Greater government involvement in the financial sector is not something I thought I'd ever ask for, but it has turned into a necessity in order to preserve, not destroy, capitalism. At the risk of been kicked out of the Capitalistic Pig Party, I am in support of tighter regulation of too-big-to-fail (TBTF) institutions.
This week, after months of intense lobbying from corporate interests, the Senate passed a financial reform bill that is that D.C. specialty: "reform" that's been watered down within an inch of its life. Yes, it will create a much-needed Consumer Financial Protection Agency and requires an audit of the Fed. But it doesn't end "too big to fail" banks, doesn't create a 21st century Glass-Steagall firewall, and leaves open dangerous loopholes in the regulation of derivatives. And we can expect more loopholes to be inserted as the bill heads to conference committee. In public, the big banks groused. In private, they counted their record profits, watched their stocks go up after the Senate vote, and agreed that the $1.4 million a day the finance industry spent lobbying Congress -- including putting 70 former members of Congress and 940 former federal employees on its lobbying payroll -- was money well spent.