Regulatory Reform Is Wishful Thinking

Sorry for not posting all of last week - I was extremely busy. I'll attempt to make up for it here with some worthwhile reading, though I still have some posts with content I want to do. Hopefully, I'll get to them sometime soon.
As usual, in quotes below, any emphasis in bold is mine.

• An excellent read on the history of the Fed and why it perpetuates our boom-and-bust cycle: "We have seen this spectacle--the Fed saving us from one crisis only to instigate another--many times before. ... The fault, to be sure, doesn’t lie entirely with the Fed. Bernanke is a prisoner of a financial system with serious built-in flaws. The decisions he made during the recent crisis weren’t necessarily the wrong decisions; indeed, they were, in many respects, the decisions he had to make. But these decisions, however necessary in the moment, are almost guaranteed to hurt our economy in the long run--which, in turn, means that more necessary but harmful measures will be needed in the future. It is a debilitating, vicious cycle."
  
• Serious doubts we'll see any useful reform: "Let's be clear: The Street today is up to the same tricks it was playing before its near-death experience. Derivatives, derivatives of derivatives, fancy-dance trading schemes, high-risk bets. "Our model really never changed, we’ve said very consistently that our business model remained the same,” says Goldman Sach's chief financial officer...The only difference now is that the Street's biggest banks know for sure they'll be bailed out by the federal government if their bets turn sour -- which means even bigger bets and bigger bucks."
• More doubts. This article has a real gem in the conclusion: "One solution ...: break up big banks. Citigroup is splitting itself up after years of empire building that created a company many considered to unwieldy to manage effectively. But that won't really fix things. Lehman was far from the biggest Wall Street bank, in fact it was the smallest of the big four still standing after the collapse of another relatively small firm, Bear Stearns, in March. Interconnectedness was the problem. And in our increasingly sophisticated and complex global financial system, it still is. How to eliminate that risk? This may be tough to swallow, but the truth is that you can't."
  
• An argument against making GDP too important in measuring societal well-being. This is a point I've debated before (not on this blog as of yet). I think there's been a problem over the past few decades in that we've come to view economic growth as the end instead of the means. Keep in mind that GDP growth is really supposed to be a way of improving quality of life; in other words, a means to an end. However, recently, we've been so wrapped up in maximizing growth and GDP and profit margins and whatnot, that *that* has become the end. The article suggests that had we paid more attention to indicators like median income, we would have had a better measure of societal well-being and things might not have looked so (artificially) rosy during the bubbles.
• As mentioned before, banks too big to fail are even bigger.
• BoA may not get off so easy after all!
• Krugman defending himself from criticism of his article. As mentioned before, I strongly encourage everyone to read his piece.
• Funny stuff.