common sense dictated should not have been made.

Through Democratic and Republican administrations, deregulation has become all the rage - Sweep away the cumbersome rules that make it hard to do business. A worthy goal for the most part, but as we're finding out, we have allowed deregulation to the point that in some cases the only rule left standing is that "anything goes."

And now we must all pay.

I hope this administration's rescue plan is the right way to go. Frankly, I don't have the technical expertise to be sure.

What I do know is that if we somehow get past this, we must get serious about laws that ensure it never happens again.

Our financial system has come to resemble a ball game where the umpires let the players call the balls and strikes.

In the debate over how much government our new nation needed, one of the founders, James Madison, said, "If men were angels, there would be no need for any laws, much less government."

Our free market system remains the best system ever devised, but we're still not angels.

Besides, no game works without an umpire.

[chrisbieber]

yet another serving up of the utter LIE of America having a "free market".

Schieffer AND THE POSTERS HERE think that we have and have had free market here in the US and "the free market" has "failed".

Just open up your Govt page in the phonebook, look at your mortgage for your house/title on your car/govt school liability waivers, your medical insurance forms, your tax bill and THE TRILLIONS OF YOUR TAXDOLLARS already committed to pay for the US "free market".

Never had it, and with the socialist conditioning of Americans demanding Bread and Circuses like in the Roman Empire and the 2 approved prosocialist parties candidates NOT willing to stop the looting AND enslavement by the FedGov and the PRIVATE "Federal" Reserve, there appears to be NO chance of stopping the US Train from hurtling of the tracks into chaos and horror.

The bipartisan charade of "difference" continues...

[gkarlives]

I do feel that all of the fat cats of the bailed out businesses should be made to pay back the money they earned during their tenures since it is their fault this happened deregulation issues asside. They took big risks with our money and lost. They were either acting fraudulently or were criminally negligent. This race to make the most money without actually working for it is a sickness that has done us in time and again. In my book that means no golden parachute.

[gkarlives]

I agree with a lot of you that the money could have been spent a hell of a lot better, but a lot of you are not seeing why this is being done. It sucks, but if the big guys go down, they are taking a hell of a lot of little guys with them. That is how a Republican economy works. If this is not taken care of (properly is important) there will be a lot of unemployed people defaulting on more loans. This is a snowball situation unfortunately. We won''t have time to do those things you want because there will be total chaos.

[karela33]

What would happen if we took the same trillion dollars and used it to create jobs by rebuilding our bridges, roads, sewer systems, water systems and power grids. Further, what if we also went after solar and wind energy fast and hard. A trillion dollars will go into the gaping maw of Wall Street and it will be gone. A trillion dollars spent creating jobs by rebuilding America will yield many things: A better economy because millions of people will have more money to spend; an increased tax base as they earn and pay taxes; an update of our desperately aging infrastructure; a decrease in our dependence on foreign oil; a strong move toward energy independence; a strong move toward helping global warming by decreasing pollution; building something real by the work of real Americans instead of pouring money into a greedy market. How about if this time we build the economy by putting Joe six pack back to work. He''ll do his part with the sweat of his brow and then he''ll pump up the economy by buying a new frig to put the beer in. I think it will pay better dividends to America. Build the economy from the bottom up on the backs of Americans working at good jobs that can''t be outsourced and we''ll have more of a future. The other way may not work or it may cost more. Either way we''d be saddled with crippling debt. This way we''d have a new infrastructure and more energy and more jobs.

[samthetvcat]

PS Or better phrased - how are you going to make your case against further deregulation to Republicans the next time they take control of Washington?

Clearly something''s not working if Dems couldn''t prevent it from happening the last time.

[samthetvcat]

Posted by rmonroe401

The Dem Congress has had 3 years to change it - if the ''right'' course of action was so clear to them then why didn''t they pursue it? I''m not placing the blame, I''m questioning whether political philosophy is appearing after the fact as true ''wisdom'' to people who subscribe to that particular philosophy.

The difference being that somebody who''s got true wisdom would have on the floor of Congress been able to articulate the pros and cons of maintaining regulation or repealing it. A pack of politicians on both sides of the aisle who just have philosophy leave us all vulnerable to repeating this self-defeating cycle.

Maybe the old law was obsolete and needed updating - investment and commercial banks can join up, but with a greater wall between the two and a conflict-of-interest overseer appointed by government.

Sarbanes-Oxley''ll likely get modified the first chance Repubs get unless we as a group don''t find a bipartisan approach.

[rmonroe401]

OHHHHHH, Bob must be talking about Hollings. Its all clear now
Gramm-Leach-Bliley Financial Services Modernization Act.
53 Republican Senators plus one Democrat - AYE

44 Democrats no Republicans - NAY

1 Democrat voted AYE Hollings(SC)

[rmonroe401]

Hey Bob,

I didn''t realize Democrats support banking de-regulation. Where do you get your info from, and can we see it? Thats quite the claim, but then again, you don''t want to make your buddy McCain look bad at this critical juncture. So I guess in that respect, you had to lump Democrats in the mix. Good job Bob of un-biased journalism.

[urnot]

Schieffer just could not resist placing "equal blame" on Democrats. He is a SELF-DESCRIBED FRIEND and SUPPORTER OF McCAIN.

It''''s just too much to ask that Schieffer ever criticize McCain and his ideologically similar Republican ANTI-REGULATION fanatics.

However, Schieffer placing even equal blame on mcCain is instructive. it means that McCain is so deeply involved in this that even Schieffer could not simply dismiss his complicity in the Wall Street mess.

Posted by dburfears at 06:37 PM : Sep 22, 2008
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I completely agree. This is cover fire for McCain.

[ofbyfor2]

Bob Schieffer is dead wrong in saying "This is not the work of those who broke the law."
Posted by markjmalone at 02:51 PM : Sep 21, 2008

He''s not saying that. He says that he is very bothered by the fact that other people are saying that.

Basically he is saying that we removed so much regulation and oversight that we essentially had few, if any, rules left and the oversight was so minimal as to be meaningless.

I agree. Corporations cannot be trusted to police their own actions. That''s just the fox guarding the henhouse.

The fox steals all the eggs (nest eggs?), kills half the chickens, then complains that he''s having to go hungry. So the hens have to give him more? No thanks.

[gkarlives]

I just read an article on Bill Clintons part in the subprime bubble. Yes, I do beleive the democrats bear part of the blame too. Too often they love to set up these grand programs but fail to monitor them and act appropriately when necessarry.

This is a huge part of the Washington culture. Neither party is willing to admit that they can make mistakes and stand up and do what is appropriate. They can censor each other, but not themselves. I want to hear one of our canidates admit that mistakes were made on both sides. Greed of both Republicans and Democrats alike.

However, I don''t beleive that no government intervention is the way to go either. Government needs to monitor business, we need to monitor government.

[gkarlives]

When a business owner wants to complain about the regulations, they shouldn''t look to the Government as the problem but to their fellow business owners.

Fool me once my mistake (The Great Depression)
Fool me twice your fault (S&L bailout)
Fool me three times, I must be incredibly stupid (Sub-Prime bailout).

[gkarlives]

When a business owner wants to complain about the regulations, they shouldn''t look to the Government as the problem but to their fellow business owners.

Fool me once my mistake (The Great Depression)
Fool me twice your fault (S&L bailout)
Fool me three times, I must be incredibly stupid (Sub-Prime bailout).

[gkarlives]

It is a fine line to walk. Good regulation will allow for adjustment and be designed to withstand the political whims of the time. Of course, that is as a nation we demand it. We have to stand up and demand that this become a governmental mandate. Such a mandate got us to the moon. The whole nation has to get behind the change. And I am sorry, but life may be tough for some businesses but the PATRIOTIC ones will work through it. This is the cost to us all because a few (many) got greedy and pusshed the limits.

[samthetvcat]

pt 1

I commented a couple of days ago about how while the dangers of underregulation are so keenly being felt right now, there are dangers to overregulation too.

Like in the wake of the Enron accounting scandal, Dems enacted sweeping oversight that''s apparently so costly to for companies to abide by that new companies are all choosing to offer their stock to the public in England instead of here. If London with their regulatory system is seen as preferable and if they aren''t experiencing economic meltdowns as a result of their regulatory structure being underregulatory, then wouldn''t that tend to imply that our regulatory structure is overly burdensome and costing us opportunities for growth?

[samthetvcat]

pt 2

The ideal regulator would know precisely what''s needed to prevent the bad without stifling the good - not sure this kind of back and forth about regulatory and deregulation ''purity'' really gives us clarity of insight? Because what''s going to happen even if Dems win the next election, enact sweeping reforms, and then Repubs win the Presidency and take over Congress 4 years after that?

Allowing investment banks to also run commercial banks improved efficiency, but did it also create a conflict of interest? Was that a red flag that they were relying on an industry within their sphere of control to pump up their profits? Was there anybody who at the time it was happening try to sound the alarm?

GOP are greedy and too wed to the idea of deregulation, but do the Dems really appreciate the merits of regulation at a time when it would make a difference or only after the fact?

Like somebody who''s got an eye for the need for regulation AT THE TIME it''s needed is the true measure of somebody with regulatory accuracy, isn''t that more accurate to say? Maybe we as a group would be better served to focus more on getting to that level of insight (?)

[gkarlives]

Pound it home. I don''t know how. Unfortunatedly I am the thinker not the doer. I stress to easily, but I get so sick of how sidetracked everyone gets. What I want to see is a candidate that stands up and says "There is no bandaid. This is going to hurt a lot, but I am in this with you and I will try to minimize your pain.

[gkarlives]

I beleive that totally free enterprise/democracy is a dangerous beast to be let loose. It is voracious and very short sighted. The governments job is to tame the beast so that it can pull the cart and not eat the citizens. So far it is devouring the country.

One last thing I would like to note that I missed because size constraint is that no one is making much talk about Mccains connection to the Keating 5 and his poor choices then.

[gkarlives]

I think that is why we fail. We always asume the best and don''t work hard enough to overcome. We write a law and think that will take care of that. Sorry. The price of Democracy is eternal vigilance. We have to assume some slick lawyer of Wall Street exec. is going to find a way around it and plan how to counter. Not unlike dealing with computer viruses. There will always be a new one tomorrow. One kind of Human nature. The people that make the anti-virus are the other kind.

[gkarlives]

Actually, I had read about that too, but they need updating anyway to cope with the way information passes so freely across borders and instituion. Those laws and the few around during the S&L problem were no match for modern technology. Plus I feel that they need serious teeth in them to deter. The Credit industry as a whole is overdue for a dose of reality.