A new national poll released Friday shows that Americans are feeling more optimistic about the economy than they were in January 2010. While this is good news, there is still work to be done.
Given the nearly-catastrophic downturn in the economy, most Americans would agree that regulation of the financial markets needs to change. Unfortunately, a quick scan of the weekend’s “talking heads” shows reveals that the same tired partisan bickering and gamesmanship may derail the proposed financial reform legislation that may be debated in the Senate this week. Neither party is blameless. Conservatives are criticizing the proposed $50 billion fund to “close out” failing banks, while liberals are being accused of pushing ahead with the bill without sufficient negotiation with the opposition.
While several news outlets are reporting on the divisions over the issue, the coverage is not comprehensive. It’s hard to argue with newsroom directors on this one – the story’s not intrinsically “sexy.” However, Americans need to educate themselves on this issue. It may have been necessary for David Gregory to ask Timothy Geithner to define “derivatives”<sup>1</sup> for his audience, but it was somewhat disheartening. Shouldn’t people who are interested enough in politics and current events to watch Meet the Press know about the financial instruments that helped to sink the market? It’s too easy for politicians to enter into negotiated settlements that serve no one’s interests if the people they represent fail to obtain the information they need to direct their representatives.
I can remember President Clinton giving David Letterman a quick primer on derivatives and the sub-prime crisis during an appearance in October 2008<sup>2</sup>. It was as cogent a backgrounder as I’ve ever seen on the economic mismanagement that created the downturn, and yet, Letterman said it made his head hurt. Even discounting that as an attempt at humor, it’s hard to imagine a group of friends getting together and having a spirited debate on the need for a clearinghouse for derivatives over a pitcher of sangria. But why not? First of all, your friends might have some really interesting thoughts on regulation of our financial markets. And I have a really good recipe for a white peach sangria.
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1. “A derivative is a way to buy insurance against some risk or to bet on some financial outcome.”
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