The ridiculous Mr. Frank

Just because Barney Frank is threatened by a possible disadvantage the US could face when it implements the mountain of regulations it is putting forth, he decided he would threat the rest of the world and suggest that international groups will be excluded from doing business with the US and US banks will be banned from transacting with other countries unless they follow suit with a liberal agenda.

From the FT:

“Once we have rules  . . . we will say to anybody who wants to be an outlier, ‘you forfeit your right to participate in the American system’,” Mr Frank told the Financial Times. “We will instruct the [Securities and Exchange Commission] and Treasury and the Fed to deny access to the American financial system to any country that holds itself out as a haven to escape our financial regulation.”

This is taking US leadership to a whole new level. A ridiculous level at that.  I echo what the others on the FT report said:

“It is absolutely the wrong approach,” said a top industry lawyer, who did not want to be identified criticising Mr Frank. “The assumption is that everybody has to do business in the US and we can set global standards. That is absolute nonsense. There are alternatives, including Hong Kong,” the lawyer added.

Frank said they are determined to protect the people against outliers. Sure. That OR to prevent the US from losing.

Some thoughts:

  1. His proposal reminded of Bush’s “Either you’re with us or against us” statement.
  2. Sure, US is the biggest market but what makes him think everyone wants to do business with the US? China’s just hanging around.
  3. This is simply the wrong kind of leadership.
  4. Obama himself should reject this proposal because I see this as a financial counterpart of protectionism, or financial protectionism. An extreme form.
  5. He said he will instruct the Treasury and the Fed. I think Ben and Timmy are smart enough to be critics themselves of this proposal.
  6. This has instantly lost my respect for Frank, whom I thought was great in other things – yes despite his being a Dem.

More HERE.

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