Today in the Economic Clusterfucktastrophe...

Geithner Calls for Major Overhaul of Financial Rules (emphasis mine):

The Obama administration on Thursday detailed its wide-ranging plan to overhaul financial regulation by subjecting hedge funds and traders of exotic financial instruments, now among the biggest and most freewheeling players on Wall Street, to potentially strict new government supervision.

The Treasury secretary, Timothy F. Geithner, outlined the plan Thursday before the House Financial Services Committee, where he got a decidedly mixed reception. He said the changes were needed to fix a badly flawed system that was exposed by the current financial crisis. Mr. Geithner, in his opening statement, called for "comprehensive reform. Not modest repairs at the margin, but new rules of the game."

"Very complex, very consequential, very difficult" Mr. Geithner called the changes that he said were necessary, and the sooner the better.

Included in the plan would be the establishment of one single agency "with responsibility for systemic stability over the major institutions and critical payment and settlement systems and activities."

To that end, Mr. Geithner said: "Financial products and institutions should be regulated for the economic function they provide and the risks they present, not the legal form they take," Mr. Geithner said. "We can't allow institutions to cherry pick among competing regulators, and shift risk to where it faces the lowest standards and constraints."

Naturally, the GOP is already moaning about this proposal, even in its nascent form, without a hint of irony that their plan, aka Project Deregulation: Gilded Age Reloaded, is what got us into this mess in the first place, so they really ought to just STFU at this point.

In good news, I'm glad to see the national discussion increasingly focusing on the institutional corruption in our financial system and moving away from stupidly simplistic finger-pointing at American homeowners, those legions of strawwo/men who all defaulted on mortgages because of wanton greed and totally not because of predatory lending, unemployment, medical bills, and/or some combination thereof.