Mr. Kuttner obviously has not read Dodd’s 1400 page masterpiece enough to know that it allows for bailouts in perpetuity (pg 1379). I haven’t even gotten all the way through the book on financial reform and I already know that creating a new government agency with a $500 BILLION DOLLAR YEARLY budget to keep track of every single financial transaction known to mankind, invest money, and then report on the firms they have invested in probably isn’t the best idea. This could be one of the reasons why Barry isn’t budging when it comes to ‘financial reform’. I’m sure there are more progressive ideas tucked inside this bill.
From Robert Kuttner (HuffPo):
Although Senate Banking Committee Chair Chris Dodd and his sometime Republican ally Richard Shelby continued to make noises on the Sunday talk shows about a possible bipartisan deal, both President Obama and House Financial Services Chairman Barney Frank have personally urged Dodd not to cut a deal with Republicans. I asked Frank point blank why Dodd would want such a deal, and he said–on the record–“I have no idea, but both President Obama and I have urged him not to.”
This is a welcome sign that Obama realizes that public opinion is moving in the direction of tougher banking reform, and that he learned from the health debate that bipartisan compromise on key reform issues is a snare and a delusion. Kudos to Chairman Frank and to the President.
America needed healthcare reform; what did we get? A new revenue stream for the government and no healthcare. America needs financial reform; what are we going to get? A government lockdown, excessive waste and fraud, a hackers wetdream, and bailouts. I’ll pass (again!).
Assuming that Dodd doesn’t cave, the Democrats still need 60 votes if Republicans decide to filibuster the motion to take up the bill. But with tide turning strongly against coddling Wall Street, it is hard to imagine that a few Republicans won’t break ranks. If so, there may be no filibuster at all.
Americans aren’t as concerned about Wall Street as they are about a few megabanks, the millions flowing from those banks to politicians, and the Obama administration’s handling of this and other domestic issues.
Bottom line: If the Senate Democratic Leadership can resist the snake oil of a bipartisan deal and if Obama personally works the phones and takes control of his own administration, the bill will probably get stronger as it works its way through Congress. This is the right kind of bipartisanship–a progressive bill so clearly demanded by public opinion that many Republicans don’t dare to oppose it. (emphasis mine)
Even so, this bill is far from the final chapter of reform. While banks will not be able to do quite as much damage to the rest of the economy, entire areas of abuse such as credit rating agencies, hedge funds, and private equity are largely untouched and the basic business model of the financial conglomerates will be only partly constrained. Real mortgage relief is also put off for another day.
A little history is reassuring. For all of his personal resolve, it took Franklin Roosevelt seven years and several pieces of landmark legislation to complete the New Deal structure of financial regulation that kept Wall Street well harnessed until the late 1970s – including the Securities Act of 1933, the Securities Exchange Act of 1934, the Public Utility Holding Act of 1935, ending with the Investment Company Act of 1940. Even in that golden age of reform, Wall Street wasn’t tamed in a day.
I think I am going to be ill.