By Nomi Prins, Mother Jones
Posted on June 19, 2009, Printed on June 19, 2009
http://www.alternet.org/story/140770/
On Wednesday, after weeks of the requisite press leaks and prefabricated spin, the Obama administration released details of its new "rules of the road" financial regulations, which had been billed as the most sweeping overhaul of the financial system since the Great Depression.
Obama, alas, is no FDR. Roosevelt's New Deal reforms included the Glass-Steagall Act of 1933, which split complex financial institutions into commercial banks (for consumers) and investment banks (for speculators). This enabled government to safeguard the boring, conventional activities of consumer banking without insuring the dice-rolls of high-risk investors. His reforms also opened the banking sector to independent audits to ensure financial soundness -- as opposed to just taking the banks' word for it, as Treasury Secretary Tim Geithner's recent stress tests effectively did -- and established the Home Owners' Loan Corporation, which helped people at risk of foreclosure cover their mortgages.
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