Pig Party Punts on Financial Reform

The GOP, realizing that not even their own party believes the leadership lies on Financial Reform has pulled a cowardly about face and are now trying to take credit for it.

It seems like maybe the tactic of defending Wall Street and obstructing reform isn’t something that the GOP caucus is staying united behind.

Senate Minority Leader Mitch McConnell struck a markedly different tone on financial regulatory reform today, suggesting an agreement could be struck with Democrats sooner rather than later. And Democrats have taken notice.

"We believe the process to achieve [a bipartisan bill] has now been reconstituted," McConnell told reporters after the Republicans’ weekly caucus meeting this afternoon. "We are all confident that this can be fixed… Senator Shelby [the Republicans’ chief financial reform negotiator] believes that there’s been a very serious effort to re-engage."

McConnell of course gave credit to his letter signed by all 41 Republicans saying they were opposed to the bill as the kickstart for negotiations. To which Democrats respond that negotiations never stopped.

"Talk about taking people taking credit for things–that’s like the rooster taking credit for the morning," Sen. Chris Dodd (D-CT), the Democrats’ reg reform point man, told reporters after a caucus meeting. "This has been ongoing for people who have been following this thing. Welcome to the discussion…. Where has the [Republican] leader been?"

… [emphasis added]

Inserted from <Daily Kos>

Where has Bitch been?  He’s been being bought, that’s where!

Rachel Maddow and Chris Hayes analyze.

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Now that the Republicans are on the ropes, we should take the opportunity to push for more real reform. Robert Reich has some good ideas.

…The Dodd bill now being considered in the Senate is a step in the right direction. Yet despite the hype, it’s a very modest step. It leaves out three of the most important things necessary to prevent a repeat of the Wall Street meltdown:

1. Require that trading of all derivatives be done on open exchanges where parties have to disclose what they’re buying and selling and have enough capital to pay up if their bets go wrong. The exception in the current bill for so-called "unique" derivatives opens up a loophole big enough for bankers to drive their Ferrari’s through.
2. Resurrect the Glass-Steagall Act in its entirety so commercial banks are separated from investment banks. The current bill doesn’t go nearly far enough. Commercial banks should take deposits and lend money. Investment banks should be limited to the casino we call the stock market, helping companies issue new issues and making bets. Nothing good comes of mixing the two. We learned this after the Great Crash of 1929, and then forgot it in 1999 when Congress allowed financial supermarkets to do both.
3. Cap the size of big banks at $100 billion in assets. The current bill doesn’t limit the size of banks at all. It creates a process for winding down the operations of any bank that gets into trouble. But if several big banks are threatened, as they were when the housing bubble burst, their failure would pose a risk to the whole financial system, and Congress and the Fed would surely have to bail them out. The only way to ensure no bank is too big to fail is to make sure no bank is too big, period. Nobody has been able to show any scale efficiencies over $100 billion in assets, so that should be the limit.

 

Wall Street doesn’t want these three major reforms because they’d cut deeply into profits…[emphasis added]

Inserted from <Huffington Post>

To these I would add two more.

Require that no Bankster be employed in an oversight role (including the current crop).

Move the CFPA out of the Fed and make its director a cabinet level post.