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Posts Tagged ‘SEC

Just Say No…To Mary Miller to Head the SEC

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Mary Schapiro, the current Securities and Exchange Commission Chairman, has resigned her position, effective on December 14. President Obama has nominated Mary J Miller to replace Shapiro. However, it appears Ms. Miller does not have the qualifications for this top cop position.

Simon Johnson, over at baselinescenario.com, explains Ms. Miller’s credentials:

The Obama administration is floating the idea that Mary J. Miller, under secretary for domestic finance at the Treasury Department, could become its nominee to lead the Securities and Exchange Commission. Ms. Miller, a longtime executive in the mutual funds industry, has served in the Treasury under Timothy Geithner since February 2010.

Ms. Miller represents the financial sector’s preferred approach to financial reform – some rhetoric but very little by way of serious effort. She has no time for people who are serious about making the financial system safer. And there is no willingness to really face down powerful people on Wall Street.[…]

She has no experience as a regulator or as an enforcer of the law. She has never worked on securities fraud. And she has no track record of standing up to powerful vested interests; in fact, she helped push the recent JOBS Act, which greatly undermine the protections available to investors. In addition, her work experience is entirely within the mutual fund industry – 26 years at T. Rowe Price. And a major agenda item now for the S.E.C. is mutual funds and how to make them less vulnerable to the kind of runs that occurred in September 2008. (For a primer, please see my recent column for Yahoo Finance.)

The mutual-fund industry does not want reform, and it worked long and hard to keep Mary Schapiro, the departing S.E.C. chairwoman, from pushing forward some sensible ideas. After outside pressure was brought to bear, including by Ms. Bair’s systemic risk council (of which I am a member), there are signs that the S.E.C. will finally at least issue some proposed changes for public comment.

After the 2007-2008 financial meltdown, we need the best cop to clean up the Street. And there are much better candidates for this top, vitally important position, namely Neil Barofsky, former Senator Ted Kaufman of Delaware, Dennis Kelleher of Better Markets, and Sheila Bair, formerly head of the FDIC.

Credo Action has created an online petition urging President Obama to appoint an S.E.C. chairman who will hold Wall Street accountable, and naming Mr. Barofsky as a worthy choice. The petition had more than 35,000 signatures by Wednesday morning. I urge you to sign the petition so we get the best SEC cop available…and not another Wall St sympathizer.

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Written by Valerie Curl

November 28, 2012 at 9:09 PM

Nationalizing U.S. Banks?

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Many on the far left advocate nationalizing banks as a way to control the bleeding of tax payer dollars and prevent bad actors, like John Thain, from taking advantage of the taxpayer. However, it is an extremely bad idea for the Fed. government to nationalize banks for two very good reasons.

First, the American populace still believes in the market system. Unlike Europe which has flirted with socialist tendencies over the last 60 years, the U.S. has remained firmly rooted in an economic, business model that is devoid of too much intrusion into markets. Teddy Roosevelt was the first President to interfere with the total free market capitalism that existed in this country by creating legal rules and regulations on how industry could behave. But even he refused to take over any business because he realized that regardless of how badly some businesses behaved, i.e. the railroads and allied industries, it was essential to the American economy that businesses be allowed to grow or die according to market forces.

Unfortunately, we are in a position now where too many banks have been allowed to grow too big. If those banks fail, like Citigroup – a conglomerate forged following Gramm’s change in the law, with approval under the Clinton Admin. watch – the taxpayers of the U.S. will lose billions, if not trillions, of dollars. Arguably, banks of this size should never have been allowed to exist, and certainly their exposure to huge leverages were a failing of the regulatory agencies, in particular the SEC.

Nevertheless, for the Fed government to take over the banks would be a huge mistake on the part of the Fed government. To do so would ruin the financial sector of the stock market and prevent its comeback.

Second, such a move would spell the death-knell of the Obama Administration. Because there would be an enormous outcry from voters from one of the country to the other, the new Administration would be finished before it began. Not only would Republicans flood the media with partisan releases about Obama-style socialism, such as never before seen, the American populace would revolt at the ballot boxes. America prizes its illusion of free markets.

The far left needs to forget the idea of nationalizing banks and focus on how to resolve the problems created by the myriad of toxic paper that exists within the banking system without destroying the banks, further disrupting an already deeply fragile economy, or assuming a taxpayer debt that might never be recovered.

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