Probably I accept elimination of the rule that financial companies must offer plain vanilla products for a different reason, since he isn’t as ignorant as I am, but I would think that with a plain vanilly requirement, banks would offer plain vanilla products on terrible terrible terms. 30 year mortgage OK but the interest rate is 10% per year say.
To the extent that people use the plain vanilla product to judge the fudge swirl products, this will trick them into thinking that fudge swirl is great for their health. In fact, I’m amazed that bankers aren’t already using that scam.
Now to be franker than Frank, I assume there is a back room deal in which the finance lobby agrees not to use extreme methods to fight other reforms so long as the plain vanilla is in the trash can. I mean the arguments made in public by politicians are justifications of decisions which are often made for other reasons.
Explanations of what the hell I’m talking about after the jump.
“plain vanilla adj applied to financial services. It means like your father’s financial services for example 30 year fixed rate mortgages or you borrow at exactly 20% no matter what credit cards. It was proposed that financial service companies be required to offer such products. Somehow that provision has been deleted from proposed reforms.
Fudge swirl adj. an alternative to plain vanilla. Does *not* imply that financial service companies will necessarily mislead with confusing technical truths and near truths until customers heads spin if they don’t just sell plain vanilla products. Any such inference falsely ascribes an attitude of reflexive hatred of financiers to Robert Waldmann
some one of whose best friends is a hedge fund manager.
Frank: noun corresponds to the adjective frank and to the chairman of the house banking committee.
The only proof that it is possible to be simultaneously intelligent honest and a congressman. Just argued
I remember the days when the bars had to serve food if they were going to serve liquor, and they served [the most] God awful food known to human beings, and I think you know trying to force someone to do good is a very, very qualitatively different, and I think often futile, effort, rather than preventing [someone] from doing bad.
As noted above, I find that argument convincing, but I doubt that representative Frank does.
Frankly I’m with Frank: truely obscure outdated pop reference to the lil Abner comic strip.
Shmoo: a creature in lil Abner. State of stressed yeast cells which enables them to survive stressful conditions, and a fundamental false assumption in growth and real business cycle theory which caused economist in Cambridge UK (who did not have acces to lil Abner) to have a cow (which is not a shmoo).