Financial Reform of 2010 and Glass-Steagall Act of 1933

The article writes about the 2010 financial reform conducted by president Obama and democratic congress by passing the Dodd-Frank act. The reform was a response to the largest economic recession since the Great Depression, which was sparked by troubles in the financial industry. The article summarizes the important provisions of the bill, and starts, not randomly, with the expansion of the focus of federal financial oversight from banks and public markets to a wider range of financial companies and “black markets”. It also created new council of federal regulators to coordinate the detection of risks to the financial system, provided ability for government to dismantle troubled companies, created a financial products consumers protection agency, imposed restrictions on trading derivatives, to make the process more transparent, also restricted the ability of “FDIC insured” banks to trade for their own benefits (Volcker rule).

The regulation is very similar to the Glass-Steagall act of 1933, in that it was enacted in very similar circumstances and had very similar purpose and targets: to limit the risks associated with financial industry. It was also passed during an unprecedented economic recession, to which the financial collapse of 1929 contributed a great deal. While the Glass-Steagall is more radical then the Dodd-Frank, its basic provision to separate commercial banking from Wall Street investing is very similar to the Volcker rule.


No Smoking!!!Inside???No,outside!!!

Effective April 1, 2003, smoking is banned statewide in all enclosed workplaces in New York, including all bars and restaurants and construction sites. According to Wikipedia.com,the law exempts (1) private homes and automobiles, (2) hotel/motel rooms, (3) retail tobacco businesses, (4) private clubs, (5) cigar bars (A cigar bar that makes 10 percent of its gross income from the on-site sale of tobacco products and the rental of on-site humidors, not including vending machines sales are exempt from the ban), (6) outdoor areas of restaurants and bars, and (7) enclosed rooms in restaurants, bars, convention halls, etc., when hosting private functions organized for the promotion and sampling of tobacco products.

In February 2011, by a 36-to-12 vote, New York’s City Council passed a law extending the city’s smoking ban to parks, beaches and public plazas where pedestrians congregate like in Times Square and Union Square, it is the most significant expansion of antismoking laws since Mayor Michael R. Bloomberg pushed to prohibit smoking in restaurants and bars in 2002.





Freedom From the Grasp of Foreign Oil?

Over the course of any history class, it becomes quite apparent that any event, act, or regulation has a very direct cause . One issue that seems to constantly be making headlines and undoubtedly has a very clear and direct effect on each of us is the perpetually  rising oil prices. At it’s core, the principals that govern the fluctuation of oil prices are the most basic fundamentals of business – supply and demand. However, as our dependency on foreign oil rises, it becomes easier for oil producing countries to step beyond these fundamentals and take a more active role in setting their own prices and indirectly having their say in the direction of our economy.

An offshore oil rig in arctic Alaska

Any disaster as severe as the Exxon Valdez oil spill in 1989 or the explosion of the Deepwater Horizon near the Gulf Coast this past summer is sure to stir up quite a scare when it comes to the dangers involved in the exploration and drilling of hard to reach oil fields, so it should come as no surprise that the government would subsequently put further exploration under a close watch. But the more you read into the benefits of increasing domestic oil production and therefore lessening our dependency on that of foreign countries the extent to which higher domestic output only becomes more and more apparent and it becomes irrefutably evident that it would be a major step in our ongoing quest toward economic recovery.

Over the past few weeks there have been many steps taken by the Federal Government to trying to ease the effects of these steadily rising prices on the pockets of the American people; and in fact, just yesterday “In his weekly radio and Internet address,” President Obama said that, “the administration would begin to hold annual auctions for oil and gas leases in the Alaska National Petroleum Reserve, a 23-million-acre tract on the North Slope of Alaska.” (John Broder, New York Times). It’s very clear that the president has real understanding of what’s actually going on in our country and is making an effort to show the people that he’s doing what he can to help us; and although I do not agree wit hall of his policies, I feel that I must commend him for his ability to speak to, and connect with, the average American citizen on very personal level.

This latest step in Washington’s stance on drilling within our nation’s border is sure to have a very direct and hopefully positive effect on each of us individually as well as on our economy as whole, and I encourage you all to take a few minutes to read the article that I’ve linked below – or at the very least watch the videos.

-C. Salama

Video: Obama on New Drilling Leases

\”Shrinking Oil Supplies Put Alaskan Pipeline at Risk\” – The Wall Street Journal

\”Shrinking Oil Supplies…\” Video

\”Obama Shifts to Speed Oil and Gas Drilling in U.S.\” – New York Times


Free Trade? Cheap Labor.

There was a lot of controversy with the NAFTA agreement.  NAFTA is the North American Free Trade Agreement, an agreement that was to eliminate  barriers for trade and provide a fluid flow of trade and investment between Canada, US, and Mexico.  It was a hard debate that spanned through two presidencies, through Bush senior to Clintons Administration. Mexico belive they would benifit the most, and that it would help boost their economy, and immigration from Mexico to the US

In the New York Time article by By Elisabeth Malkin, “After 15 Years, Nafta’s promise, unfulfilled”   Even though Mexico’s exports have exploded in recent years, there is still a surge of Mexican crossing the boarder for a better life in the US.  Many Mexicans abandon their home and land and head North.  Things were even harder when China enter the World Trader Orgaization, enabling many companies to take their factories to China and pay even lower wages.  In my opinion, Nafta almost seemed like a legal way for companes to go into poor countries, and legal exploit these people for cheap labor.

It was important for free trade to work because many hoped it would curb migration over the southern border, but free trade is just not enough.



Changing regulation stems from cells

As everyone posts the obvious regulation changes taking place in the financial news, very little attention is given to biology and the shifts in policy regarding stem cell research. Recently a court had ruled that embryonic stem cell research could continue. Stem cell research is absolutely crucial to the development of biology including fields regarding sentience, disease, and much more. Scientists are hoping that with the use of stem cells they would be able to cure diseases such as “cancer, Parkinson’s disease, spinal cord injuries, multiple sclereosis” and many more. To further research in this ground breaking field, Obama passed EO 13505, Removing Barriers to Responsible Scientific Research Involving Human Stem Cells on March 9, 2009. The order allows for new and more numerous sources of funding, an essential part of stem cell research.

Stem cell research was never banned in the US but was heavily limited during the Bush administration. Some states also passed laws limiting stem cell research. Bush even vetoed multiple laws that would help provide funding for stem cell research.











My sources:



Federal Register of the Executive Order (Actual Order)




Bailouts of financial institutions.

The result of the 2008 financial crisis, which devastated revenue and increased the cost of programs like unemployment insurance. Republicans are giving further evidence that they don’t really care about budget deficits. Regulation that limits the frequency and size of financial crises, combined with rules that let the government strike a good deal when bailouts become necessary.

In 1980s the United States managed to avoid large bailouts of financial institutions. The modern era of bailouts only began in the Reagan years, when politicians started dismantling 1930s-vintage regulation.


Regulating what goes in the Tummy


In late 2008, the FDA asked that all products served at restaurants include the calorie count in order for people to be more aware of what they are eating. In addition they banned bake sales in some schools. With the concern of obesity growing, the FDA steps up to make changes as they feel it’s their responsibility in keeping the citizens of America living a healthy life.

The government has constantly been taking an active role in regulating the food served to the American people. They have changed the wording and try to inform the public and let them be aware what they are consuming. When the calorie count aware to the public, people were able to know and choose to eat healthier at restaurants.





How Much is Too Much?


The Article discusses how  more Americans are begining to feel that the government is doing too much and should scale back on the regulation of business.  The percentages of Americans that feel this way is higher than its been in a decade with 57% feeling the government is doing too much and 45% thinking that there is too much government regulation of business. 

This feeling is the same feeling that was in America just before Ronald Reagan took over.  In March of 1981 the 54% of americans thaought that the government was doing too much.  Ronald Reagan ten took over and deregulated a lot of things.  It seems like 30 years later, not much has changed.


Banking on that Regulation

In 2009, Obama proposed to make stricter regulations in the financial sector. AIG was an insurance giant company that has major influence all over the world. It’s failure would destroy the financial system. Obama proposes that the government be able to seize companies in order to save them. This stricter regulation would hopefully bring a check to other companies.

During the 1980’s, there was a movement pushing for government to have deregulate the financial sector. Some acts proposed allowed firms to take part in competition in traditional banks, investment bansk and insurance companies. There was also the creation of credit default swaps which was the reason why AIG failed. Many people blame the crisis in 2008 due to the deregulation from the government in the financial sector.





Lead by example!

One of the regulations Obama implemented while in office was new training requirements for new projects implemented by the EPA. For many years old buildings have been painted with lead based paint harming those who inhale the lead dust especially children.

To address this problem, the EPA required extensive training from their workers before they complete renovation on buildings built before 1978. The workers are concerned about the extent of the of the training which began last year April and the penalty fee of noncompliance which is $37,500 per day fine.In an announcement dated September 2, 1977,  “The U.S. Consumer Product Safety Commission (CPSC) has culminated a major regulatory proceeding by issuing a final ban on lead-containing paint and on toys and furniture coated with such paint. This action was taken to reduce the risk of lead poisoning in children who may ingest paint chips or peelings.”.




The Bucket Shop Laws :The Act That Opened The Pandora’s box

In 2000, congress passed the “bucket shop” laws, which restricted regulation of credit default swaps. It was passed under The Commodity Futures Modernization Act of 2000. The Act basically deregulated Over The Counter (OTC) derivatives, which from that point created a booming Credit Default Swap (CDS) market and other exotic derivatives such as SIV, CMO, etc. (another alphabet soup!). AIG alone sold over $500 billion in CDS’s, which ended in billions of losses and almost brought the whole financial system on the brink of collapse. CDS’s magnified the losses from sub-prime mortgages, and since the banks and other financial entities didn’t hold enough capital to cover losses from these swaps (in unregulated markets, companies doesn’t have to keep a minimum reserve, like banks do on deposits), it spread into a whirlwind panic in the credit market ending in trillions in paper losses.  Banning regulation of these Derivatives had to be one the most costly mistakes of the government in recent times.

Eric Dinallo: "We modernised ourselves into this ice age"

The country was under a sever credit crisis starting in 2007 and the government stepped in and passed the Emergency Economic Stabilization Act of 2008 in October. The act allowed the government to spend $700 billion in cash injection for banks and co’s in liquidity risk, and to buy distressed assets (like CDS and other mortgage backed securities!) from public corporation’s, in order to stabilize the economy. This billions is bailout for the company showed how badly greed in wallsteet and lax regulation in Washington can lead to sever recessions and loss of millions of jobs in main street.



Pilot: Requesting permission to land. Over. Control Tower:ZZZzzzzz…….

When you get on a plane you do something that most people wouldn’t choose to do; you put your life into someone else’s hands. By getting on an airplane you show confidence in the trained individuals that perform maintenance on the aircraft, pilot the aircraft and direct the aircraft; however recently that confidence has been shattered. The Federal Aviation Administration or FAA has recently been reporting more and more cases of air traffic controllers who have been found asleep on the job. Air Traffic Controllers, or ATC’s, have arguably the most important and tedious job in aviation, next to long distance pilots. They are the one who track planes routes, making sure no planes have mid air collisions and also directly control landing and takeoff patterns of planes. They are the ones responsible for keeping the hectic skies in sync; you could say they are the ones whose job it is to simply control the chaos. ATC’s jobs are extremely fatigue inducing and extremely demanding, having little time for sleep and working extended hours on already overly demanding schedules. Since late March, there have been 5 reported ATC’s who were found sleeping in the control tower while on the clock. This is extremely dangerous, because if no communication is coming out of the tower, the planes in the area are left all on their own, putting passengers and crew in a potentially life threatening situation. The government has now really begun to set regulations into place. They have cut the hours ATC’s work, added more staff to ensure there is always someone available in the tower, and set a no tolerance policy up where ATC’s sleeping on the job will be let go.


In August of 1981, FAC’s went on strike to protest the unfair working conditions they endured. President Ronald Reagan stated that the ATC’s had violated a regulation put in place that prohibited government unions from going on strike. He declared this a state of emergency because there was no one regulating the skies and bodly stated that if the workers “do not report for work within 48 hours, they have forfeited their jobs and will be terminated”. The ATC’s didn’t budge and in respond Reagan unwilling to work with them fired “11,345 striking air traffic controllers who had ignored his order to return to work”. Government clearly wasn’t afraid to take action, but instead of helping the workers it desperately needed, it cut back on them. This could be viewed as a regulation that if anything hurt the FAA more than helped it.



Obama’s Financial Reform : CPA

In Obama’s Financial Regulatory Reform program for the nation, a bill was passed to create an agency that would protect consumers from abusive lending practices, set rules for trade, and take steps to ensure that the failure of a couple of large banks/investment firms would cripple the economy. This agency is called the Consumer Protection Agency (CPA). In this case, Obama is tightening government control over trade and the banks to ensure that the economy doesn’t completely topple over.

Contrary to this, Reaganomics spoke of “economic freedom” and proposed an “economic Bill of Rights.” Reagan wanted to combat poverty and dismantle regulations as well as reducing taxes. Reagan did not have to deal with a failing economy the way that Obama did when he entered the presidency. Therefore their financial regulation policies were much different due to these different situations.




Regulation for Regulations

On January 18, 2011, President Barack Obama signed an executive order, which allowed the government to review all federal regulations.  The regulation was put in place mostly for the businessmen in America, who weren’t so sure Obama was the right person to help fix the economy. Obama agrees that too much regulation in America is not beneficial, but he also admitted that lack of regulation is bad as well. He attributed the recent financial crisis to lack of regulation. This new order will also help the government focus more on small businesses, and can hopefully result in a more efficient economy. (Source: http://www.reuters.com/article/2011/01/18/us-obama-regulations-idUSTRE70H13W20110118)


During the 1980’s President Ronald Reagan also tried to stimulate the economy. He did this by passing what was known as The Tax Reform Act of 1986. This act was created in order to simply the income tax code, expand the tax base, and get rid of tax shelters. Individual tax cuts were decreased, but corporate taxes were raised. This in turn kept the tax level about the same as it was before. However, this shifted the burden of the tax to corporate companies. Both Reagan and Obama have been seen to help the individuals more than the big businesses. While Obama is trying to help the Americans by attempting to find ways where they can succeed, Reagan is simply handing them help. He is giving them a tax cut, which requires no effort on their part. Whether this is the right thing or not lies in the mind of each and every person.



State Children’s Health Insurance Program


President Obama signed the State Children’s Health Insurance Program on February 4, 2009. This program was designed for children in families that earn too much to qualify for Medicaid, but too little to pay for personal health insurance. The program was only providing to U.S citizens or legal residents who under 21 and pregnant women. “This bill will enable to cover more than four million uninsured children by 2013, while continuing coverage for seven million youngsters. The bill will increase tobacco taxes to offset the increase in spending, estimated at more than $32 billion over four and a half years.”(Congressional Budget Office).

Back to 1993, President Bill Clinton did the exact same thing as President Obama; however, the plan was not successful.


Financial regulation

Since Great Depression, there was the worse economic crisis on the Wall Street at 2008. However, Obama administration gave five Financial Regulation Proposals to recover the crisis. First, Obama wanted to “promote robust supervision and regulation of financial firm”. The Second point is to deconcentrate financial markets. Third is to pretest consumers from financial abuse. Fourth is “reforms must address operational issues that tie regulators hands”. Fifth is regulating international financial institutions.
source: http://seekingalpha.com/article/143774-obamas-financial-regulation-proposal-the-devil-is-in-the-details

During Clinton presidency, Clinton established fiscal discipline to reduce the Government spending, pay off national debt and extent Medicare solvency. Also, he opened foreign market; he had 300 free and fair trade agreements with other countries. Especially, he ratified the North America Free Trade Agreement (NAFTA) in 1993 and Permanent Normal Trade Relations with China in 2000. This created 22 million new jobs due to export goods aboard.


School Lunch

President Obama signed the Healthy, Hunger-Free Kids Act on December 13, 2010. This act is an effort to help American children stay healthy and have access to balanced nutritious school lunches. More students are eligible to enroll in school meals; this legislation addresses issues such as hunger and obesity levels that are currently affecting many kids in this nation. This important dilemma is being tackled to give children choices to have a healthier lifestyle. This bill allocates $4.5 billion towards the implementation of nutritional standards in public schools.

Back in 1994, the Schools Meals Initiative for Healthy Children was passed to order to teach children how to make healthy choices. All school meals must meet nutritional standards, but very few schools actually met those goals.





The Lift of HIV Test for Immgrants

In the late 19th century aliens that wanted an entry into the U.S. must undergo a medical exam as part of their immigration process. In this exam they check for any illness defined as a “communicable disease of public health significance”. These diseases are easily spread between people if they are found to have these diseases they may not enter the U.S., and HIV was one of them.  On November 2, 2009 the department of Health and Human Services (HHS) and CDC removed HIV from this list that kept non U.S. citizens from entering the United State.  They removed HIV because it is not spread through casual contact like hugging or shaking hands. Nor is HIV spread through the air, food or water. It is passed through unprotected sex with someone who has HIV or sharing needles or syringes used by someone with HIV. The revision of 42 CFR Part 34 (Medical Examination of Aliens) removal of Human Immunodeficiency Virus (HIV) was effective on January 4, 2010. This video above is a special English health report intended for immigrants.

 In 1987 HIV was listed as a “communicable disease of public health significance” Since many has attempted to remove the ban, because it was discriminatory to people living with HIV/AIDS. In 1992, President Clinton tried to do so, but he failed under the pressure from both the Republicans and Democrats. At that time, unless a discretionary waiver was granted non U.S. citizens with HIV were not permitted to enter the country legally. “In order to qualify for a green card waiver, an applicant must first prove that they have a close familial relationship – defined as a parent, child or (heterosexual) spouse – of a lawful U.S. citizen. Then they must show that their admission into the country will not endanger the public health or create burdensome public health care costs.” (http://www.champnetwork.org/hhswatch/the-united-states-hiv-immigration-ban-eliminated-not-so-fast) It was not until 2009 when Obama lifted the ban;  non-citizens with HIV/ACIDS are permitted to enter the country.


The right to vote

Although this is an old news story, it proves to have a very controversial point. The right to vote has always been a right worth fighting for and many ex-felons are speaking up now. Felony disenfranchisement is a term used to describe the practice of prohibiting people (often times inmates and ex-felonies) from voting based on the fact that they were convicted for a criminal offense. The United States has more than two million people incarcerated meaning more than two million Americans (although they are criminals) do not have the right to vote. That is a large piece of opinion or voice unable to speak up for decisions regarding the government. In many states even ex felons (approximately 2.1 million) who have completed their sentence is still unable to vote. However, in 2007 in the state of Florida a portion of non-violent felony convictions will regain the right to vote for the first time in year.

This action to partially restore the right to vote to ex-felons is definitely a very important one. Although these Americans were once criminals, it does not mean their voice does not count. In the election of 2000, between Al Gore and Bush, a whooping 537 votes was the difference between the winner and the loser of the election. In the year 2000, nearly one million ex-felons (960,000) in the state of Florida were unable to vote. If they had the chance, the outcome of the election would probably have a lasting effect on our history today.



Obama Is The Fairest Of Them All?

On January 29, 2009, President Barack Obama signed the first act of his presidential legacy, called Lilly Ledbetter Fair Pay Act. The act states that the 180-day timeframe to raise a discriminatory wage lawsuit is renewed with the issuance of each  new discriminatory paycheck. This act overturns the decision from the 2007  case, Ledbetter v. Goodyear Tire & Rubber Co., which states that the lawsuit commences on the date the employee forms a discriminatory wage decision. The act would protect women and other workers from pay discrimination.

During former President Bill Clinton’s administration, the policies he pursued loosened the government’s grip on private businesses and other sectors. For instance, the Telecommunications Act of 1996 deregulated broadcasting and telephone companies. He also abolished “welfare,” also known as Aid to Families with Dependent Children (AFDC). As a result, it became more difficult for needy individuals to receive assistance and payments. In comparison with President Clinton’s administration, President Obama’s act was a move towards government regulation. President Obama’s priority is the the rights and interests of American citizens. By signing the Lilly Ledbetter Fair Pay Act as the first of his presidential career, he conveyed the message that he wished to expand government’s role and power in the economy and business.

Sources: http://www.nytimes.com/2009/01/30/us/politics/30ledbetter-web.html