Fixing What Shorts Broke:Shorts Screwed The Country & it Will Take Time To Fix Everything:Obama's Goolsbee waiting in the wing --- Could Naked shorting and the damage it caused be just a political manuver
Goolsbee
When it comes to the details of a regulatory overhaul, Goolsbee agreed on some points with Bush's Treasury Secretary Henry Paulson but disagreed on others.
Both believe "we ought to regulate the financial institutions by what they're doing rather than by who they are," he said.
But Goolsbee said much of the Treasury report is anachronistic "with far too little attention paid to the issues raised by the Bear Stearns rescue and the current financial crisis."
He said Paulson was unrealistic to suggest closer oversight of investment banks need not be permanent if they have access to the discount window only for a limited period.
"Even hardened free-market types know that you cannot set up a situation where we know that if everything truly goes wrong, we will once again open the discount window but not keep an eye on your behavior in the run-up to that time," he said.
"Access to the discount window is by its nature temporary. You only do it when everything else goes wrong and it's a last resort," he said.
Goolsbee also criticized the Treasury report's suggestion of delegating to the industry some regulatory powers now handled by the SEC and CFTC. "The administration's efforts to, in some way, reduce the strength of the regulators to fight deceptive practices or market manipulation is especially strange given recent events," he said.