Dodd-Frank: death by a thousand cuts
by digby
President Obama wants to consign the financial crisis to the past and delegate the implementation of financial reform to others in his administration. But he needs to get personally involved. Why? Because Senator Carl Levin’s recent hearing on the JP Morgan Whale showed that nothing has changed at the largest banks or the bank regulatory agencies since the run up to the financial crisis. In the early months of 2012—two years after passage of the Dodd-Frank Act—JP Morgan acted deceptively, regulators remained clueless, and investors were the last to know about the true magnitude of the bank’s $6.2 billion in losses. Nevertheless, Republicans and some Democrats in Congress are today working to repeal reforms.
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Is it too soon for President Obama to care? After all, it’s just one committee in the House. But this is precisely how momentum developed for passage of the JOBS Act, which loosened securities regulations for small companies, and which former securities regulators had harshly condemned during congressional consideration. The White House sat silent, Democrats joined to support the bill in the House, and it became too difficult, too late, for reform-minded Democratic Senators to improve its most egregious provisions. In yet another disappointment to those who care about preventing securities fraud, President Obama signed the JOBS Act, even over the (belated and weak) objection of his own SEC Chairman.If the Treasury Department or White House do not weigh in strongly and soon against House efforts to undermine Dodd-Frank derivative provisions, the limited gains in Dodd-Frank may begin to recede. If Wall Street proponents succeed in passing this wave of Dodd-Frank “fix it” bills, more will follow. Wall Street reform is a legacy issue for the president. Does he really want a derivative deregulation bill to reach his desk in the coming months?
That’s a perfect description of the dynamic that’s destroying us. Still, even if he doesn’t want this (and I have no idea if that’s the case) I’m told by many important people that the President has no power to do anything and nothing he says has any effect so I suppose all he can do is sign whatever they pass. Too bad.
We can however, pressure some Democrats in congress. They have to face voters in a year and a half. I know the work of doing that is boring and unglamorous. But it might be worth something to try.
Here’s Howie, with a look at one of the worst offenders:
[A]nother Steve Israel announcement this week was that Connecticut New Dem vice-chair, Jim Himes (CT) is the new National Finance Chair, replacing another New Dem vice chair, Alysson Schwartz, who can’t raise money for the DCCC because she’s using every contact she knows to raise money for her gubernatorial race against Tom Corbett in Pennsylvania. Himes has been a shady character on the House Financial Services Committee, routinely voting with the GOP to undermine Wall Street bankster reforms. I was dismayed when I learned that his chief of staff, Jason Cole, is a former UBS lobbyist. Remember when Blanche Lincoln– now a lobbyist, then a U.S. Senator being primaried intensely– introduced an anti-bankster derivatives amendment to try to get progressives to stop donating to her opponent? Himes teamed up with a GOP bankster shill, Randy Hultgren to introduce a bill to repeal it. Himes tried the same thing last year at this time (with Republican Nan Hayworth, who was subsequently defeated by the voters in her district. I bet that makes Steve Israel and Joe Crowley dance for joy– as well as the entire GOP.
This week, a Himes staffer proudly anounced that “Reps. Hultgren and Himes will introduce a bill Wednesday– with bipartisan co-sponsors on the Agriculture Committee– to modify the swaps ‘push out’ provision in Dodd-Frank. The bill will mirror the final version that the committee reported last Congress (as amended by Mr. Himes).” Companion legislation is expected in the Senate. Federal Reserve Chairman Ben Bernanke was supportive of the change, which would allow banks to keep commodity and equity derivatives in federally insured units, during testimony to the Senate last week.”
And, by the way, Himes hasn’t signed the Grayson-Takano letter that pledges “we will vote against any and every cut to Medicare, Medicaid, or Social Security benefits– including raising the retirement age or cutting the cost of living adjustments that our constituents earned and need.” Neither has anyone on Steve Israel’s list of Frontline candidates. If you were thinking of making a political contribution, please consider making it here, not to the DCCC. As Grayson explained, “With the Norquist pledge, the Republicans have lined up on the side of millionaires, billionaires and multinational corporations. With our No Cuts pledge, we are lined up on the side of seniors, sick people, and poor people. We are comforting the afflicted, and they are comforting the comfortable.”
I wish there weren’t so many Democrats spending so much time comforting the comfortable along with them.
No kidding.
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