Edward Yingling of the American Bankers Association roars about the horrors of an agency to protect consumers from his rapacious members.

However, we believe the Administration’s proposal is so vast and controversial that it will be extremely difficult to enact and will produce great uncertainty in the financial markets and among financial regulators while it is pending. It needlessly rips apart all the existing regulatory agencies, eliminates charter choices and creates a new agency with powers to mandate loans and services that go well beyond consumer protection.

He tells the NYT:

“You are talking about an agency that is authorized to design financial products and, in fact, say that they must be offered first, over the banks’ own products,” said Mr. Yingling.

Sure sounds like socialism to me. It also sounds like Richard Whitney, then President of the NYSE, speaking in 1934 to the Wall Street Journal, which provides this link
to an old article.

Pointing out that in many respectss it deals with matters that are already covered by rules of the New York Stock Exchange, Richard Whitney, president of the Exchange, in a statement issued last night on the proposed National Securities Exchange act of 1934, said that the bill contains provisions which would impair the liquidity of American securities, that it would operate particularly against members doing business in small financial centers, that it would destroy the odd-lot business and that it would probably prove so burdensome to many corporations that the latter would be unwilling to keep their securities listed on any exchange.

Richard Whitney turned out to be one of the Bernie Madoffs of his day, and spent over three years at Sing Sing for embezzlement.

Other Wall Streeters read from that old playbook:

"Regulatory reforms will bring about the end of ‘light-touch’ regulation," Philip Finch, an analyst at UBS AG, wrote in a note to clients. "The future will be one of lower average return on equity," a measure of profits.

You’d almost think these guys played no role in the great crash of 1929 2008.

I’m sure they will rest easier knowing that President Obama is really concerned about their problems. He wants to regulate with a light touch, he tells the WSJ:

The right rules, he said, will allow a recovery that isn’t built on speculative bubbles — and that don’t stifle financial marketplace innovations that have helped lots of small guys in recent years.

I hope all of you will provide examples of the way all that lovely financial innovation has helped you. Extra points for the people who were helped by credit default swaps.