In their current form, derivatives are basically government insurance for banks where taxpayers pay the claims. And politicians like Gregg and Nelson are fighting to keep the crooked $600 trillion derivatives market unreformed.
With two-thirds of the nation supporting reform, any political party that throws in its lot with Wall Street will pay a major price come November. No amount of Wall Street campaign cash can counter voter outrage.
Senate Republicans say they're against both the bailouts and the Democrats' proposed legislation to end them. They say the Dodd bill would "actually guarantees future bailouts." It's time for the them to put up or shut up.
Anyone can talk tough when markets are calm. But in the middle of a financial crisis it takes a special breed of hard-ass to insist on haircuts, since no one can be sure that squeezing creditors won't shut down the entire bond market.
As bankers fight to defeat tough new rules on derivatives, all their sloganeers can come up with is that serious rules will send this business overseas. It'd be funny if Congress weren't taking it seriously.
If McConnell-style deceit about the financial reform bill continues in the Senate, serious regulatory reform won't happen. Half measures won't work. Only robust financial reform will end Wall Street's freedom to deceive.
Obama's speech walked a line between vision and reality. At times it seemed an internal dialog between the technocrat who sees the problems and how to fix them, and the pragmatist who wants to reap the rewards from whatever bill gets passed.
The banking wars are in full scale battle mode. We are going to see a lot more of this faux populism paid for by bailed out bankers before the year is through, and progressives have to be quick to expose it.
Obama's working from a flawed theory: "There is no dividing line between Main Street and Wall Street. We are all in this together as one nation." Really? The entire story of this crisis is about how we are not in this together.
Washington has tied itself in knots trying to find a way to thwart "too big to fail" without cutting megabanks down to size. It can't be done. When something is too big, the solution is to make it smaller.