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Shorting Democracy

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This may be the single biggest lie in modern American history: "Most Republicans want a bill," said Sen. Richard Shelby, "but they want a substantive bill." We've criticized the Democrats plenty of times on the issue of financial reform, and the Dodd bill isn't perfect. But this wasn't a yea-or-nay vote about a bill. It was a vote to decide whether Senators would even be permitted to debate the bill. That difference means everything.

The GOP has now gone on record officially as saying it wants to block the Senate from even discussing a financial reform bill. They don't want to let the American people see and hear a debate on this topic from their Senators. When it comes to financial reform, they don't want the democratic process to take place at all.

Richard Shelby has received $789,489 in campaign contributions from the securities and investment community over the last five years, along with $430,352 from lobbyists, $306,700 from commercial banks, $239,600 from finance and credit card companies, and $151,300 from miscellaneous finance companies.

R. Shelby, R-Alabama. Price of a vote: $1,917,441. (That's the amount we know about, anyway.)

He had help, of course, from a unified Republican Party. Even Sen. Jim Bunning of Kentucky, who we praised when he voted for Blanche Lincoln's derivatives bill, joined in the effort to short-circuit the open democratic process. So did a lone Democrat, Ben Nelson of Nebraska, who was reportedly angry because a provision benefiting Nebraskan Warren Buffett was removed from the bill.

The bill contains many measures that Republicans say they want. As Sen. Shelby said, they claim to want something substantive. Normally a bill is finalized through a process of public debate -- at least that's what we were taught in civics class. But 41 Senators are on record as saying they don't want a public debate about this bill. They don't want to introduce amendments or debate the merits of the policies that are in it today. Their long-range strategy is no doubt to paralyze the Senate until Democrats are forced to accept back-room deals that will kill an already dangerously weakened bill. That's a great way to kill reform without leaving any fingerprints.

A recent study showed that Republican Senators received 25% more on average from the finance, insurance, and real estate industries than their Democratic counterparts (although the really big money went, as it always does, to New York's Senators and Banking Committee Chairman Chris Dodd, all Democrats. If you take out their contributions the party discrepancy becomes even more striking.)

It's all small change compared to the trillions of dollars that have been spent in the bailout, of course, or to the billions in bonuses being paid out to reckless bankers every quarter. When politicians won't even allow reform to be debated, much less passed, it's clear that the big Wall Street bankers are getting their money's worth in Washington.

For those of you who don't know what "shorting" is, by the way, it's the practice of borrowing something that isn't yours and profiting if it's worth less by the time you have to give it back. Since political office is only "borrowed" from the voters, isn't that exactly what these Senators are doing?

Richard (RJ) Eskow, a consultant and writer (and former insurance/finance executive), is a Senior Fellow with the Campaign for America's Future. This post was produced as part of the Curbing Wall Street project. Richard blogs at:

No Middle Class Health Tax
A Night Light

Website: Eskow and Associates

He can be reached at "rjeskow@ourfuture.org."