Like so many who worked to defeat the Republicans in November 2008, I was convinced that despite the nightmarish economy we were about to 'inherit' in January 2009, in the process we were going to be given a once-in-a-lifetime opportunity. It would give government back to the middle class and throw out the 30 years of laissez faire financial regulatory practices that had almost single-handedly destroyed our economy, left us with greatest income inequality ever, and saddled future generations with crushing federal indebtedness.
The easiest target, and the one I was convinced we would tackle first, was Wall Street: the profit-driven, greedy, selfish institution that, with its unbridled compensation practices and current light-touch regulatory regime is, I truly believe, behind almost every major societal and economic ill that has befallen the United States since 1980.
I knew we couldn't change Wall Streeters, but when it came to reining them in, properly regulating them, and, in some cases, punishing them, it was going to be like shooting ducks in a barrel. All the pain they had caused was obvious, and the 'evidence' even then was laid out more clearly than in a Law & Order episode. And we would be finished early in 2009, for sure.
Well, as Pogo said in the long-ago comic strip, "We have met the enemy and he is us." We have already let Wall Street off the hook, as they say, for fully a year more than I ever thought possible, because of apologists for Wall Street within both the White House and Congress. But even more concerning, depending on how the upcoming House and Senate conference on financial regulatory reform legislation turns out, we may be about to give the Street 'soft-touch' regulatory reform that it will laugh about -- and again run to the bank with -- for at least a generation.
Once you've missed some or all of a God-given major regulatory reform opportunity, political exhaustion sets in and abusive practices become even more abusive and embedded. In the specific case of Wall Streeters, if we miss 'getting' them now, as they say, these greedy guys will simply get greedier and their practices more harmful as their securities become ever more complex and thus beyond any reasonable regulatory oversight capability.
As sort of a 'canary in the coal mine' to larger financial reform, we've seen on the relatively simple issue of trying to reform the abusive tax treatment of "carried interest," which costs the Treasury $10 to $12 billion per year, just how disingenuous, misleading and vile the anti-financial reform crowd can be. Thus it comes as no surprise that the very same tactics and in some cases, even the very same lies, which have been used over the last nearly four years to push back on carried interest reform have now been embraced by many of the Republicans who just voted against the Senate's finance reform bill. And the similarities between the two efforts will be even more apparent in coming weeks as the actual reconciliation with the House version takes place.
For example, last Thursday, Senator Richard Shelby (R-AL), ranking member of the Senate Banking Committee, said, with regard to the Senate Bill, "I cannot support legislation that threatens business conditions and threatens job creation." On the very same day, May 20, the President of the grossly self-serving Private Equity Council said that any change in the taxation of carried interest would "hurt those companies that are most desperately in need of capital to sustain or create jobs."
This is such B.S., as neither overall financial reform nor reforming carried interest has anything at all to do with 'job creation,' and it is unconscionable to threaten the American people this way. At the onset of this Great Recession, which we now know was brought on mostly by Wall Street and investment excesses, the number of real unemployed Americans was 16.8 million -- the number today is 30.3 million, an increase of 13.5 million, and we are 'short' 22 million jobs in order to be at or near full employment. Substantially and quickly reforming the villain that largely caused the Great Recession is the sine qua non to creating those 22 million jobs, not the other way around, as these fellows falsely insist.
The next several weeks are when the substantial financial industry reforms that were promised in the 2008 presidential campaign will come to pass -- or not. There will be at least seven 'indicators' of who won in conference, and pray God, it isn't, as it was in 1999, Wall Street and, to steal a phrase from President Obama, its "hoards of lobbyists", which have already spent an unbelievable $1 million per Member of Congress (more than $500 million in total!) lobbying on these issues.
Specifically, we need to see:
Wall Street is desperately in need of reform, yet, because of the ways it compensates itself, it is incapable of self-reform and fairness. We know from countless examples its self-serving (and selfish) tactics, we know the harm it has done, and we know the even greater harm it can do if left unchecked.
President Obama needs to vigorously and resolutely weigh in on the House-Senate conference efforts and make sure that the bill that comes out of the reconciliation process reflects the results and values that he talked about during his campaign -- he simply cannot leave it to Wall Street and its industry lobbyists, to the 'diluters' and 'over-compromisers' on Capitol Hill, or to the Wall Street apologists within his own administration and hope that Congress produces strong financial regulatory reform legislation. Opponents of reform learned years ago, more than proponents ever have, that 'in conference' is where reforms can easily die (and greedy guys can win even more).
Leo Hindery, Jr. is Chairman of the US Economy/Smart Globalization Initiative at the New America Foundation and a member of the Council on Foreign Relations. Currently an investor in media companies, he is the former CEO of Tele-Communications, Inc. (TCI), Liberty Media and their successor AT&T Broadband. He also serves on the Board of the Huffington Post Investigative Fund.
Richard (RJ) Eskow: Traded-In: These "Used" Senators Sold Out The Troops For Auto Dealer Cash
If you have a yellow "Support Our Troops" sticker on your car -- or even if you don't -- you should know the name of the Senators who just sold out our troops, their families, and our military readiness for easy cash offered by auto dealers.
that is not a free market. nor is having the world most open market when trading "partners" are not nearly as open and flaut the rules is not free trade nor does it even come close to the theory of comparative advantage, which free traders subvert to justify their ideology
What he DID refer to was "laissez faire financial regulatory practices that had almost single-handedly destroyed our economy, left us with greatest income inequality ever, and saddled future generations with crushing federal indebtedness".
Gone is the blaming of our ills on globalization, the Chinese, the trade deficit and the "demise" of manufacturing. That is my point. No more. No less.
It seems that leopards can't change their spots. But Leos sure can!!
they are not mutually exclusive but i ter relatated and part of the same failed ideology
but its pointless to try to explain something to you - you do not listen and apparently can not comprehend this is not an either/or argument but it is a both/and
That's today's scapegoat - "laissez faire financial regulatory practices". Not globalization. If it was a "both/and" argument then he would have written "laissez faire financial regulatory practices and globalization". BUT HE DIDN'T.
What happened to globalization? What happened to the Chinese? What happened to free trade? They used to be his scapegoats. Week after week after week he pushed that line. He used to worry "over the extremely adverse effects which unfair globalization is having on American workers". His previous policy was "an all-of-government, fully-empowered manufacturing and jobs policy that, on the one hand, is as neomercantilist as the policies of our major trading partners".
Now it's gone. Now it's somebody elses fault. Amazing. What does he really believe?
Remember this the next time he's ripping into free trade and the Chinese.
Would we be lingering year after year debating critical issues such as financial reform, heath care reform, immigration and our wars without the Sentate fiasco? In the foot steps of Obama that likes incremental change instead of one major change, I suggest that instead of 2 Senators from each state, we have 10 Senators. Then, it would be much harder to bribe them because there would be so many to deal with. And, democracy would win the day instead of our current shadow government. At least, I can still dream.
What we need first and foremost is a fundamental system change.
That means we have to put an end to Wall Street and end to Globalization and an end to Corporations. Corporate America is the cancer that we need to remove – completely.
We need to bring back small and medium sized companies and bring back our manufacturing base. We need more industrialization not less. That way we actually do create jobs and our economy start to be productive again.
I remember the Canadians telling us that they were assured that Obama was lying when he promised to modify NAFTA. It was campaign rhetoric used in order to get elected.
It was around the time of the bailout that he grandstanded about opposing the bailout and then voted to support it.
I remember that he immediately brought Geithner and Summers into his administration.
Obama never expected Wall Street to change and he has done everything he can to ensure there will be minimal changes made to the way business is done so I don't look to him for reform.
It appears that you don't understand what laissez faire means, and your statement is a contradiction in terms. If America had a laissez faire system, there would be no regulation of Wall street, as there quite clearly is, and has been over the last 30 years. You are blaming what you think of as a laissez faire free market capatilist system as the cause of the current ecenomic problems, when in fact America has quite clearly been socialist for decades, and has never been laissez faire, free market or capitalist. If it had in fact been what it purported to be, it would not have the ecenomic problems it has today.
hmm, that's a contradiction in terms. If America had had a laissez faire system, it wouldn't have had any regulatory practices. Since
Socialism? Perhaps partially. Personally, I'm fine with private owned, operated, and controlled shoes. But wait! Suppose those shoes lead to permanent physical problems because of design or contaminated components. I think that since our government is supposed to be not them but we the people, it's up to us what kind of economy we have. Nobody know what true laissez faire capitalism looks like. The closest is the England of Charles Dickens. Don't know about you, but I don't think that's what anyone but the corporate welfarers want.
yes exactly, and it obviously is not quite working that way now, and I don't think has ever really worked that way. So something is wrong, but what. At this point many people blame free market capitalism, without realising that this has not yet been tried in America. America is facist in the way corporations and government are intertwined, no more evidence is needed of this than the fact that Geithner is ex federal reserve, which is of course a private bank, and Paulson is ex Goldmans. America is socialist of course, since it redistributes wealth by force, Libertarians are against redistribution by force, but of course fully support voluntary redistribution via charities etc, ie the way America used to work pre 1917 - and America was allready a great country by this time.
Obama is OWNED by the bankers. Look at his staff, Geith, Summers, Paulson.
This reform 'effort' is sham.
Obama has yet to draw a line in the sand on ANYTHING - to think he'll start with the MOST IMPORTANT THING is.....well.....good luck.
I can't even ask where the "787 Billion" in stimulus went. Is that money even discussed anywhere?
As much as I despised Bush, I have to say: at least you knew where he stood. With Obama, who knows? It's time for him to get off the fence and make a stand. Somewhere. ANYWHERE.
Eliot Spitzer, or an equally tough prosecutor, if one exists, that really wants to catch crooks, and a squad of Untouchables with an unrestricted crime fighting budget, needs to go through government and Wall Street to clean house.
To correct several obvious legislative mistakes legislators should reinstate Glass-Steagle, which successfully protected banks and their customers for fifty years before its repeal in 1999, repeal Grahm-Leach-Bliley which allows the unbridled use of financial schemes of mass destruction, repeal the unlimited Christmas guarantees given to Fannie and Freddie, enact legislation to continually audit the Fed, and make AIG’s records available for public review.
Enacting an Elizabeth Warren version of a stand alone Consumer Financial Protection Agency will eliminate the marauding pirates who are wreaking havoc on consumers.
A government run Public Option, like the VA, delivering free care to everyone choosing to use it, which would be paid for by sales tax revenue instead of insurance, would cost $1trillion less than the $2.6trillion spent last year and no one would be without care.
For people choosing to purchase and receive private health care all costs paid for private care should be tax deduct for payees and tax free for recipients.
Without using government systems neither meaningful health care reform nor fiscal health for the federal government nor the economy can be achieved.