Go Ahead, Put All Your Eggs in Our Basket

A simple homily illustrates the folly of letting Wall Street govern itself free of restraints so that a handful of financial firms could become indispensable to our nation’s economy: “don’t put all your eggs in one basket.”

One of the precursors of the financial meltdown was the combination of zero enforcement of the antitrust laws and the repeal of Depression-era safeguards against allowing banks to engage in speculation in the stock markets. That created a handful of financial institutions that were individually and collectively so interwoven with our economy that when the crash came last year, we were told that they had to be rescued or else their collapse would take down the entire system. These giant firms were so important that, we were told, they were just “too big to fail.”

From Watchdog to Pussycat

Though President Obama and the Democrats promise a fierce financial watchdog, what they’re delivering looks like a pretty tame pussycat.

There’s a disconnect between the Democrats’ tough rhetoric about the need for financial reform and the legislation that’s actually making its way through Congress.