Now that much of the dust has settled on Cambridge Analytica‘s misuse of Facebook users data the sad story can now be told. It is critical to note upfront that Facebook was not hacked and that the information that was misused was provided voluntarily by Facebook Users. The only breach […]
After limited debate the US Senate overwhelmingly approved a further reduction in “Dodd-Frank” banking regulations introduced in 2010 to avoid another 2008 style bank generated economic collapse.
Dodd-Frank‘s primary mechanism for doing this was to require financial institutions that were “too big to fail” to withstand stress tests. The idea being that if your bank was going to need a government bail out in the event of failure, effectively making you and me the banks insurance company, that such banks need to prove that they can withstand large economic downturns by keeping enough cash (and near cash) on hand to cover their immediate debts.
If banks pass the stress test, and ALL did in June 2017, they can issue dividends and buy back their own stock (financial engineering to raise their own stock price). If they fail, they can’t. The results and some key details are published so both the markets and individual investors know which banks are stable and which ones are not.
The principle Dodd-Frank change passed in March 2018, was to increase the threshold needed to be included in the stress test, from $50B to $250B.
Banks and other large financial institutions are not evil corporations but they are run by greedy people just like you and me. When those people are given massive incentives to bring in large amounts of income to the banks, they are likely to take risks that are absurd in retrospect, just likely they did in the 2000’s.
When the money that is risked belongs only to shareholder, employees, and board members, there is not public issue with those risks; even ‘crazy’ ones. The problem occurs when the company (bank) in question is so large that if it fails it will bring down the countries (globe’s?) economy. This is also called “systemic risk“. Such a failure cannot be allowed to occur, so governments step and transfer your tax money to those companies.
Put simply, if you are ‘too big to fail’, the public has a right to validate your stability.
While laws must be periodically updated to keep up with the products offered for sale and global political / financial environment, the problem with the March 2018 changes is that they are all reductions:
While testifying on NAFTA in front of the US Senate Foreign Relations Committee, former Canadian Prime Minister told them:
“Canada is privileged to have the United States as a neighbor and friend. And the United States should thank its lucky stars, everyday, that they have Canada on their northern boarder.
This is is the most successful and peaceful bilateral agreement in world history”
“Canada is privileged to have the United States as a neighbor and friend. And the United States should thank its lucky stars, everyday, that they have Canada on their northern boarder.
This is is the most successful and peaceful bilateral agreement in world history”
Multinational trade negotiations are often accused being a closed door mess with a never ending series of mistakes, but Canadian negotiating strategies on NAFTA have been very successful.
Successful is a subjective word and this site aims to keep to the facts and avoid too much opinion, so let’s define success. In the context NAFTA negotiations, success is defined as a trade agreement that is as favorable to your country as possible, with least amount of drama.
Canada, so far, has been “walking softly and carrying a big stick” with the following successful tactics:
1. Starting Negotiations With Demands: Canada laid out its criteria early in the process. This instantly gave the Canadian negotiators important bargaining chips to potentially throw in at the end to close a deal. Things like the dispute mechanisms and protecting the Dairy industry make great domestic politics, which bolsters your position with the other side, but are “nice to haves” and not truly critical to the success of a final deal.
2. Quietly Racking Up Negotiating Chips: In Canada’s case starting superficially unrelated proceedings, like attacking Boeing’s now demonstrably malicious claim against Bombardier, and starting a WTO claim against the US’ unfair trade practices, gives Canadian negotiators more “chips” to bargain with. Massive deals like NAFTA often include side arrangements to terminate other proceedings.
First world governments around the world, including Canada have come down on the side of Net Neutrality (the idea that internet providers can not advance or block one website or stream). The notable exception to this is the United States under President Trump’s appointed FCC leader (and former Verizon executive) Ajit Pai, which has eliminated the Obama era rules protecting an open internet in December 2017.
The Republican / Ajit Pai / Trump argument is that the infrastructure is owned by the internet providers so they should be able to do what they want with it. The opposing view, held by most citizens is that the internet is like electricity or a phone; charge for the service but it is not the providers concern what is or is not connected.