Spitzer: Don't Let The Feds, Banking Lobby Handcuff State Regulators (VIDEO)

The House Financial Services Committee will vote today on whether to establish a Consumer Financial Protection Agency. Former New York Governor, and Attorney General, Eliot Spitzer warned that while this new federal agency is important, it must not come at the expense of handcuffing regulators at the state level, who have been more pro-active in investigating the banks than the feds.

Spitzer argued that the federal government would try to limit the power of the state regulators because of heavy influence from the banking lobby:

Because the banks don't want us looking into what they're doing. We were looking at subprime debt. That was the very issue where the banks went to the OCC, and the OCC went to court to stop us, and we had to fight for years in the courts for the power to look at subprime debt. Meanwhie we've seen what happened.

Spitzer and Ratigan also examined which key provisions need to be in the bill but are being fought by the bank lobby.

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Ratigan also interviewed TARP Inspector General Neil Barofsky on what the true cost of TARP will be, and whether the taxpayer will get their money back. Barofsky is not optimistic:

This idea that we're going to have a 17 percent return or a profit on the TARP is an incredibly unrealistic expectation. $50 billion to the mortgage modification program is not coming back. It's not coming back by design. Tens of billions of dollars to the auto industry - the administration itself acknowledges it's going to be a stretch to get that money back. Plus, uncertainty throughout the other TARP programs. We know that CIT is staggering on bankruptcy. If that goes down that's another $2.2 billion that's going to be lost. So while it's difficult to quantify the [true cost of TARP], I think we have to be more realistic about the likelihood of what it could be.

Barofsky also confirmed that banks like Goldman Sachs can continue to make massive and risky bets at the expense of the taxpayer because the banks still have access to very cheap loans from the government, who will no doubt bail them out if one of their huge bets goes south, because "there has not been meaningful regulatory reform in the financial system."

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Comments

[WakeUpHadEnough]

interestin­g….(Please note that I FIRMLY believe that our representatives are BOUGHT AND PAID for by big banks and corporate interests.)

Between the great depression and the 80’s, our economy grew quite well, high taxes on the very wealthy, good paying union jobs, strong banking regulations, a thriving middle class. After we were told that de-regulation was the answer to our problems (which problems, I’m not sure)we proceeded to do what.....d­eregulate. What do we have now? 1/2 of our manufacturing is gone. Wages have remained stagnant for working folks. Profits and productivity are way up, but wages didn’t follow along. Personal and federal debt skyrocketed. CEO’s went from making 30 times as much as the average floor worker to over 400 times as much. The S&L Bailout…the Japanese banking crisis, the Mexican bail out, the derivatives crisis, the credit crisis, the….ok, ok. Now tell me how it is that over the past 30 years we DE-regulated more and more and yet don’t see the free market doing a good job of correcting itself? Are you seriously saying that the banks were subjected to so much regulation that they were FORCED to be greedy and criminal? No....the banks OWN the politician­s...Americ­a is a wholy(sp) owned subsidiary of Goldman Sachs, Citi, JP, WellsFargo, etc.

Stop giving the corporate criminals a pass....throw the bums out of washington, but make sure that these CEO's and bankers are chained to them.

[karen1p]

We do this with campaigns that are publically funded! And term limits on all Congressman and Senators. PERIOD!

[truthandreconcilliation]

I agree with your post. What I see though is not just deregulation as the problem but deregulation of the financial industry. Capital moves more freely and is less constrained than the citizenry that build its wealth. We need MORE regulations on money and the financial industry.

-Reinstate glass-steagal
-Obama should revisit Executive Order 11110 issued by JFK but never followed through
-Audit the fed with bill HR-1207 to see exactly where all the nations funds are being funneled
-Revisit NAFTA, GATT and all the trade agreements which have left America a net debtor
-Freeze military spending back to 2000 levels and draw down troops significan­tly...AMER­ICA CANT AFFORD ALL THE WARS ON THE BACK OF ITS CITIZENS (and wars are a part of our expanding debt picture - we simply cant afford it anymore)

[satyriasis]

Well said, dude.

[mojotronix]

Ratigan rocks the house!

[surlyatbest]

Spitzer will make an exception for the furry handcuffs.

[jimme]

I didn't think HP allowed 2 year olds on their website. How did you get on?

[surlyatbest]

Kinda stuffy, aren't ya?

[tellie]

Spitzer went after Wall Street and Wall Street went to the federal Gov't, Bush. Spitzer was brought down by private phone calls being monitored, Patriot Act. Now why would the federal gov't listen in on private phone calls of a New York governor? The gov't followed private transactions that Spitzer was having with his own bank and his own money.

I don't condone Spitzer's actions but I am fearful of a gov't that would bring down a governor that understood what was happening on Wall Street and was trying to prevent what eventually happened. The gov't used the Patriot Act to prevent a Wall Street investigation.

[Lucille]

Bingo!

That's why Spitzer should run again for New York Governor; he'd win.

Spitzer doesn't need "advisors" to help him understand the economic complexities of Wall Street, so he can't be duped.

[karen1p]

I say we put him on as President. Phuque this administration, so tired of the non-action. Get someone in there who won't be bought.

[karen1p]

Of course he was brought down. You see, anyone that goes against the banks, big money will be. That is why Obama has not made this a priority.....no indictments! It is staggering.

[TAIsabel]

How about we start a petition to get Spitzer as head of the SEC and hand deliver it to President Obama?

[AnotherMcIntosh]

Spitzer is not the only one.

The federal government had been tracking the governor of Illinois for years without taking any action until he stood up for the laid off workers at a windows manufacturing plant. No action was taken until he said that the State of Illinois would discontinue doing business with the Bank of America unless that bank stopped obstructing the payment of severance benefits.

The government of Illinois does not have angels on its payroll. And certainly Blagojevich is no angel. Colorful, perhaps, but not an angel.

As soon as he stood up to the bank, they let him know who really runs the country.

[satyriasis]

Finally somebody gets what was really behind Blago being brought down. Not only did they eliminate a friend of labor, but they also sent a message to anyone who takes on bankers, including Obama.

[vippy]

Oil speculators are hitting us again, preventing a recovery:
copied from Businessweek:
Another excuse given is that oil is following the equity market, but that's not how it's supposed to work. The futures market for oil is supposed to be governed by supply and demand, not react sympathetically to speculative moves in equities. In any case, it's been reported widely this year, starting with Der Spiegel's article on July 28, that the excess liquidity put into the system by central banks worldwide, money that was supposed to be put into consumer and business loans, has once again been used for speculation and quick paper profits in stocks and commodities, including oil.
As Washington irony goes, this is a new high-water mark: They've printed money to save our financial institutions, claiming it's there to stimulate a recovery. Yet much of that newly minted money is being used against consumers and small business owners. The money that's supposed to save them in new loans is instead increasing their energy costs through speculation, to the point of devaluing corporate earnings and personal incomes and prohibiting other purchases.
The sad truth is that if oil costs have more than doubled during a period when so little economic growth was taking place, you have to wonder how high the oil market will rise next year, when a real recovery has the chance of taking hold. In that statement lies the fact that this recovery will be stopped again.

[Delaware22]

Always enjoy Dylan's show. Spitzer knows his stuff, and Wall Street was glad to see him go. We've punished him long enough (I'm sure his wife is still making him pay for his crime against her and the kids.), let's get him back in the Sheriff's saddle and let him do what he does best, bust some heads.

[OldTart]

Amen a thousand times over! Let him redeem himself with his unique qualifications and given his lesson in humility. He knows better than anyone how much he compromised his credibility. But I am also very sure that Wall St. pulled every lever it could and the govt. complied to discredit him. Talk about hypocrisy!

[karen1p]

I am so tired of any sexual "scandals" being an issue in politics. It is ludicrious to make this an issue. What people do in the privacy of their own home, hotel is their business. Who cares (other than his spouse) what he does with a prostitute? I don't.

[bynddrvn5]

I have always found this odd, because I have spent a lot of time in the D.C. area. It is a not to well kept secret that just about everyone in Washington is sleeping around with just about everyone other than their spouse.

[unch]

Here is the story of why derivatives are not regulated.
PBS Frontline: Warning, Hero against the Traitors
http://www.pbs.org/wgbh/pages/frontline/warning/

[spinns17]

this is good .thanks

[sparky73]

Spitzer would prefer he was handcuffed! :)

[jimme]

and you know that how ?

[karen1p]

And who the phuque cares!?!

[karen1p]

jack//@$$

[sparky73]

because he likes to bang h00kers glamour shot Karen1p

[ObamAtomic]

Irrelevant his commentaries ,he is a crook, that got a free pass.

He should obey the law and protect the consumers,too late to lecture
or be a beacon of the economy.

Go home ,give some love to your family.

[Lucille]

Spitzer's crime was not thief, it was soliciting a prostitute; he's no crook; all the money he used for his trysts were his own (he’s extremely wealthy).

In fact the real crooks on Wall Street were celebrating the news of Spitzer’s resignation all over Manhattan. The law firm I worked for at the time had many Wall Street clients and both clients and attorneys alike were thrilled. Yet, several months later Wall Street banks began to topple because of their own greed but I believe many people saw it coming because (in New York law firms), extreme layoffs began in mid-September 2008. If I recall correctly, the banks officially went bust in late September/early October 2008.

However, had Elliot Spitzer been in office at the time, law firms specializing in white collar crime would have been very busy, because under Spitzer there would have been many Wall Street executives being indicted. Nor would Spitzer have sanctioned the federal government giving Wall Street banks all that bail out money with few to no conditions whatsoever either.

[karen1p]

What he does with his pen.is. has nothing to do with the job he does elsewhere. Go back to your church and repent for YOUR sins. Leave others indiscretions to themselves.

[october2009]

We don't need "regulatory reform" like the guy says (whatever that means).... We just need the market to work without any government involvement!

Those greedy and reckless companies would've been OUT OF BUSINESS if the market was allowed to work!!!!!!

Why couldn't the politicians just allow bad behavior to get punished? Instead they rewarded bad behavior... Makes no sense whatsoever

[totalliberal]

Neither do you. I thought you were dead Miss Rand. Shrug.

[spinns17]

free markets lol.we tax payers always have to bail these crooks out.the s&l scam ,chrysler,enron,and many more.

[vippy]

And why don't we read that the courts let Jeff Skilling go free and apologized?

[october2009]

They weren't "too big to fail"... They were too big to bailout!

The Federal Reserve Bank needs a thorough audit... We have zero transparency on that very powerful institution...

[AnthonyVolpe]

Spitzer lost his job because of prostitutes and now he's trying to fight the ones running our government. Strange twist of fate...

[spiritpony1]

He lost his job BECAUSE of trying to run them out of gov.--------they knew his weakness, and set him up for the fall-------pretty obvious-----this was all about a "banking" catch------------

[TJCole]

We should just arrest Geithner and Summers, and squeeze them for a plea deal for cooperation and then start locking up these CEO's and Chairmen starting with BoA and Goldman Sachs and AIG..!

[audadvnc]

... or set them up with prostitutes, like they did with Spitzer...

[TJCole]

I hear that, male prostitutes...why not, might as well go all out..!

[Hoverman]

Yes the Gov. have too put regulation against the banks and wall street, their back doing very risky trading again ,when they fail this time the tax payers wont be so forgiving.

[31BlueDog]

Why haven't the AUDITED the FED?

We need quality regulation now!