If you've ever wondered what the phrase "the sound of silence" means, you should've been listening when the President invited "the titans of industry" to join him in promoting financial reform this morning.
The President's speech walked a fine line between vision and reality. At times it seemed almost an internal dialog between the technocrat who sees the problems and knows how to fix them, and the political pragmatist who wants to reap electoral rewards from whatever bill finally gets passed.
"Between the dream and the reality," wrote T. S. Eliot, "falls the shadow." The President's speech demonstrated that he sees what needs to be done. But reform has to make its way through the legislative shadows on Capitol Hill. That means it's up to the rest of us to create the political climate that makes that makes genuine reform possible - or, better yet, inevitable.
The signs are good. Sen. Chuck Grassley's vote yesterday for Blanche Lincoln's derivatives amendment reflected a new political reality: Republicans can't afford to be seen as favoring Wall Street, and when they're faced with an up-or-down vote they'll be under tremendous pressure to cave.
The President's speech was strong on principles. He led off the policy section of his speech with a strong endorsement of the Volcker rule, which in his words "places some limits on the size of banks and the kinds of risks that banking institutions can take." That's exactly what's needed (although the Dodd bill as currently written fails to deliver it.) The President also spoke strongly in favor of transparency, and was at his strongest when talking about consumer protection. He said:
"While a few companies made out like bandits by exploiting their customers, our entire economy suffered. Millions of people have lost homes, and tens of millions more have lost value in our homes ... unless your business model depends on bilking people, there is little to fear from these new rules."
That last comment was met with stony silence from the financiers in the audience, and no wonder: Their business model frequently does depend on "bilking people." As my colleague Zach Carter has pointed out, Jamie Dimon's JPMorgan Chase expects to lose one-half to three quarters of a billion dollars as a result of new consumer credit card protections, and to book a loss on their card operations for the year. So, at least in one of his corporate divisions, the man once called "Obama's favorite banker" did build a business model based on bilking customers.
Some viewers of the speech were no doubt frustrated by some of the parsing. Shahien Nasiripour cleverly caught the contrast between Obama's "join us" stance toward bankers and FDR's defiant "I welcome their hatred" speech. But that difference reflects the President's temperament and a changed political climate, and doesn't detract from the core of his message.
Obama's comment that both the Senate and House bills "represent a significant improvement" over the status quo will frustrate a lot of people, too. That's the politician talking: If the weak Dodd bill is the best he can get, he'll still need to declare a great victory in anticipation of November's elections. But there's no reason to expect that this bill really is the best he can get.
Strong reform measures need to be brought to an open vote on the Senate floor, where Wall Street-friendly Senators of both parties are unable to hide behind procedural smoke screens. It's tough to make a public stance in favor of the big banks in the "transparency" of an open vote, and that provides an unprecedented opportunity for real change. That's why Simon Johnson's suggestion - that you call your Senator, Harry Reid, and the White House to demand an up-or-down vote on the Brown/Kaufman SAFE Banking Act - makes so much sense. (Why not take a quick break and do it right now?)
There are other amendments that deserve support, too. Sen. Jack Reed's consumer amendment, Bernie Sanders' proposed audit of the Federal Reserve, and the truly bipartisan McCain/Cantwell amendment to reinstate the Glass-Steagall Act are all important.
Sure, we could critique parts of the President's speech. His statement that "there is no dividing line between Main Street and Wall Street ... we rise or fall together as one nation" is demonstrably false. One look at unemployment figures and the Dow will tell you that. But he can be forgiven the rhetorical excesses, especially if he succeeds in providing what he rightly describes as "common sense" fixes to a real problem. These reforms should appeal to people across the political spectrum, and deserve support from anyone who believes in non-monopolistic free market capitalism.
The President will face an ongoing temptation to compromise, to declare victory with the Dodd bill as written when he's faced with organized resistance. The same political pressure that encourages Senators to strengthen reform will also help the President stay resolute on this issue.
The political climate is right for meaningful change. The President needs public help and support to get tough reforms through the Senate. He's said his piece. Now he -- and we -- need to follow it up with concrete action.
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Richard (RJ) Eskow is a consultant, writer, and former insurance/finance executive. Richard 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
Follow Richard (RJ) Eskow on Twitter: www.twitter.com/rjeskow
Lincoln Mitchell: Another Battle for the Soul of the Democratic Party
Nobody can win the soul of the party because the party has no real soul. There are no real core principles to which the party ascribes either currently or historically. This is the nature of the Democratic Party.
Dylan Ratigan: The Speech: The Good, The Bad and The Missing
The revolving door between government regulators and the high-paying banks they supposedly regulate remains as fluid as ever. None of what Obama said today matters while our cops still work for the crooks.
Jill Schlesinger: Obama Financial Regulatory Reform Cheat Sheet
The Dodd Bill invokes the "Volcker Rule," which would potentially prohibit firms from participating in certain businesses, which in turn would force them to reduce their size.
All presidents accept the individual donations from people who work for the BIGS before the insane ruling of the Supremes, who declared those BIG's corporations as "people".
And....as Obama said in an interview, "They knew where I stand on this issue, before they donated". He even spoke yesterday of his stand and warning, two years before the collapse, when he was a Senator. He warned against the bubble and the casino products.
It is only the Republicans who will not even allow a debate on the Financial Reform and it is the minory leader of both the House and the Senate who have worn a rut in the path to Wall St. to beome the waterboys for the BIGS. And...it is they who are lying their @sses off.
So, the BIG's individuals who donated to Obama is getting tiresome and untrue.
But I would submit that to make serious progress we must understand that a ‘Green Economy’ is an economy that accounts for negative externalities; that the true meaning of a ‘Green Economy’ is simply a ‘Non-externalizing Economy’ --- and that a ‘Non-externalizing Economy’ is a ‘Non-Empire Economy’. By definition, Empires always externalize costs (or dump negative externalities) on the ‘others’ (those outside the Empire), and monopolize benefits to those who run/control the Empire.
An economy that is run by an Empire divides the world, and its accounting methods, into a sphere inside the Empire (with particular attention to those at the hierarchical ‘tip of the Empire’) who get the benefits of the Empire Economy, and a sphere outside the Empire (with particular costs in blood, financial, and environmental disaster to those many lowly wretches, the ‘others’, literally at the ‘tip of the Empire’s spear’).
Alan MacDonald
Sanford, Maine
You may want to read an excellent article on Durbin's stupendous interest rate proposal at:
http://funks2.wordpress.com/2010/04/19/senator-richard-durbin-just-call-me-mr-perfect-36/
It made it tough on consumers, easy on lenders - and made it hard to file bankruptcy just in time for the housing bubble crash.
And anyone that doesn't think the fix was in as early as then - I've still got that bridge in Alaska to sell ya.
This financial reform bill is going to be filled with Consumer rip-offs (such as the interest "cap" Bull) and a consumer protection agency within the fraudulent Fed.
So no thanks, Mr. Eskow. I learned last year beware of Obama's half-assed reforms - way before others here apparently figured out the public option was just a carrot on a stick.
I'm no better than the Tea Party people who folks claim work and vote against their best interest if I keep falling for flat out lies.