What President Obama Didn't Say at Federal Hall

September 14, 2009

I just listened to President Obama's speech at Federal Hall about the anniversary of the Lehman collapse and the need for regulatory reform.  It was a fine speech replete with thoughtful phrases and high-minded ideals. However, the time for talk has passed. Now, we need much more than words. We need action.

In his introductory remarks, the President expressed his admiration for Secretary of the Treasury Timothy Geithner, Christina Romer, Paul Volcker, and Barney Frank. Oddly, during his historic remarks on regulatory reform, the President did not mention present Securities and Exchange Commission Chair Mary Schapiro, present Commodity Futures Trading Commission Chair Gary Gensler, and the Financial Industry Regulatory Authority Chair Richard Ketchum.  

What should we infer from the failure to reference those regulators? If the omissions were Freudian slips, then they are telling ones.  What is the Obama vision for meaningful regulatory reform that does not include the SEC, CFTC, and FINRA?  Don't get me wrong -- I welcome the abolition of both the SEC and FINRA and I desire their replacement with a far more effective securities regulator.  Still -- was the President's failure to reference those three regulators intentional or inadvertent?  Fascinating. 

I was glad to hear the President promise that we will not go back to the days of reckless behavior and unchecked appetites. I applaud the President's call for strong rules of the road, and particularly those that do not stifle innovation or enterprise.  Moreover, his promise of transparency and accountability is exactly what we need. 

As the expression goes: Talk is cheap.  The challenge for the President is to translate his fine words into concrete action.