Financial Reform, the latest dog and pony show. [View All]

[MadHound]

Much like they did with Health Care Reform, the Senate has served up a package of incremental change and declared it revolutionary. Though imposing some cosmetic measures to the regulation of the financial sector, Congress has failed to take a firm stand against the most egregious practices of the industry. Here, from Russ Feingold, is a list of what the Senate failed to do:

"Feingold cosponsored a number of key amendments to ensure that banks are no longer too big to fail, and that depression-era reforms to create a firewall between Wall Street and Main Street are restored, among other critical issues. None of these amendments were included in the final bill, which is why it failed Feingold’s test for real reform. Amendments Feingold cosponsored included:

* Cantwell-McCain-Feingold amendment to restore the Glass-Steagall firewall between Wall Street and Main Street
* Senator Dorgan’s “too big to fail” amendment, which requires that no financial entity be permitted to become so large that its failure threatens the financial stability of the U.S.
* Brown-Kaufman amendment proposing strict limits on the size of financial institutions
* Dorgan amendment to ban so-called naked credit default swaps, speculative bets that played a role in the economic crisis
* Merkley-Levin amendment to prohibit any bank with government insured deposits from engaging in high-risk finance, like investing in hedge funds or private equity funds"

<http://www.commondreams.org/newswire/2010/05/20-17>

Furthermore, the voted down an amendment to rein in out of control credit card rates
<http://www.senate.gov/legislative/LIS/roll_call_lists/roll_call_vote_cfm.cfm?congress=111&session=2&vote=00159>

Furthermore, they didn't do a thing to try and control the payday loan industry.
<http://www.wdnweb.com/articles/2010/05/21/news/doc4bf476ed5a759324480427.txt>

Already the spin is starting, that this is the most sweeping "reform" since the Great Depression. Well, frankly, given the reform efforts that were undertaken since the Great Depression, that isn't saying much. The mechanisms put in place by FDR provided an excellent bulwark against the financial industry through WWII and into the the sixties. There was no need for massive sweeping reform. Then came the seventies, eighties, nineties and aughts, and the trend was for deregulation. So basically, Congress could have passed a bare minimum bill, called it financial reform, and it would be "the biggest reform bill since the Great Depression." And that's exactly what they did.

Congress, much as with HCR put on a dog and pony show with financial reform, and gave us a bill that does little to reform a corrupt system, all so they can claim some sort of victory. Victory for who? Certainly not the American people who are going to continue to be exposed to the worst practices of the financial sector. No, this is a paper victory, something that those who are facing elections this fall can trot out at the campaign speeches saying "I voted for financial reform," all the while the financial sector is continuing to run out of control.

There will be some who say that this is the best we could get in this political climate, again, much like HCR. Yet as we saw with the dropped public option, there is broad public support for financial regulation. Voting to rein in the financial sector, much like voting for the public option, isn't an unpopular move. It seems that the failure of this bill doesn't lie with the political will of the people, but rather with the political will of the Democrats in Congress and the White House.

So here in about ten years or so, we're going to go through another massive financial crisis. We're going to find out that the financial sector has once again played us all for suckers, and it is we who will be paying again. And you know what, the blame will lie squarely with this Congress, this administration, because today they have failed to protect us.