McCain is no leader on financial reform

John McCain has announced his intention to, if elected, order Treasury to fully insure deposits at our nations banks. His announcement demonstrates his inability to lead this country out if its current banking crisis.

First, he has shown a lack of understanding of the regulatory structure of the US banking system. Treasury is not the agency that insures deposits. The FDIC is. The FDIC is an independent agency, not a division of Treasury (unlike, say, the OCC), and not dependent on taxpayer funding. By choosing the wrong agency to insure deposits, JM has demonstrated his unfitness to manage this crisis.

Second, his proposal is not novel. It is, in fact, already being implemented. Earlier today, the FDIC, in conjuction with Treasury and the Federal Reserve, announced the Temproary Liquidity Guarantee Program. Under the plan, certain newly issued senior unsecured debt issued on or before June 30, 2009, would be fully protected in the event the issuing institution subsequently fails. In addition, any participating depository institution will be able to provide full deposit insurance coverage for non-interest bearing deposit transaction accounts, regardless of dollar amount. This new, temporary guarantee—which expires at the end of 2009—will help stabilize these accounts.

What is important about this? Well, it shows that JM has got no legitimate claim to leadership on this issue. Fully insuring deposits is not novel--it is a mere echo of what the European Banks announced over the last two weeks. That's not leadership. (In fact, all it does is stop the bleeding, preventing depositors from moving their money to the european banks. It is a tough sell to claim leadership when you are merely the last player to enter a race to the bottom.) Next, it shows that, far from leading the US out of crisis, he's not even a participant. In announcing a plan that's already being implemented, he shows us that he has no idea what the regulators are currently doing. He's neither an innovator, or a leader. In fact, the crisis and the government's response to it are moving right along under his radar. That's not leadership. It's ignorance.
http://www.fdic.gov/news/news/press/2008/pr08100.html

Shorter Scalia:

If we don't suspend the constitution whenever the president wants, we're all gonna die (pdf)!

Medellin v. Texas

Thank you SCOTUS for gutting the Supremacy Clause.

Just as I suspected!

As I predicted, I haven't kept up my blogging! It's scary how accurate my predictions can be...

Sorry I've been missing

Unfortunately, I will remain missing for another month or so. By then, I will have finished my dissertation, taken the bar exam, and will be just settling in to my new home and clerkship. Since I have no subscribers right now, I trust my absence will go unnoticed. take care!

Welcome to my law and philosophy blog

"When it comes to the law, nothin' is understood." So says Dragline, the character played by George Kennedy in Cool Hand Luke. As I finish up law school, and prepare to start my clerkship, wherein my colleagues and I will labor under the fiction that law is quite well understood, Dragline's quip, used to settle a dispute in a wager, seems extremely apt. He argues that the indeterminacy of law makes his interpetation, rather than any other, the authoritative one. This form of reasoning is not novel nor, unfortunately, is it all that rare. But I will do my best to avoid it, so far as possible, in my posts here.


So, welcome here. I'll try to put up a substantive post soon, perhaps about Adam Liptak's article in today's NYTimes, Are Law Reviews Irrelevant? [Times Select].