Economy Hot Docs: Americans Insecure About Finances, Financial Regulations Out of Date

Poll: Majority Expect Economy to Get Worse: Fifty-two percent of Americans think the economy will get worse this year, a new poll finds. The Harris Poll, which surveyed 2,388 adults online between December 9 and 15, found that just 12 percent felt more secure about their financial situation. Heading into 2008, that number was 21 percent. The survey also finds that 55 percent said they expect to cut back on household expenses, 45 percent hope to pay down their debt, and 24 percent plan to get rid of one or more credit cards. The survey reveals little difference between Democrats and Republicans. Fifty percent of Republicans expect the economy to get worse, compared with 52 percent of Democrats. Republicans and Democrats, by an equal margin of 27 percentage points, expect their personal finances to worsen this year.

Framework Offered for Financial Regulation: The nation's financial regulatory system is a fragmented and complex mix of state and federal rules put in place over the past 150 years and is out of touch with current financial markets, a government report finds. The Government Accountability Office report, "Financial Regulation: A Framework for Crafting and Assessing Proposals to Modernize the Outdated U.S. Financial Regulatory System," concludes that the current system "appears to be ill-suited to meet the nation's needs in the 21st century" and notes that much of it was developed in response to previous financial crises. The report recommends that new regulations be comprehensive and flexible with a systemwide focus, offer consumer and investor protection, provide regulators with independence and authority, have consistent oversight, and cause minimal taxpayer exposure.

Proposed Bailout Amendments Outlined: A set of proposed amendments to the Troubled Assets Relief Program would place stringent new requirements on recipients of federal bailout funds and bring it more in line with regulations placed on automakers, according to an outline of a new bill being proposed by House Financial Services Committee Chairman Barney Frank. The measure is designed to "strengthen accountability, close loopholes, [and] increase transparency." If the provisions should become law, most new recipients of TARP funds will have to agree to prohibitions on golden parachutes, divest themselves of private aircraft or leases, and accept executive compensation requirements that were included in the auto bailout bill. The measure would also provide "authority to Treasury to apply these expanded executive compensation provisions retroactively to existing recipients of direct assistance."

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