Why financial regulation reform is needed, but won't happen

Debate will finally begin on the Senate floor on financial regulation reform. It's about time. The market crash in 2008 showed all of us, lay and professional alike, the weaknesses of the existing financial system and need for reform. True, some regulations have since been adopted, or strengthened. But a more extensive overhaul is necessary in order to address enormous issues with bailouts, corporate loopholes and banking regulations. The current inquest into Goldman Sachs is a mere remedy for past wrongs, but proves nothing to prevent similar excesses in the future. I believe that Republicans have some solutions that can work, even within a package of Democratic proposals. It's about time the Republican senators ended their defiance and at least allow debate to begin.

Nonetheless, I do not see passage of a major bill in the near future. Financial regulations overhaul is a tricky endeavor. The last time a bold bill passed was amid the Great Depression. Nowadays, with signs of a tentative recovery already in place, there will be more reluctance to take drastic measures. Additionally, big companies lobbyists still hold tremendous power in Washington. Rather than being ridiculed for their faults and errors, they are relied upon to get America back on track (somewhat true, although small businesses are the key). I believe they will be able to twist arms and sweat out enough politicians to get a bill to their liking. Unfortunately, it will be weak and not much of financial overhaul at all.

Today's Boston Globe articles

1. Climate Change Legislation: http://www.boston.com/news/nation/washington/articles/2010/04/25/climate_consensus_collapses_in_senate/

This is a troubling sign. Climate change should deserve greater attention than immigration reform (although both are important!). But I think that crux is not Senator Graham's only reason.

2. Medicare Law: http://www.boston.com/business/healthcare/articles/2010/04/25/the_times_and_trials_of_dr_ahmed/

This case presents another type of law versus ethics dilemma. I would side with the government since a doctor's concern for his patients does not justify defrauding the government. The doctor's financial windfall also sets him liable.

3. Immigration Law: http://www.boston.com/news/local/massachusetts/articles/2010/04/25/arizona_immigration_law_draws_praise_outrage_in_boston/

The Arizona code is unusually strict and maybe unconstitutional. What is reasonable suspicion? Will stop and frisk really be racially neutral? Why should a warrant not issue before arrest?

4. Scientific Geography: http://www.boston.com/news/science/articles/2010/04/25/new_atlas_shows_the_state_of_nature_as_well_as_the_nature_of_states/

A project like this is overdue. Mapping ecosystems and cataloging species will be helpful for scientific study and preservation efforts.

5. British Election: http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/04/25/british_debaters_youre_no_jack_kennedy/

They are not becoming American: they are adopting an innovative election mode that happens to be popularized in America. Doesn't matter, TV debates or no, G. Brown is finished.

6. Freedom and Technology: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/04/25/despite_forecasts_freedom_takes_more_than_technology/

I agree: technology merely facilitates the pursuit of freedom. It can also help to oppress. Freedom depends on how individual citizens harness the technology.

7. Religious Pluralism: http://www.boston.com/bostonglobe/ideas/articles/2010/04/25/separate_truths/

I partly agree: what all religions share is a common ethical goal that encompasses leading good lives and fostering goodness among others and our world. Religions nonetheless are different in themselves and should not treated as a mere melting pot.

8. Education Curriculum: http://www.boston.com/bostonglobe/ideas/articles/2010/04/25/learn_this_america/

Ha! Those provincial people on the Texas school board should read this. Although by their standards and knowledge, they likely won't get what it's about.

9. Massachusetts Politics: http://www.boston.com/bostonglobe/magazine/articles/2010/04/25/not_red_yet/

I agree: Scott Brown's win was an aberration. It is unlikely that the state will become red in the near future. Republican and Tea Party surges in the Bay State are creditable, but still too scanty to drive down the Democrats.

10. Faith and Rationalism: http://www.boston.com/ae/books/articles/2010/04/25/blinded_by_parascience/

The so-called "parascience" seems unfounded. I doubt that scientists like Freud would consciously exclude alternative explanations of faith and mind from their work. Plus, their scientific methods and rationales are too different to classify under an umbrella like parascience.

A tottering Europe and nature's externalities

The effects of last week's Icelandic volcano are still being felt across Europe. And I'm not (merely) talking about bummed Barcelona players arriving home from defeat at Inter de Milan. Airlines and travellers across the continent and beyond are primarily affected. Many travellers are complaining of airline practices and seeking damages for refusing to pay their stranded passengers' bills. Outside though, in the business community mother nature's effects are heavily felt in lost production and capital. Economists are predicting major losses in the GDP of recovering economies, although I am sceptical of their gross exaggerations. Nonetheless, the volcanic event demonstrated nature's strong, and increasingly, role in world economies. Nature itself is not traditionally considered an actor, certainly not a "rational" one, but it does have legal recognition (e.g. fault doctrine for 'acts of God') and will necessitate preventive actions among nation states.

Meanwhile, Europe's economy is still fragile. Despite the bailout to Greece, the euro faces uncertain prospects from competition with other currencies. In real economic growth, forecasts for the UK, France and other nations are dim with nominal growth in 2010. I think the volcanic eruption and its ensuing economic effects demonstrate how unsteady the European financial and economic systems are. Slight shocks to the system - such as a natural event - have strong repercussions. The continent lacks a coordinated air safety and security mechanism to deal uniformly with such disasters. Tackling the broader economic issues remains a larger task.

Today's Boston Globe articles

1. Airline Economics: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/04/18/airline_carry_on_fee_wheres_the_free_market_spirit/

I agree: the airlines have a legitimate interest in charging for the business expense. Unless the amount gets unconscionable, the federal administrators should look elsewhere for problems.

2. Innovation and Imitation: http://www.boston.com/bostonglobe/ideas/articles/2010/04/18/the_imitation_economy/

Innovation should still trump imitation, in business and in life. Sure, imitation is essential in a mass market economy, but innovation will drive economic growth and human progress.

3. American History: http://www.boston.com/bostonglobe/ideas/articles/2010/04/18/the_charge_is_murder/

I disagree: the facts are too nebulous and scanty to satisfy the legal elements of murder. Involuntary (or even voluntary reckless) manslaughter seem more appropriate, and the solders' trial applied the law correctly in light of the facts.

4. History (books): I'm interested in reading this book, and looking at America through the observer Tocqueville. Though seeing America then and America now may well render me a cynic.

Today's Boston Globe articles

1. Polish Plane Accident: http://www.boston.com/news/world/europe/articles/2010/04/11/the_flower_of_our_nation_has____perished/

All my thoughts and prayers.

2. Supreme Court Nomination: http://www.boston.com/news/nation/washington/articles/2010/04/11/gop_wary_of_waging_fierce_fight_over_supreme_court_choice/

I don't think the nomination battle will be a major or thorny issue at all, especially with legislation pending. Nonetheless, if Obama picks a prospective Justice too far left, he will encounter significant resistance.

3. Academics in China: http://www.boston.com/news/world/asia/articles/2010/04/11/in_china_academic_cheating_is_rampant/

China faces the persistent issue of authenticity, which will hamper future intellectual progress and stems from its pervasive corruption and lack of respect for open, truthful interchange of ideas.

4. Israel Policy: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/04/11/support_for_israel_runs_on_party_lines/

I agree: Republicans are doubtless more pro-Israel; even so, the Israel foreign policy question is among the few that can enjoy bipartisan support.

5. Environmentalism and Farming: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/04/11/green_thumbs/

I somewhat agree: organic farming isn't as environmentally savvy as it seems to be. But I am unconvinced that GE crops are conclusively more environmentally friendly; organic crops do have benefits of their own.

6. Computer Security: http://www.boston.com/bostonglobe/ideas/articles/2010/04/11/please_do_not_change_your_password/

Good advice, and solid analysis. Time is a cost input (hassle is the output) than neutralizes many gains of changing passwords so often. Routine automatic security devices such as antivirus protection are more useful.

7. History of Slavery: http://www.boston.com/bostonglobe/ideas/articles/2010/04/11/when_boston_awoke/

Too much emphasis is placed on this one incident: the Fugitive Slave Act in the Compromise of 1850 was the actual cause that motivated many northerners to take an active stance against slavery. Nonetheless, credit must be given to Boston as the cradle of abolitionism, a bright spot in the city's overall negative history with race.

8. British English: http://www.boston.com/bostonglobe/ideas/articles/2010/04/11/brit_is_it/

I agree: enough already, there is nothing wrong with Britishisms. The English language grows by sharing and mixing regional idioms. Time for my tea and biscuits.

Still disbelieving climate change?

I am no scientist, but I am reasonable enough to accept wholeheartedly that climate change exists and is serious. Recent events should convince anyone that global warming and its related effects are affecting our everyday lives. For instance, today's temperature in New York is not just hot; it is unusually so. Our office had to turn on the air conditioning, and I skipped going out for lunch because of the warm weather. Such temperatures in the upper 80s F should not happen in early April. Disbelievers point to the abnormally cold temperatures this past winter, but the truth is: it is not one exceedingly cold or hot period that matters, but the intensity of cold or hot weather. The fact that more extreme temperatures exist - the bitter cold in December 2009 and the excessive warmth in late March and early April - should be the telling evidence.

Furthermore, 2010 saw an increasing number of natural disasters, notably the Haiti earthquake and others in Chile, Baja California and Sumatra. One should not dismiss them as random events in disaster-prone regions. Earthquakes, like all natural processes, have underlying causes (here, mainly tectonic plate movements). But human influences - such as nitrification, global warming, and land misuse - have trickle effects that may affect the presence of earthquakes and other natural disasters. I am not versed enough in earth science to offer concrete examples, but knowing how the earth's processes influence one another and ecosystems large and remote, the human link is significant.

The public and politicians need to realize how serious climate change and environmental issues are. These phenomena have inimical effects for everyone, individuals and nation-states. Moreover, our posterity will be the ones to clean up the mess. By then, it might be too late. April's edition of the Scientific American lists global warming, biodiversity loss and nitrogen abuse as the three environmental issues that have exceeded viable capacities. Other problems such as freshwater use and land management are approaching perilous levels. We must act now to not only control the status quo, but also reverse many of the damaging effects of human economic activities. Sacrifices will need to be made, but better sacrifice some now rather than mortgage our future and that of later generations.

Today's Boston Globe articles

1. Health Care: http://www.boston.com/news/health/articles/2010/04/04/short_term_customers_boosting_health_costs/

This is a problem, and contributes to driving up costs. Regulators should include rules that make it difficult to acquire insurance only for brief catastrophic losses.

2. Public Discourse: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2010/04/04/too_much_expletive_vulgarity/

I agree - many of the expletives, including the f- word, are unsuitable for public discourse, especially by those we hold to be of high esteem. Better manners in speech should be expected of us all.

3. Easter: http://www.boston.com/bostonglobe/editorial_opinion/editorials/articles/2010/04/04/a_feast_across_many_divides/

A good observation, but the secular and commercial aspects of the holiday, e.g. the Easter bunny, are the actual drivers across the divide.

4. Popular Culture: http://www.boston.com/ae/tv/articles/2010/04/04/comebacks_are_a_plotline_and_a_lifeline_of_pop_culture_these_days/

I guess we are used to giving one another second chances to remedy wrongs. It's part of our nature. We would hold the same for celebrities, however heinous their lack of judgment.

5. Anti-corruption: http://www.boston.com/bostonglobe/ideas/articles/2010/04/04/bribe_fighter/

I still do not see how this works, although empirically it seems sound. Handing a venal official a "zero rupee note" hardly seems to be a financial incentive or legal sanction that influences major behavioral change.

6. Anti-obesity: http://www.boston.com/bostonglobe/magazine/articles/2010/04/04/getting_chefs_to_pass_up_the_salt/

Yes! Financial incentives, not legal sanctions or voluntary participation. That goes for health care alignment too.