Last Friday, the media finally began to cover the most important public policy debate the country has faced in 7.8 decades (come on, you can do it, count backwards). It's not health care, thank god, or national security (note to Republicans: the president agrees with you, can we please move on?), or immigration (10% unemployment + mid-term election = nfw), or even global warming (recently cleverly re-branded 'global climate destabilization'). No, for those of you who have been in a coma all week, the issue garnering all this newfound attention is financial regulatory reform (note to marketers: need re-branding).
For weeks, months even, people who care about financial reform have been talking to anyone who will listen -- e.g. mostly each other -- about derivatives, off-balance sheet transactions, resolution authority, and regulatory incentives. As one lackluster bill worked its way through the House and another, equally unimpressive, meandered through the Senate Banking Committee, the talking turned into frustration because no one seemed to care enough to actually get something done.
But now they do. Democrats and Republicans are suddenly falling all over each other trying to prove they are the ones with the stronger plan. Why? Because last Friday, the media started paying attention. Now you can't get through five minutes of Fox, CNBC, Bloomberg, MSNBC, ABC and the rest without someone bringing up financial reform. The four people who still watch CNN said it's the same over there. That's right: last Friday (the best day ever), the most important issue facing our country finally started getting the attention it deserves.
Why did the media turn its attention to financial reform? And more importantly, what can this shift teach us about how to take reform over the goal post?
Did they start covering it because they finally realized the integrity of our financial markets is the bedrock of our economic recovery? That our future requires investment; and investments depend on effective markets? Because the public started demanding to know about CDOs, RMBSs, OTCs, ABS, CDS, and SOBs (just making sure you were paying attention). The answer is no. On Friday morning, the country's media elite (and the media-not-so-elite and the heck-I-just-write-for-the-school-newspaper) finally started covering financial reform because on Friday, financial reform finally had what every really critical issue needs. Chum.
1. Cut or ground bait dumped into the water to attract fish to the area where one is fishing. 2. The stuff that funny-looking guy threw overboard in Jaws right before he realized they were going to need a bigger boat. 3. Goldman Sachs v. SEC.
Every little morsel is tastier than the last. There's the mild Goldman "we are not a fiduciary" Sachs, the slightly more flavorful ABACUS (not to be confused with legendary band ABBA, which is, interestingly enough also a well-known fish canning company in Sweden). Dive a little further and you find a nice chunk of tasty Fab Fabulous. Then there's a big rotten bunch of Lloyd Blankfein fishheads telling us guppies how to do God's work. Mix all those fishy pieces together with some 'allegedlies' and a few 'allegations' and the sharks just eat it up. God bless their toothy souls. They haven't seen chum like this since President Clinton didn't have sex with that woman Ms. Lewinsky.
Let's just hope it keeps on coming. As anyone in politics knows, today's chum is tomorrow's trash wrapped up in yesterday's news. If we're not careful, it will be back to Bubble Boy faster than a bell clapper in a goose's ass.
Because of this, those of us who care about financial reform -- those of us who really, really, really care in a not-at-all obsessive but totally healthy way -- have one job and one job only to do.
Find more chum.
Keep that bloody smelly fish gut chum coming, keep the sharks circling, and we can keep media attention where it should be. Maybe just maybe, then we can then make something happen.
No Chum = No Action. We need more chum.
You see, nobody cares which derivatives are cleared on exchanges and which ones are exchanged at clearinghouses. They don't care if off-balance sheet transactions go on-balance sheet, or if risk-weighted capital requirements include illiquidity surcharges that assume a decline in collateral values. They admittedly care a little bit about aiding and abetting (but only because it sounds cool). And let's be clear, nobody cares about Fannie and Freddie (provided they keep the baby).
Nope, what they care about is chum.
So I'm asking you, nay begging you, if you know anything that seems even the tiniest bit fishy, please let me know immediately by emailing me at email@example.com. If you don't know anything but are willing to try to find something (after all, you aren't working) there are plenty of places to look.
You could start with the 125 former congressional aides and former elected officials now working for financial firms, or the 70 former members of Congress now lobbying for Wall Street (an illustrious list that includes former Senate majority leaders Trent Lott and Bob Dole, a former House speaker Dennis Hastert, and not one but two Dicks (Gephardt and Armey), both former House Majority Leaders. If that isn't fishy enough, try $500 million of lobbying or $41 million of contributions to Banking Committee members from financial services firms. Of course you could take a sniff around every member of the House Financial Services Committee (known on the inside as the 'money' committee because of the guaranteed industry take).
If you are looking for a more exotic fish, look at the wives. For every well-heeled financier, there are several unseemly shrink visits, spa treatments and credit card bills. If aforementioned financier is over 40 and has at least 1.6 children, you will probably be able to find at least one really pissed off first wife willing to talk. And speaking of women, for every former vice president accusing Goldman of sexual discrimination there are dozens more who want to.
For a meatier fish, try well placed FOIA (Freedom of Information Act) requests to various government agencies for communications with anyone who worked at one of the eight banks who did 98% of the derivatives business at the heart of the collapse. For the really nasty fish, look at the traders (then turn your head slightly and look at the drugs and hookers -- OK, the' semi-pros').
Of course, we could probably not do any of this and still find out everything we needed if we could just get our hands on the AIG emails like the Sheriff of Wall Street, a former S&L investigator, and a bestselling investigative author suggested several months ago. Why haven't we done that? Don't we own the company? Oh that's right, all the people governing it came from the Fed.
Anyway, those are just a few ideas of where someone with a little time on his hands might go looking for some chum. But time is drawing short. Debate on the Senate bill is moving fast. To keep the focus where we need it, on the people who screwed up the laws in the first place, we need the sharks to keep circling.
We need more cow bell.
If we can keep the chum coming, we just might be able to restore the integrity of our financial markets and lay the foundation for economic recovery. We just might be able to ensure that our country never again endures a financial crisis this devastating, this predicable and this preventable. With enough chum, we can make our markets work again. With working markets, we can finally build that bridge to the 21st century. We can grow American businesses for our prosperity and American families for our spirit. We can have morning in America and prove that a person's worth is measured not by the size of his paycheck but by the content of his character.
We can do all of this and more as soon as we have a stable financial market. For that we need chum.
Let's go fishing.
For more on how to reform the financial system, go to www.agendaproject.org/financialmarkets