Last Friday, the media finally began to cover the most important public policy debate the country has faced in 7.8 decades (come on, you can do it, count backwards). It's not health care, thank god, or national security (note to Republicans: the president agrees with you, can we please move on?), or immigration (10% unemployment + mid-term election = nfw), or even global warming (recently cleverly re-branded 'global climate destabilization'). No, for those of you who have been in a coma all week, the issue garnering all this newfound attention is financial regulatory reform (note to marketers: need re-branding).
For weeks, months even, people who care about financial reform have been talking to anyone who will listen -- e.g. mostly each other -- about derivatives, off-balance sheet transactions, resolution authority, and regulatory incentives. As one lackluster bill worked its way through the House and another, equally unimpressive, meandered through the Senate Banking Committee, the talking turned into frustration because no one seemed to care enough to actually get something done.
But now they do. Democrats and Republicans are suddenly falling all over each other trying to prove they are the ones with the stronger plan. Why? Because last Friday, the media started paying attention. Now you can't get through five minutes of Fox, CNBC, Bloomberg, MSNBC, ABC and the rest without someone bringing up financial reform. The four people who still watch CNN said it's the same over there. That's right: last Friday (the best day ever), the most important issue facing our country finally started getting the attention it deserves.
Why did the media turn its attention to financial reform? And more importantly, what can this shift teach us about how to take reform over the goal post?
Did they start covering it because they finally realized the integrity of our financial markets is the bedrock of our economic recovery? That our future requires investment; and investments depend on effective markets? Because the public started demanding to know about CDOs, RMBSs, OTCs, ABS, CDS, and SOBs (just making sure you were paying attention). The answer is no. On Friday morning, the country's media elite (and the media-not-so-elite and the heck-I-just-write-for-the-school-newspaper) finally started covering financial reform because on Friday, financial reform finally had what every really critical issue needs. Chum.
chum -noun
1. Cut or ground bait dumped into the water to attract fish to the area where one is fishing. 2. The stuff that funny-looking guy threw overboard in Jaws right before he realized they were going to need a bigger boat. 3. Goldman Sachs v. SEC.
Every little morsel is tastier than the last. There's the mild Goldman "we are not a fiduciary" Sachs, the slightly more flavorful ABACUS (not to be confused with legendary band ABBA, which is, interestingly enough also a well-known fish canning company in Sweden). Dive a little further and you find a nice chunk of tasty Fab Fabulous. Then there's a big rotten bunch of Lloyd Blankfein fishheads telling us guppies how to do God's work. Mix all those fishy pieces together with some 'allegedlies' and a few 'allegations' and the sharks just eat it up. God bless their toothy souls. They haven't seen chum like this since President Clinton didn't have sex with that woman Ms. Lewinsky.
Let's just hope it keeps on coming. As anyone in politics knows, today's chum is tomorrow's trash wrapped up in yesterday's news. If we're not careful, it will be back to Bubble Boy faster than a bell clapper in a goose's ass.
Because of this, those of us who care about financial reform -- those of us who really, really, really care in a not-at-all obsessive but totally healthy way -- have one job and one job only to do.
Find more chum.
Keep that bloody smelly fish gut chum coming, keep the sharks circling, and we can keep media attention where it should be. Maybe just maybe, then we can then make something happen.
No Chum = No Action. We need more chum.
You see, nobody cares which derivatives are cleared on exchanges and which ones are exchanged at clearinghouses. They don't care if off-balance sheet transactions go on-balance sheet, or if risk-weighted capital requirements include illiquidity surcharges that assume a decline in collateral values. They admittedly care a little bit about aiding and abetting (but only because it sounds cool). And let's be clear, nobody cares about Fannie and Freddie (provided they keep the baby).
Nope, what they care about is chum.
So I'm asking you, nay begging you, if you know anything that seems even the tiniest bit fishy, please let me know immediately by emailing me at chum@morechum.com. If you don't know anything but are willing to try to find something (after all, you aren't working) there are plenty of places to look.
You could start with the 125 former congressional aides and former elected officials now working for financial firms, or the 70 former members of Congress now lobbying for Wall Street (an illustrious list that includes former Senate majority leaders Trent Lott and Bob Dole, a former House speaker Dennis Hastert, and not one but two Dicks (Gephardt and Armey), both former House Majority Leaders. If that isn't fishy enough, try $500 million of lobbying or $41 million of contributions to Banking Committee members from financial services firms. Of course you could take a sniff around every member of the House Financial Services Committee (known on the inside as the 'money' committee because of the guaranteed industry take).
If you are looking for a more exotic fish, look at the wives. For every well-heeled financier, there are several unseemly shrink visits, spa treatments and credit card bills. If aforementioned financier is over 40 and has at least 1.6 children, you will probably be able to find at least one really pissed off first wife willing to talk. And speaking of women, for every former vice president accusing Goldman of sexual discrimination there are dozens more who want to.
For a meatier fish, try well placed FOIA (Freedom of Information Act) requests to various government agencies for communications with anyone who worked at one of the eight banks who did 98% of the derivatives business at the heart of the collapse. For the really nasty fish, look at the traders (then turn your head slightly and look at the drugs and hookers -- OK, the' semi-pros').
Of course, we could probably not do any of this and still find out everything we needed if we could just get our hands on the AIG emails like the Sheriff of Wall Street, a former S&L investigator, and a bestselling investigative author suggested several months ago. Why haven't we done that? Don't we own the company? Oh that's right, all the people governing it came from the Fed.
Anyway, those are just a few ideas of where someone with a little time on his hands might go looking for some chum. But time is drawing short. Debate on the Senate bill is moving fast. To keep the focus where we need it, on the people who screwed up the laws in the first place, we need the sharks to keep circling.
We need more cow bell.
If we can keep the chum coming, we just might be able to restore the integrity of our financial markets and lay the foundation for economic recovery. We just might be able to ensure that our country never again endures a financial crisis this devastating, this predicable and this preventable. With enough chum, we can make our markets work again. With working markets, we can finally build that bridge to the 21st century. We can grow American businesses for our prosperity and American families for our spirit. We can have morning in America and prove that a person's worth is measured not by the size of his paycheck but by the content of his character.
We can do all of this and more as soon as we have a stable financial market. For that we need chum.
Let's go fishing.
For more on how to reform the financial system, go to www.agendaproject.org/financialmarkets
Follow Erica Payne on Twitter: www.twitter.com/PayneFullyTrue
Mike Lux: Fraud in Banking, Fraud in Message
The banking wars are in full scale battle mode. We are going to see a lot more of this faux populism paid for by bailed out bankers before the year is through, and progressives have to be quick to expose it.
More chum? The rating agencies were the lynch the pin. Securitized liar's loans would have never been bought by investors except for the rating agency fraud of assigning high ratings to toxic assets. If these toxic assets had not found buyers they could never have grown to pollute the entire system. So the rating agency role in ABACUS needs to washed from the carcass and feed to the sharks.
You just can't have enough chum.
The current crisis was mainly do to a collapse of the sub-prime housing market. Wall Street itself and stocks go up and down but the mortgage crisis was why the government intervention was needed.
The two biggest players in the Mortgage crisis were fannie and freddie. yet they were not even touched in the currently proposed 1400+ page finance reform bill.
I wonder who the big receivers of campaign contributions from fannie and freddie were? Oh wait, I already know. The president and Sen Dodd who wrote the bill. Must be a coincidental oversight!!
Also notice that money went to both Republican and Democrats so it is NOT a partisan thing. Just the largest shares went to the people leaving them out of the current bill.
Good artcicle and I have a question in relation to this. Why can I not find any article in the HP relating to the Issa investigation about the timeline of the SEC suit against Goldman? It appears that the NYT ran an online story hours before the suit was even filed and then 30 minutes after the story ran, the DNC bought Google ads the linked a "SEC Goldman" search to their site seeking contributions. Apparently, someone at the SEC leaked this info to the benefit of both the NYT and the DNC, yet I see nothing in the HP about it. Strange?”
Perhaps we can get back to using investment funds for creating real jobs here in America so we don't have to buy slipshod, cheap Chinese goods.
When we reform our financial houses, perhaps then we can begin rebuilding the middle-class—and return to a solid & prosperous economy where everyone gets a slice of the pie.
Rep. Marcy Kaptur, D-Ohio, has asked the DOJ to do a criminal investgation of the moneyb chaners, but she needs more of congress and senate to get DoJ to act!
CALL YOUR CONGRESS PERSON AND SENATOR! tell them to support Rep. Marcy Kaptur, D-Ohio
With money to burn, a good portion of which is taxpayer money, the Wall Street Wizards buy the best lobbyists and make substantial contributions to both sides.
The Goldman Suit, the Madoff suit and others will become poster children for our "unbiased & honest " federal government's response..."See we sued them". The result will be relatively insignificant fines and penalties, Wall Street will find a counter measure and business as usual will resume.
Excellent response Wayne!!!!
Just think of the buckets of smelly transatlantic chum that our European cousins might slosh our way. Now they might be the Ahabs of chum and we'll not see any bigger, I'd wager!
Thanks for the great read!
And it will work.
Very amusing & well done Erica...Hooray...Keep the pressure on...