WASHINGTON, June 20 (UPI) -- Financial markets and global economies are far from recovered and remain vulnerable to massive disruption. Quantitative easing in the United Kingdom; elections in Greece; and the actions of the European Central Bank to put 1 trillion euros -- $1.26 trillion -- in play through its Long-Term Repurchasing Options to enhance liquidity are at best temporary palliatives. Stimulating growth and demand remains elusive and stock markets are, on a good day, volatile at best.
In the United States, broken government has been made worse by presidential elections that have added a political variant of polio to incapacitate an already crippled system. Aside from slogans and rhetoric, neither presidential candidate has produced a serious and specific economic plan to cure what is ailing a struggling economy. And the ideological deadlock over spending and taxes is unlikely to be broken certainly before and probably well after the November elections.
If the American public were able to make its views felt, clearly, major reform of the tax code and entitlement programs would have happened long ago. But that isn't the case. And political and ideological divides will be exacerbated if or when the U.S. Supreme Court negates any major provision of the Affordable Health Care Act.
That said, and if this country were serious about making effective reforms to its financial system, three actions will accomplish that aim. The first is to reinstate and modernize the Glass-Steagall Banking Act of 1933 that separated commercial and investment banking. Second is to regulate by limiting (or banning) credit default swaps and Collateralized Debt Obligations. And third is to ensure that all publicly listed financial firms have an independent chairman who isn't an officer of the company.
In the United States, broken government has been made worse by presidential elections that have added a political variant of polio to incapacitate an already crippled system. Aside from slogans and rhetoric, neither presidential candidate has produced a serious and specific economic plan to cure what is ailing a struggling economy. And the ideological deadlock over spending and taxes is unlikely to be broken certainly before and probably well after the November elections.
If the American public were able to make its views felt, clearly, major reform of the tax code and entitlement programs would have happened long ago. But that isn't the case. And political and ideological divides will be exacerbated if or when the U.S. Supreme Court negates any major provision of the Affordable Health Care Act.
That said, and if this country were serious about making effective reforms to its financial system, three actions will accomplish that aim. The first is to reinstate and modernize the Glass-Steagall Banking Act of 1933 that separated commercial and investment banking. Second is to regulate by limiting (or banning) credit default swaps and Collateralized Debt Obligations. And third is to ensure that all publicly listed financial firms have an independent chairman who isn't an officer of the company.
Read more: http://www.upi.com/Top_News/Analysis/Outside-View/2012/06/20/Outside-View-Averting-another-financial-meltdown/UPI-54691340188200/#ixzz1yKjAKv5N
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