Make Real News!

100K Challenge!

$26,354 raised so farEND DATE: October 3   
Every dollar you donate will be matched until we reach our 100K goal!
  • Latest News
  • Pitch a Story
  • Work with a Journalist
  • Join the Blog Squad
  • Afghanistan
  • Africa
  • Asia
  • Baltimore
  • Canada
  • Egypt
  • Europe
  • Latin America
  • Middle East
  • Russia
  • Economy
  • Environment
  • Health Care
  • Military
  • Occupy
  • Organize This
  • Reality Asserts Itself
  • US Politics
  • Wall Street Eager to See Larry Summers Nominated Fed Chair


    Summers likely to be next Fed chair not despite failures but because of them -   September 2, 13
    Members don't see ads. If you are a member, and you're seeing this appeal, click here


    Audio

      Share to Twitter
    Share to Facebook




    I support The Real News Network because I am tired of lies and biased journalism. Long live TRNN! - Roberto
    Log in and tell us why you support TRNN

    Bio

    Robert Pollin is professor of economics at the University of Massachusetts Amherst. He is the founding co-director of the Political Economy Research Institute (PERI). His research centers on macroeconomics, conditions for low-wage workers in the US and globally, the analysis of financial markets, and the economics of building a clean-energy economy in the US. His latest book is Back to Full Employment. Other books include A Measure of Fairness: The Economics of Living Wages and Minimum Wages in the United States and Contours of Descent: US Economic Fractures and the Landscape of Global Austerity.

    Transcript

    Wall Street Eager to See Larry Summers Nominated Fed ChairJESSICA DESVARIEUX, TRNN PRODUCER: Welcome to The Real News Network. I'm Jessica Desvarieux in Baltimore.

    There's a lot of talk about who President Obama will nominate as the new chair of the Federal Reserve. CNBC is reporting that he will choose Larry Summers. And the other possible option is Janet Yellen, who is now second in command at the Fed. At the same time, the president is also pushing for new financial regulations as a part of the Dodd-Frank act.

    Now joining us to discuss all this is Bob Pollin. Bob is the founder and codirector of the PERI institute at the University of Massachusetts Amherst. And he's also a regular contributor to The Real News.

    Thanks for joining us, Bob.

    PROF. ROBERT POLLIN, CODIRECTOR, POLITICAL ECONOMY RESEARCH INSTITUTE: Thank you very much for having me on, Jessica.

    DESVARIEUX: So, Bob, can you give us a bit of a breakdown about the implementation process of the Dodd-Frank Act? I think most people, most of our viewers know that in 2010 it was passed, and they think that things are being implemented already. Are regulators really designing new rules, or simply trying to implement Dodd-Frank?

    POLLIN: Dodd-Frank was passed in June 2010. So that was the major financial regulatory law that was passed in response to the 2007-2009 financial crisis. In the years prior to the passage of Dodd-Frank and prior to the financial crisis, basically the mode of operation was deregulate finance, because Wall Street knows better than--they're smarter than everybody, they know best, we don't need to regulate them. Well, we only had to have this massive historic financial crisis to prove that approach wrong. And the consequence was the passage of Dodd-Frank in 2010.

    The problem with Dodd-Frank was that it really set out very general guidelines as to how to regulate the financial markets and left it to the specific agencies in Washington to lay out the specific rules. Now, as of this past week, a report that I read said that 60 percent of the deadlines for rulemaking have not been met. The rules have basically not been written, even though we now have 13,000 pages of documents in which rules are being specified. But we haven't even gotten to the endpoint.

    So the story as to what Dodd-Frank really means, what we really intend to do with respect to regulating finance to make our economy more stable and to prevent another crisis comparable to the devastating great recession that we've been through, we don't have the tools in place yet, even though Congress actually did pass something over three years ago.

    DESVARIEUX: Okay. So is the regulatory process at all related to the nomination of Summers?

    POLLIN: I think it is. And here's the reason. Larry Summers was a crucial figure in the late 1990s at the end of the Bill Clinton administration supporting the repeal of the financial regulatory system that we had in place, the Glass-Steagall system that was created in the wake of the 1930s depression, the last massive economic crisis. We did put in place a financial regulatory system that was reasonably effective.

    Now, over time, of course, Wall Street and others lobbied against this year after year after year. But it took a Democratic president, a Democratic administration, Clinton, to pass a law to repeal the previous regulatory law. And who was Treasury Secretary of the United States at the time of the repeal of Glass-Steagall? Treasury Secretary Larry Summers.

    And Larry Summers plays this crucial role. Not only is he a public official, but he is a very well known, sophisticated economist. And on top of that, he had been, in his academic writing, in support of financial regulations. Once he became a public official under Clinton, all of a sudden he became a very aggressive deregulator, such that even the person who was the head of one of the regulatory agencies, the Commodity Futures Trading Commission, who argued--her name was Brooksley Born--she argued on behalf of regulating derivatives, the most dangerous financial products, and Summers was vehement in opposing it. So, actually, if you had to trace the collapse of the 2007-2009 financial crisis on one person--and, of course, you can't really trace it to one person--but if you did, I think you could make a fair argument that Larry Summers is more to blame for the financial crisis that we experienced than any other person. So why in the world are we putting him in charge as the government's top financial regulator to implement these rules that are coming out with Dodd-Frank? Clearly the reason is that Wall Street is fighting like mad to put Larry Summers in so the government will go soft on Wall Street and we still won't have good financial regulations.

    DESVARIEUX: Okay. Let's talk about the president's other possible choices, who is Janet Yellen. Can you talk about her? What's her track record on regulation?

    POLLIN: Janet Yellen, to my mind, is a much more favorable candidate. I don't say to my mind she's a perfect candidate. She certainly has the experience. She's been vice chair of the Federal Reserve. Before that, she was the head of the Federal Reserve Bank of San Francisco. Before that, she was a member of the Federal Reserve. Before that, she was a very well-known professor at UC Berkeley. So she has a track record.

    And part of her track record is, like the current chair, Bernanke, she actually has noticed that we have an employment crisis, and she has fought for the Fed to take steps to fight unemployment. To my mind, the steps that she supports and Bernanke supports have not been strong enough, but they're stronger than anyone else has advocated. So among the plausible candidates, Yellen is a very strong one, one that I think certainly merits the appointment, way, way over Summers.

    Summers doesn't deserve it. Summers had his chance. Summers is an advocate of deregulation. Why would Obama be putting in a strong advocate of deregulation after the effects of deregulation were to devastate the entire global economy?

    DESVARIEUX: This is a question that we're certainly asking over here at The Real News as well, Bob. Thanks so much for joining us.

    POLLIN: Okay. Thanks for having me.

    DESVARIEUX: And thank you for joining us at The Real News Network.

    End

    DISCLAIMER: Please note that transcripts for The Real News Network are typed from a recording of the program. TRNN cannot guarantee their complete accuracy.


    Comments

    Our automatic spam filter blocks comments with multiple links and multiple users using the same IP address. Please make thoughtful comments with minimal links using only one user name. If you think your comment has been mistakenly removed please email us at contact@therealnews.com

    Comments


    Latest Stories


    What Drives Obama's Foreign Policy?
    Israel Facing Major Economic Consequences for 50 Day War on Gaza
    FBI Targets Minority Communities in Mortgage Fraud Investigations
    Obama's 'Moderate' Syrian Rebels Are Nowhere to Be Found
    "The State Targeted the Panthers Because We Were Socialists, Not Because We Were Armed" - Eddie Conway on Reality Asserts Itself (4/8)
    Democrats Have Options to Pursue Campaign Finance Reform
    The Bennis Plan: Here Is a Real Strategy for Dealing with ISIS
    Baltimore Cop Says Some Officers Are a Threat to the Communities They Serve
    The World Made A Much More Dangerous Place by the U.S. Since 9/11
    American Bombs Will Not Defeat ISIS
    Obama's Syria Plan Will Strengthen IS and Warlordism
    ISIS Wants the US Drawn into a Ground War
    New Iraqi Government Will Abide by U.S. Regional Goals
    COINTELPRO, Attack on the Panthers - Eddie Conway on Reality Asserts Itself (3/8)
    Federal Reserve Data Shows Growing Wealth Gap Based on Race
    Is The Anti-ISIS Campaign Attempting to Renew War Against Assad?
    Putting Off Immigration Reform May Backfire on Democrats
    Moments of Radicalization - Eddie Conway on Reality Asserts Itself (2/8)
    US-Israel Pressure Palestine Not to Join the ICC
    Ferguson Poet Asks Police to Think
    Ecuador to Adopt Digital Currency
    44 Years in Prison, Still a Revolutionary - Eddie Conway on Reality Asserts Itself (1/8)
    The Role of Russia and NATO in Ukraine's Civil War
    Better Oversight and Less Drilling Needed to Protect the Gulf
    NY Bank's Alleged Redlining Has Roots in Government Practice
    100+ Arrested as Fast-Food Workers Escalate 'The Fight For $15'
    What's in the Ground Must Stay in the Ground
    Civil Rights Probe of Ferguson Police Misses the Mark
    Global Expansion of Fossil Fuel Transport, Drilling Underway as UN Climate Summit Approaches
    Pillaging the Public Treasury - David Cay Johnston on Reality Asserts Itself (4/4)

    RealNewsNetwork.com, Real News Network, Real News, Real News For Real People, IWT are trademarks and service marks of IWT.TV inc. "The Real News" is the flagship show of IWT and Real News Network.

    All original content on this site is copyright of The Real News Network.  Click here for more

    Problems with this site? Please let us know

    Linux VPS Hosting by Star Dot Hosting