There are three kinds of Republicans in the Senate today. First, there are those willing to follow the lead of Senator Mitch McConnell – whose approach to financial sector reform apparently amounts to little more than, "Don't worry, be happy". If Senator McConnell has a reform plan he would like to lay out for review, now would be a good time to put some credible details on the table.
Based on what we have seen so far, Senator McConnell proposes to do nothing regarding the systemic risks posed by today's megabanks and just "let 'em fail" when necessary. This is a dangerous and irresponsible position, and it should be opposed tooth-and-nail by anyone who actually cares whether or not we run ourselves into a Second Great Depression.
The second group has remained silent so far, waiting to see which way popular opinion and their leadership will go. Most likely, almost all will cast their lot in with Senator McConnell.
And if Senator McConnell brings 40 Senators with him, they will defeat the Dodd bill - and then smash themselves into the rocks of November 2010 as the "too big to fail" party. Perhaps we should welcome that.
But there is also a third group, not yet numerous, that is more inclined to be sensible or - as Senator Corker aptly put it - to "act like adults."
These Senators (so far I have a list with precisely three names; tell me if you have more) begin to understand that allowing our megabanks to continue in their current form makes no sense. The power of this idea is starting to get through (also at BusinessWeek).
Saying we should do nothing about these megabanks makes no sense. And trying to turn the argument on its head to claim that, “a greater number of smaller banks would pose an even bigger risk of taxpayer bailouts” is truly not a powerful idea.
So what are the prospects for Senator Dodd's financial reform bill, which is expected on the floor soon?
Could it even be strengthened, for example in the direction that key Democratic Senators are already pushing?
The prospects for this are not as bleak as you might think. There are three elements that make this a potentially productive moment:
In short, anything can happen.
So it's a good time to call your elected representative. Or just email them this link: http://13Bankers.com (this is why we wrote the book).
This entry is also posted on BaselineScenario.com.
Mike Lux: Challenges and Challengers in the Senate
One thing that is clear is that the mood of voters is more anti-establishment and anti-incumbent than it is purely anti-Democrat. It's the outsiders who have more traction in this upcoming election cycle. In that context, I want to raise a big red flag.
Well, the GOPers have already given us the Great Recession. I can't see them having any kind of conscience over bringing on a depression. They would just spin it to blame the Dems.
"With the development of toxic (derivative and subprime lending) financial products, the relationship between investment banks and the economy has turned parasitic."
A compliant (non functioning) regulatory apparatus, is something we warned about in 1998:
"The nature of financial market activities is such that significant dislocations can and do occur quickly, with great force. These dislocations strike across institutional lines. That is, they affect both banks and securities firms. The financial institution regulatory structure is not in place to effectively evaluate these risks, however. Given this, the public is at risk."
See:http://twisri.blogspot.com/2009/07/bernankes-history.html
Why the market failed - http://twisri.blogspot.com/2009/03/why-market-failed.html
Adam Smith on the Current Financial Crisis - http://twisri.blogspot.com/2009/04/adam-smith-on-current-financial-crisis.html
What happened. What now. - http://twisri.blogspot.com/2009/04/commercial-and-investment-banks-used.html
To REALLY see what went wrong, take a look at page 6: http://www.sec.gov/rules/proposed/s71903/wmccir122203.pdf
See page 2: http://www.sec.gov/rules/proposed/s71005/wcunningham5867.pdf
Also see: http://www.ethicalmarkets.com//wp-content/uploads/2008/12/financialbailoutcomment1.pdf
And then there is that pitiful fourth option - just ignore it entirely, They could actually pretend the fight for financial reform isnt even happening. They could lay low during it or continue protesting other things. If they want to fall behind the republicans, they could somehow link it to tax hikes or bad for small businesses although that were be a poor move on their part and demonstrate how not serious or ignorant they are on the issues that plague this country. However it works out, it should be a curious series of events that I am eagerly awaiting.
They are standing strong and voting against a bill that does NOT allow bailouts from taxpayers. They will fall unless they put enough money aside to stay afloat.
Republicans say this bill supports taxpayers bailouts for banks when they know that is not true.
These Republicans have proven they are dangerous cowards who would continue selling Americans out. they know what they are saying are lies or have no clue to what is going on.
They will loose allot of Republicans again who see through their con very easly.
Being constructive has to become truly difficult if the Republicans make the ordinary off year gains in Congress. When the Democrats had the 60 Senators, Republicans could accept party discipline and leave Democrats to carry the load. Perhaps, a closer Congress will force the better intentioned Republicans to be serious -- supposing there are better intentioned Republicans. As I say, they didn't have to show themselves before.
There, that's the answer from one Tea Party member. You only have about 2 million more to go. Good luck.
I submit we begin attempting to obtain from incumbents and challengers written commitments they will not take donations or lobbying money -- at least from specific corporations -- and then publish their responses as widely as possible. Congressional races are state races, so it shouldn't be too difficult to obtain statewide print and possibly local television coverage; state branches of the individual political parties might also be willing to spread the word about a recalcitrant opposing candidate.
The definition of insanity is continuing to do the same thing while hoping for a different result. It will be truly insane for us to continue to returning America's only native criminal class (per Mark Twain) to Congress where they can continue taking corporate bribes that motivate them to work for corporations and against We the People.
You fall into the Greenspan trap, that rising house prices are a good thing, that they make Americans richer. Higher prices of anything are not good for an economy.
When you make loans to people who can't afford them, house prices automatically go up. In fact, house prices will rise to the limit of affordability.
And low interest rates and VAR mortgages caused the problem as much as bad loans. Most people could afford their mortgage at the initial interest rate, but not after the rate rose. (VARs did not exist 30 years ago, we could do without them.)
So, even if everyone was still able to pay there would be a problem, namely a boom in housing prices that made banks and homeowners richer, but made those without homes and the next generation poorer.
That was a big problem, and it resolved itself. House prices are falling, until they become affordable again, with new rules on who gets mortgages. Or else no one will buy bogus CDOs any more, and then no one will write bad mortgages, because they'd end up owning them.
Or the clause prohibiting the securitization or assignment of any mortgage loan except prime loans at fixed rates and prohibiting the securitization or assignment of subprime or ARM loans (the bank can make them, but they must hold them to maturity--like in the old days).
Call this "The Political Corruption that left Republicans Eating their Own Corporate Benefactor's Flesh". Or call it stupidity.
I don't trust the Republicans, but quite frankly I trust the Democrats even less. I'd rather all the Republicans stand up and stop this thing than let the Democrats push something through that we will regret later.
"A cynic knows the worth of everything, and the value of nothing"
Has it occurred to you that the parties are an illusion? Your own representative cares more about what you think, than what the party thinks. They'll toe the party line only when it doesn't threaten their reelection.
As Will Rogers said, "I don't belong to an organized political party. I'm a Democrat."
When I write my congresswoman, all I get back are Republican talking points and Frank Luntz slogans. But I live in a wingnut district.