Tuesday, November 29, 2011

Jon Huntsman's Big Idea

This quote is from Joe Klein on page 25 in the December 5th 2011 Time magazine.
begin quote:
"We have to restore trust,"Huntsman said,"Trust in the Congress, the Executive Branch and Wall Street, where we can no longer tolerate banks that are too big to fail." end quote.

This idea is likely one that will resonate with voters everywhere if they actually have time to think about it. Because the banks have already been bailed out once. Because they have not really been reformed through useful new laws and restrictions,  we the taxpayers might have to bail them out again within the next 5 years or so. Since the taxpayers cannot afford to do that, banks too big to fail shouldn't be allowed to exist (at least in their present form). Because to do that might cause the financial ruin of the whole nation. (Hence the statement "too big to fail" since any one of these top 6 banks might take the whole nation down financially  if they were to fail)

Begin 2nd quote:
"Specifically, he wants to impose a stiff fee on the top 6 banks, which hold assets that equal almost 65% of America's GDP. The money would go to reduce corporate taxes on companies in the nonfinancial sector, part of Huntsman's larger plan to revive U.S. manufacturing."

So, the former Ambassador to China (2009 to 2011) from the United States and the Governor of Utah
(2005 to 2009) demonstrates his credibility to the voters in the U.S. because of this one idea. This likely is his most useful idea so far as a Republican Presidential candidate.

later: I found this article about several banks getting their credit downgraded by the S&P partly because of their exposure to Europe and the Euro. We may witness one of the too big to fail banks fail yet this year or next the way this sounds. I hope I'm wrong:


NEW YORK (AP) — Standard & Poor's Ratings Services has lowered its credit ratings for many of the world's largest financial institutions, including the biggest banks in the U.S.
Bank of America Corp. and its main subsidiaries are among the institutions whose ratings fell at least one notch Tuesday, along with Citigroup Inc., Goldman Sachs Group Inc., JPMorgan Chase & Co., Morgan Stanley and Wells Fargo & Co.
S&P said the changes in 37 financial companies' ratings reflect the firm's new criteria for banks, and they incorporate shifts in the industry and the role of governments and central banks worldwide. The agency did not release its evaluation of each company but said it plans to discuss the changes during a conference call early Wednesday.
Bank of America's issuer credit rating was cut to "A-" from "A," as were its Countrywide Financial Corp. and Merrill Lynch & Co. Inc. units, along with a series of related subsidiaries
Ratings downgrades are never seen as positive, but this round may be particularly damaging for Bank of America.
Concern already was growing Tuesday about whether B of A has enough capital to withstand another downturn in the U.S. economy or further trouble in Europe, and the bank's stock fell to a two-year low before the ratings announcement. end quote.

No comments: