The New York Times has a long editorial in today's edition entitled "The Middle Class Agenda" with the subtitle "President Obama Knows What Ails the Middle Class. Does He Know How to Fix It?"
Here are their suggestions for "Regulating the Banks":
Mr. Obama said banks are fighting the Dodd-Frank reform 'every inch of the way.'
The question is what he will do to fight back. A good start would be for him to tell the American public whether the law is capable of performing as intended. Is he confident that a major bank on the verge of failure could be successfully dismantled? Is he sure that risky bank trading will be sufficiently curtailed? If he is not confident that the law can work as intended, he must ensure better implementation or call for a revamp of the statute itself.
He can also personally advance specific Dodd-Frank provisions. Republicans are intent on destroying the new Consumer Financial Protection Bureau; Mr. Obama should try to recess appoint his nominee to lead the bureau, Richard Cordray, whom Republicans recently filibustered. Mr. Obama must make clear that he supports a strong Dodd-Frank disclosure rule on the ratio of the pay of chief executives to that of rank-and-file employees. Such disclosure is crucial to changing the corporate norms that have allowed for unjustifiably vast pay discrepancies.
All true, but here's a simpler and, frankly, much more important suggestion: Given that the president acknowledges that the banks are fighting reform "every inch of the way" (and boy are they!), the president should fight back with equal conviction and vigor.
Right now all the might, power, connections and wealth of the financial industry, its allies, lobbyists, lawyers and front groups are being brought to bear on regulators, legislators and anyone else who dares to try to regulate the banks. This is when presidential action and leadership is most needed and would have the most impact. Words are nice, but real, clear and concrete action is what is needed.
The banks are not fighting financial reform with occasional words or rhetoric. They are putting their vast and seemingly unlimited financial resources where their mouth is, in campaign contributions, in paying lobbyists, lawyers and PR-spinners, in funding numerous industry groups and other front organizations to push their agenda, as well as purchasing anyone else who might help them like academics and consulting firms that produce "studies" showing the supposed evils of every single proposed financial reform. They are also putting their time and muscle into fighting reform "every inch of the way," as the president sees and knows.
When will the American people see him fight back? This is a test. It's time to step up. Frankly, it is past time for the president to let his actions speak for him and they will speak louder than any of his words. That is what the American people are waiting for. That is also what the banks, Wall Street and their allies fear most. They already have taken the measure of this President. They have concluded based on his actions, actually his non-actions, that he is all talk. They are counting on him continuing to be all talk. They are counting on him not taking any real action and not being a leader on these most important issues.
The question is not when, but if the president will step up and takes action that the American people have been looking for since they elected him in November 2008. He has taken care of the banks and the bankers, most of which would be bankrupt and most of whom would be unemployed but for his actions to save the financial system from a collapse they caused, and they have rewarded him with their scorn, antipathy and aggressive political opposition. It's now time to take care of the rest of America. Time is running out. The time is now.
What can he do? First, he must put his money where his mouth is -- that's all Wall Street will ever understand. He has to fully fund all the regulatory agencies so that they have a fighting chance against the industry's army of lobbyists and lawyers that have laid siege to them and are slowed gutting and eviscerating reform. Right now, it is not a fair fight. Some are trying very hard, but they have been put at a gross disadvantage. Fund them all right now and then give a speech saying you have given them the resources and you expect them to get the job done without fear or favor and that you, the president, have their back.
Second, the president must put the government's best lawyers into the fight against the industry's legal attacks on reform. This is the newest front in the war against financial regulation. The industry is sparing no expense in hiring as much legal talent as possible. The president must respond in kind and fast.
Third, he must fund and then direct his Attorney General and every other agency responsible for enforcing financial laws to start working together to really investigate the financial crisis and bring those responsible to justice. No-fault financial collapse cannot be acceptable. No accountability has to end. Phony PR-driven enforcement and investigations have to also end.
Fourth, the president has to make highly visible and well-publicized personal visits to every single financial reform agency and tell them how important they and their work are. He has to say that he expects them to get the unfinished job of financial reform done and that he and his entire administration fully support them and look forward to them finishing the job of protecting the American people, the taxpayers and the U.S. treasury.
Last, he has to designate one of his senior White House staffers as the point-person responsible for making sure all this actually happens. This is the only way to take responsibility and ownership of financial reform.
Those are actions that are essential to back up his words. Those are also the right actions to take, morally, ethically, politically and as a matter of policy. That's what the American people are waiting for. That's what the financial industry fears the most. Mr. President, the time is now. Take action.