Closing the barn door after the derivatives escaped

Geithner announces new regulations for the financial instruments everyone now loves to hate. Does Larry Summers have anything to add?

Topics: Globalization, How the World Works,

It would be mean, and probably unfair, to criticize Treasury Secretary’s Geithner’s brand-new proposals for derivatives regulation as a classic case of barn-door-closing after the horses, cows, pigs, geese, chickens and even the rats all skedaddled. Better late than never, right? The proposals are sensible and long overdue, and I hope Congress moves quickly to codify them into law.

No doubt: It is absolutely true that “An essential element of reform is the establishment of a comprehensive regulatory framework for over-the-counter derivatives, which under current law are largely excluded or exempted from regulation.”

Yes! So bring on the centralized clearing houses for derivatives trading, the increased requirements for transparency, “robust” margins, “conservative” capital levels, and reporting. That would all be good.

You Might Also Like

But I do hope someone gets Lawrence Summers on the phone and extracts some kind of on-the-record admission that he and Robert Rubin and Bill Clinton and Phil Gramm screwed up royally in 1999 and 2000 when they ensured that these derivatives would not be regulated. Because the obvious interpretation to be drawn from Geithner’s new rules is that beating back derivatives regulation 10 years ago was a disastrous mistake. Summers was there, and he blew it. Even Alan Greenspan has admitted he made some errors. How about it, Larry?

Andrew Leonard
Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

More Related Stories

Featured Slide Shows

  • Share on Twitter
  • Share on Facebook
  • 1 of 8
  • Close
  • Fullscreen
  • Thumbnails

    7 ways Americans have defiled the hot dog

    Sonic's Bacon Double Cheddar Croissant Dog

    Sonic calls this a "gourmet twist" on a classic. I am not so, so fancy, but I know that sprinkling bacon and cheddar cheese onto a tube of pork is not gourmet, even if you have made a bun out of something that is theoretically French.

    Krispy Kreme

    7 ways Americans have defiled the hot dog

    Krispy Kreme's Doughnut Dog

    This stupid thing is a hotdog in a glazed doughnut bun, topped with bacon and raspberry jelly. It is only available at Delaware's Frawley Stadium, thank god.


    7 ways Americans have defiled the hot dog

    KFC's Double Down Dog

    This creation is notable for its fried chicken bun and ability to hastily kill your dreams.

    Pizza Hut

    7 ways Americans have defiled the hot dog

    Pizza Hut's Hot Dog Bites Pizza

    Pizza Hut basically just glued pigs-in-blankets to the crust of its normal pizza. This actually sounds good, and I blame America for brainwashing me into feeling that.

    Carl's Jr.

    7 ways Americans have defiled the hot dog

    Carl's Jr. Most American Thick Burger

    This is a burger stuffed with potato chips and hot dogs. Choose a meat, America! How hard is it to just choose a meat?!

    Tokyo Dog

    7 ways Americans have defiled the hot dog

    Tokyo Dog's Juuni Ban

    A food truck in Seattle called Tokyo Dog created this thing, which is notable for its distinction as the Guinness Book of World Records' most expensive hot dog at $169. It is a smoked cheese bratwurst, covered in butter Teriyaki grilled onions, Maitake mushrooms, Wagyu beef, foie gras, black truffles, caviar and Japanese mayo in a brioche bun. Just calm down, Tokyo Dog. Calm down.


    7 ways Americans have defiled the hot dog

    Limp Bizkit's "Chocolate Starfish and the Hot Dog Flavored Water"

    This album art should be illegal.

  • Recent Slide Shows



Comment Preview

Your name will appear as username ( settings | log out )

You may use these HTML tags and attributes: <a href=""> <b> <em> <strong> <i> <blockquote>