From Marketwatch:
WASHINGTON (MarketWatch) — After months of trying to get Republican support for tougher regulations to prevent the next global financial crisis, Sen. Chris Dodd has decided to move ahead with or without bipartisan backing.
Dodd desperately wants a financial reform bill as a capstone to his 36-year career in Washington. But his lengthy negotiations with his Republican counterparts Richard Shelby and Bob Corker had produced little agreement, just headlines.
Dodd, the chairman of the Senate Banking Committee, announced Thursday that he would present his own bill to his committee on Monday. The banking committee — with 13 Democrats and 10 Republicans — will likely vote on the bill next week.
Dodd’s decision to abandon an endless quest to reach a bipartisan deal may make it more likely that Congress will actually enact legislation this year to rein in the worst of the abuses that helped lead the global economy to the brink.
The more Dodd negotiated with Shelby and Corker, the more watered-down the bill became. Each compromise with the Republicans made it less likely that the House of Representatives — remember them? — would go along.
The last straw may have been when Corker demanded that any consumer protection agency would not only have to be toothless, but it would also have to be run by the Federal Reserve, the omnipotent agency that utterly failed to protect consumers, the banks or the economy during the housing bubble.
The path to landing a final bill on President Barack Obama’s desk will still be complicated. Dodd will have to clear the bill out of his own committee and then find at least one Republican in the 100-member Senate to help him overcome the inevitable filibuster. And then he’ll have to compromise with the House.
By all accounts, the Republicans negotiated in good faith. But there were some issues that just couldn’t be compromised. It is time to act.
It seems like regulations are desperately needed. I don’t ever want another September 2008 again, where we all sit there and watch whatever we have accumulated melt away before our eyes. I don’t want the rich to get richer and the middle income folks to become poor folks, often at our expense. This is one reason that the Republicans have earned the moniker ‘The Party of NO.
Dodd has nothing to lose. He isn’t coming back. I thank him for sticking with this one. He was also offered Kennedy’s chair. He refused it because he wanted to deal with campaign finance. It’s time for Democrats and Republicans to do the right thing and pass some reform, even if in incremental steps.
Good Ole’ Chris “Friend of Angelo” Dodd is the perfect dude to head Obama’s Financial Reform Bill. His dad was censured by the Senate for diverting $100,000.00 of campaign funds for his own personal use and left the Senate in disgrace, but not before having the Nazi 1938 gun control act translated from the German into English and thus transformed into the Gun Control Act of 1968. Then his boy, Chris Dodd. One of the men most instrumental in the current economic bag of poop Oblamo can’t fix (or even acknowledge that it’s his job to fix it). Sweetheart deals with Countrywide. I can’t think of a better person to effect Finance Reform. Wheeeeee!!!!!
Oh, and when the question is “can we destroy the Nation from within?” You bet your butt the answer is “the party of NO” How about not “the party of no” but “the party of hell no!”.
It’s nice to see that Chris Dodd gets to take one last dump on the Senate Floor before leaving.
I don’t know how you can direct the financial woes of this country onto Chris Dodd. That is just absurd.
I got a sweetheart deal with GMAC and I am not even a senator. I got it because I was a returning customer.
This is great news. More stuff to use on campaigns against anyone that votes for this legislation.
It seems that Congress is imploding with ideas to make it appear as though they’ve ‘done something’ for the last year or so.. And, all those ideas will crush incumbants in November. 🙂
Reading this makes me happy. 🙂
If by “absurd” you mean “absolutely correct”, I agree!
Actually, I heard Harry Reid on WTOP this morning basically saying he had notified his Republican counterpart that they’d decided to go the “reconciliation” route. He claims it’s been used plenty of times by both Republicans and Democrats. WTOP noted that never has it been used on such a large piece of legislation.
It should be interesting – my thought is a lot of people aren’t going to be too happy with the ‘”reconciliation” approach. It will make for a most interesting election season, I think! At least you can always count on our senators and representatives in Washington to keep things interesting and provide lots of drama!
@Gainesville Resident
Even Byrd, who invented the Reconciliation Act, has said it was NEVER meant to be used for something like this. Previous uses by Democrats and Republicans have been proper usage of the Act, to tweak numbers up and down (like the Bush Tax Cuts). Think numbers, money, not huge entitlement programs. The cool part here is, “the party of yes (I suppose)” has painted themselves right into a corner. If they don’t get this thing past, their base will abandon them, and they’ll get slaughtered in November. If they do get this passed, it’ll be the most unpopular piece of “legislation” ever passed (and in the most corrupt manner), and they’ll get slaughtered in November. It’s AWESOME!!! 🙂
Just a brief change of topic: We lost one of the really good ones today. Merlin Olsen, NFL Hall of Famer, television football color commentator, and television actor (“Little House on the Prairie” and “Father Murphy”). Heart of gold. Extremely well thought of by everyone who knew him. Dead at 69 of cancer. RIP.
@Wolverine
I know, I heard on the way home. I LOVED him on Little House. I know I loved him in Father Murphy, but my memory of that is fuzzy. He made a wonderful mark!
I also heard about Merlin Olsen’s passing on the way home from work – they mentioned it on WTOP and how he was well thought of as both an actor and an athlete.
Let me see if I understand this correctly…you all are opposing this bill, sight unseen, because …searching…a Democrat is pushing it through?
Do you not think we need financial reform?
Captain, you know that is not what I meant.
Marin, you are so partisan. Party first. The hell with the country.
No, you read me wrong. I want to vote the Democrats AND Republicans that’ll vote on this bill OUT.
Re-read what I wrote above and you’ll retract what you just wrote. 😉
Why, when you don’t even know what it says? What do you find objectionable? You don’t think we need finance reform? I don’t know about you but fall 2008 sure scared the B-jesus out of me.
Finance reform is not needed. Current financial regulatory systems are sufficient. Lastly, no company or organization is ‘too large’ to fail in the United States. If you screw up, you need to liquidate. NO TAX PAYER BAILOUTS FOR ANYONE.
That seems like a mighty short-sighted view of macro economics. Anything can fail. Do you want to be around to pick up the pieces afterwards. Let’s just start with large and small companies not being able to make payrolls.
I disagree with what you are saying 100%. Thank goodness people with a good understanding of Macro-econ were able to step in and ward off disaster.
“It’s time for Democrats and Republicans to do the right thing and pass some reform, even if in incremental steps.”
I would be satisfied if they just did the right thing. i don’t know if this bill is it. We aren’t given an opportunity to find out until the NUCLEAR OPTION is put into place.
I agree with financial stability is in order but you don’t know if it is this bill that does that. I don’t trust Dodd at all. He was at the base of last years problems and now he has gotten religion? He needs to do more for my trust before I buy his pig in a poke.
@Moon-howler
If you don’t remove the ability to fail then how do fix the moral hazard question?
Assuming you have more regulations, more govt drones looking at the books and trying to figure out what A+B is.. What happens when the next bubble bursts? Will this plan protect us from a bubble ever happening? No. Will we resort to the same reconstruction plan and put a gun to your head and mine to give to some company because they were able to fool a regulator, wanted to make two bucks instead of one and now have to be saved or the system will ‘fail’?
So, what do we get from this other than giving Mr. Dodd his capstone?
Let’s not forget that the Secretary of the Treasury was the head of the NY Fed that oversaw the financial institutions of Wall Street during these deals.
And Paulson came out of Goldman Sachs…and…what’s the point?
Senator Dodd will introduce the bill next week, as I understand it.
Every part of my being tells me you are wrong. Look what happened to the buffalo when things were totally unregulated. Look what happened to the primeval forests on the west coast. Man squandered them just for greed. No other reason. How did Mirdoff get by with it? Greed.
I believe this thread is a perfect example of the one way street on this blog. People often crawl all over me for what I say. Yet Senator Dodd has been vilified up one side and down the other. He has served 36 years. 36 freaking years and not one nice word about him. Just the usual partisan crap. For all you know, his mother reads this blog and is a regular contributor.
With the exception of a few comments….this really isn’t dialogue. It is just a bunch of cheap shots and sound bites.
Tell me one thing not based on sound bites that Chris Dodd has done to create the financial disaster. And I don’t want to hear about Cross Country. I have no intention of calling up GMAC and asking them for a higher interest rate and he shouldn’t be expected to either. As I said, I got mine because I was a return customer.
Rez, Geithner has nothing to do with Senator Dodd trying to get a bill passed on Finance reform.
If the regulations aren’t there, what do you expect Geithner to do…go smack someone’s hand and say don’t do that, it isn’t nice?
Bizarro land here.
Moon, don’t blow my cover! Ixnay on the othermay!
All kidding aside, if you find out Dodd’s mama reads this blog, let me know, I have some stuff to say to her.
BTW, you can’t legislate greed away. Even the anointed one Oblamo himself can’t legislate greed away. Sorry.
Tangental to this discussion… This is pretty scathing from the WashPost.. Now, while there is more support for ‘fixing’ our regulatory fiscal engine the ideas themselves need not come from fantasy land. Let’s see what Dodd comes up with and hope it’s not a trophy for himself but something that’ll ‘fix’ things – my heart says it won’t but I’ll read it when it’s introduced.
http://www.washingtonpost.com/wp-dyn/content/article/2010/03/11/AR2010031102904.html
If Democrats ignore health-care polls, midterms will be costly
By Patrick H. Caddell and Douglas E. Schoen
Friday, March 12, 2010; A17
In “The March of Folly,” Barbara Tuchman asked, “Why do holders of
high office so often act contrary to the way reason points and
enlightened self-interest suggests?” Her assessment of self-deception
— “acting according to wish while not allowing oneself to be
deflected by the facts” — captures the conditions that are gripping
President Obama and the Democratic Party leadership as they renew
their efforts to enact health-care reform.
Their blind persistence in the face of reality threatens to turn this
political march of folly into an electoral rout in November. In the
wake of the stinging loss in Massachusetts, there was a moment when
the president and the Democratic leadership seemed to realize the
reality of the health-care situation. Yet like some seductive siren of
Greek mythology, the lure of health-care reform has arisen again.
As pollsters to the past two Democratic presidents, Jimmy Carter and
Bill Clinton, respectively, we feel compelled to challenge the myths
that seem to be prevailing in the political discourse and to once
again urge a change in course before it is too late. At stake is the
kind of mainstream, common-sense Democratic Party that we believe is
crucial to the success of the American enterprise.
Bluntly put, this is the political reality:
First, the battle for public opinion has been lost. Comprehensive
health care has been lost. If it fails, as appears possible, Democrats
will face the brunt of the electorate’s reaction. If it passes,
however, Democrats will face a far greater calamitous reaction at the
polls. Wishing, praying or pretending will not change these outcomes.
Nothing has been more disconcerting than to watch Democratic
politicians and their media supporters deceive themselves into
believing that the public favors the Democrats’ current health-care
plan. Yes, most Americans believe, as we do, that real health-care
reform is needed. And yes, certain proposals in the plan are supported
by the public.
However, a solid majority of Americans opposes the massive
health-reform plan. Four-fifths of those who oppose the plan strongly
oppose it, according to Rasmussen polling this week, while only half
of those who support the plan do so strongly. Many more Americans
believe the legislation will worsen their health care, cost them more
personally and add significantly to the national deficit. Never in our
experience as pollsters can we recall such self-deluding
misconstruction of survey data.
The White House document released Thursday arguing that reform is
becoming more popular is in large part fighting the last war. This
isn’t 1994; it’s 2010. And the bottom line is that the American public
is overwhelmingly against this bill in its totality even if they like
some of its parts.
The notion that once enactment is forced, the public will suddenly
embrace health-care reform could not be further from the truth — and
is likely to become a rallying cry for disaffected Republicans,
independents and, yes, Democrats.
Second, the country is moving away from big government, with distrust
growing more generally toward the role of government in our lives.
Scott Rasmussen asked last month whose decisions people feared more in
health care: that of the federal government or of insurance companies.
By 51 percent to 39 percent, respondents feared the decisions of
federal government more. This is astounding given the generally
negative perception of insurance companies.
CNN found last month that 56 percent of Americans believe that the
government has become so powerful it constitutes an immediate threat
to the freedom and rights of citizens. When only 21 percent of
Americans say that Washington operates with the consent of the
governed, as was also reported last month, we face an alarming crisis.
Health care is no longer a debate about the merits of specific
initiatives. Since the spectacle of Christmas dealmaking to ensure
passage of the Senate bill, the issue, in voters’ minds, has become
less about health care than about the government and a political
majority that will neither hear nor heed the will of the people.
Voters are hardly enthralled with the GOP, but the Democrats are
pursuing policies that are out of step with the way ordinary Americans
think and feel about politics and government. Barring some change of
approach, they will be punished severely at the polls.
Now, we vigorously opposed Republican efforts in the Bush
administration to employ the “nuclear option” in judicial
confirmations. We are similarly concerned by Democrats’ efforts to
manipulate passage of a health-care bill. Doing so in the face of
constant majority opposition invites a backlash against the party at
every level — and at a time when it already faces the prospect of
losing 30 or more House seats and eight or more Senate seats.
For Democrats to begin turning around their political fortunes there
has to be a frank acknowledgement that the comprehensive health-care
initiative is a failure, regardless of whether it passes. There are
enough Republican and Democratic proposals — such as purchasing
insurance across state lines, malpractice reform, incrementally
increasing coverage, initiatives to hold down costs, covering
preexisting conditions and ensuring portability — that can win
bipartisan support. It is not a question of starting over but of
taking the best of both parties and presenting that as representative
of what we need to do to achieve meaningful reform. Such a proposal
could even become a template for the central agenda items for the
American people: jobs and economic development.
Unless the Democrats fundamentally change their approach, they will
produce not just a march of folly but also run the risk of unmitigated
disaster in November.
Patrick H. Caddell is a political commentator and former pollster.
Douglas E. Schoen, a pollster, is the author of “The Political Fix.”
Oh, and here’s another bit of bad news for you: no matter how many laws, rules, regulations you put in place (they’re actually proposing banning the use of salt in NYC, that ought to make the Jews up there happy), they’ll find ways around the rules. These folks you think you can control through legislation have more lawyers than a Democrat contributor round table. They’ll just go around whatever legislative “hurdles” Dodd thinks he can put in place. The end result will be that it will be harder to do business in the United States (a la Sarbannes-Oxley) and we’ll lose more business, jobs, etc.
Sorry, I know that’s an awful lot of truth for one day.
Marin, Senator Dodd is not trying to get a health care bill passed. He is trying to pass a bill that contains some safeguards and regulations that would prevent horribly calamatous financial ills to befall us again. Does that mean none will. No, but we can prevent those we know about.
Who would have ever thought that some financial package called a ‘derivative’ would be one of the core problems in our financial underpinnings some 20 years ago?
Captain, you can nay say all you want. Because you say it doesn’t make it true.
I prefer banking and financial stops in place. Bet on your own money, not someone else’s.
I guess. This bill isn’t on my radar (in terms of researching it and generally caring about it). If he wants an up and down vote on it; I just don’t see him getitng the votes.
We’ll see what comes out – just don’t hold out hope that what comes out will be ‘good’ especially when his biggest advocate on the right got kicked in the jimmy by this rush to the floor.
Why wouldn’t he get the votes? Why would Republicans be obstructionists? It seems they wanted to take the teeth out of the bill? Why? Was it preventing their buddies from making a buck? I don’t understand why anyone would not want to work towards preventing another fiancial meltdown. Do we need one every decade, for crying out loud?
Sorry, I am seeing this as just blocking a bill for lack of good reason. I hope I am wrong.
New York Times:
Uhhh? Who do you think was the Administration’s point man for financial reform? You don’t think he is involved in any way? And what does Bizarro land mean?
Finally, why are you defending this action by Dodd when you don’t know what is says. That was what my post said–I didn’t know what was in it and I am not giving him the benefit of the doubt because, although I liked him before, I think he was at the center of the storm.
Truly wish you would read posts before the explosion. My posts were about trust and both people have some trust issues in my opinion.
Thank you….I was looking for some way concisely describe why Democrats refuse to include real malpractice tort reform in the health bill. You nailed it! That’s EXACTLY why! Sometimes you are just dead on!
And by the way, you are willing to accept the bill without knowing what is in it I guess because he is a democrat. Just a surmise. I said that I was reserving judgment until I knew what was in it because of trust. So, partisan? Hey pot, meet kettle.
It does seem like a no-win situation for them now – as you said they’ve painted themselves into a corner, and a very bad one at that. I also heard like you, what reconciliation was intended for and has been used for in the past – basically BUDGET reconciliation to fine tune numbers on large budgetary items. Not to pass a whole piece of legislation enacting new laws. It will be interesting to see how this goes – but either way for the Democrats – it isn’t going to look good for them.
I’m really surprised they decided to go the reconciliation route – I thought cooler heads would prevail. But Obama kind of pushed them into this, I think.
No matter what the outcome from this point forward, it will make for a very interesting election season in November.
I agree – that’s exactly why they don’t want to really do anything serious about tort reform. It would put half the malpractice lawyers out of business. Now, I’m not saying there isn’t the need for medical malpractice lawsuits – but far too many have gone way too far. Having a relative in the nursing profession and seeing what she has to pay for malpractice insurance – and also hearing about several times she’s been dragged into court for some malpractice thing (she’s an ER nurse), something really needs to be done about it.
I would also say I’d look a lot more favorably on healthcare reform if there was a serious attempt to do something about medical malpractice tort reform.
@Rez
Of course I want to know what the bill says but he has to bring it out of committee before we get to see the whole thing.
I don’t believe he caused the financial crash any more than I believe George Bush, Alan Greenspan, or whoever else popular to blame for something that was a complex issue. In fact, I have always admired Chris Dodd and most of the legislation he has worked on. Most, not all.
I think he got tired, from what i have read, of seeing the teeth taken out of what he was trying to fix. From what I have been able to determine, the rules for banks and non bank lenders were being discussed. Corker and his people were trying to weaken the restrictions on non bank lenders. Dodd finally felt he just had to pull the bill and push it forward rather than try to negotiate further.
The health care has nothing to do with this. I suggest taking that issue to the open thread if you want to discuss it. I have not put up a thread intentionally. I don’t have an opinion. Never could figure out what was in it. Too many big mouths shouting everyone else down to hear the real meat and potatoes.
Rez, I just want the bill out of committee. I said nothing about voting for it. I am not sure what is in it. Actually I do trust Chris Dodd on finance. Not unconditional trust but trust. I don’t trust him because of his party. I trust him because of who he is and what he has stood for the past 36 years. Is that partisan?
Regardless, I still want to see the bill before it is voted on. Its a long way from being voted on. Did you see my note about how Elena and I feel about being insulted?
Captain, maybe it should be harder to do business in this country if making it so prevents another financial crash. And what are you basing this opinion on? Have you read the Dodd bill?
Ouch. I mean, I would expect to say something like that myself because I’m a cold hearted free market bastage but didn’t expect that from you MH.
Our regulatory system does ship jobs overseas. It’s something that we as Americans have to get used to and represents the flight from CA, NY and MI of people and companies to more stable state economies.
I think for Dodd et al. we need to recognize the intestinal fortitude it takes to say; I know this regulation (bill) will put you out of a job but this is what America needs. From that perspective, I guess you can say that Dodd is a good guy. 🙂
Sorry I accidentally may have been one of those who started talking healthcare when it was really not about that issue.
@Moon-howler
What have I said to insult you, especially since I was accused by you of being partisan and something about Bizarro land, which I asked you to explain but you didn’t? Does you not about insults go in both directions?
That was when all I said was that I didn’t trust Dodd at this point.
What has Mr. Dodd stood for all these 36 years? He caroused with Kennedy in bars in the 1980’s including what sounded like some odd behavior involving a waitress. I will grant you I agree with him on some social issues and some I don’t.
But the things that had to do with Fannie Mae and Freddie Mac, the things about Countrywide and other banking issues do not engender my trust. And by the way, the NY Fed could have done more than just “you shouldn’t do that”. They either ignored or did not do what they were responsible in some ways.
That was “your note”. And explain when I have ever insulted anyone? That makes me madder than anything. I pride myself on sticking with issues and not attacks on anyone. I don’t come on here make inflammatory comments against people and without naming them, I think you know. And you don’t seem to mind at least one persons inflammatory comments that made incessantly about people who are conservative. With them it is telling everyone that you aren’t there to babysit. So one must think that you then agree with the comments especially since you feel you should go after me.
And yeah, I know, if I don’t like it I can leave. Sounds like shades of other blogs.
Financial reform is critically needed to make the markets work in the interests of the vast majority of Americans who work hard and try to save for their retirement, their childrens’ education and everything else that is important to most of us. Moreover, the interests of Wall Street are not aligned with the interests of the American middle class.
Before we go any farther, however, let’s be clear that the debate over financial reform and enacting smart regulations is separate from the debate over health care. The two are completely different issues. You can oppose Obama’s health care plans and support consumer protection in financial services.
Let’s look at two examples. First, the proposed legislation attempts to require stockbrokers and insurance agents to act in the best interests of their clients. Many of them are good people who do that anyway. However, many do not. Most people would be surprised to learn that no such consumer protection exists now.
The Investment Advisors Act of 1940 includes a loophole that has never been fixed and provides only for a vague “suitability” requirement when brokers sell a financial product to a consumer. This language is so weak that brokers can only be brought to justice in the most egregious circumstances. The “suitability” requirement stands in stark contrast to the “fiduciary” requirement that applies to true financial advisors. A fiduciary is required to act in their clients’ best interests at all times, as is a lawyer, doctor or other professional a consumer might hire. Dodd’s bill would eliminate the distinction and apply the fiduciary standard to everyone offering financial advice and other services. Big firms such as Morgan Stanley Smith Barney and Merrill Lynch are adamantly opposing this legislation because it would increase their costs and make them liable when their “advisors” do not act in their clients’ best interests.
See the WP article at the following link http://www.washingtonpost.com/wp-dyn/content/article/2010/03/06/AR2010030602078.html. See also the testimony of the Financial Planning Coalition at this link http://www.cfp.net/downloads/Coalition_HFSC_Testimony.pdf
Second, among other things, the legislation would enact stronger protections for consumers against abuses by banks, credit card companies and other lenders. This industry is not a free market. It is composed of a small number of huge corporations that have the resources to lobby Congress to get their way. It is not competitive and competition alone will not solve these problems. Who has not suffered by abuses from these companies and how can anyone oppose sensible consumer protections?
Third, one of the most serious problems that not even the Dodd legislation addresses, is the combination of commercial banking and speculative finance under the same roof. After the financial market crash of 1929 and the early 30s, Congress passed the Glass-Steagall Act in 1933, along with Federal Deposit Insurance. This legislation prevented banks from taking our deposits to the casino, and created deposit insurance to revive confidence in the financial system.
In one of the worst pieces of legislation in history, Congress approved and President Clinton signed the bi-partisan Gramm-Leach-Bliley Act (GLBA) in 1999. GLBA effectively killed Glass-Steagal and allowed firms to engage in all sorts of financial activity, conservative and risky. The results of GLBA bore full fruit in our recent financial market collapse as the financial corporations took outlandish risks and lost. When their bets paid off, they pocketed the profits. When the whole house of cards starting falling apart in 2008, consumers and taxpayers paid the price. They claimed they were “too big to fail” and that we had to bail them out. Heads, they win. Tails, consumers and taxpayers lose.
We need urgently a reenactment of Glass-Steagall in some form. However, absolutely nothing has been done to stop the sort of risky behavior that was a major part of the recent collapse. Financial corporations, including banks, are still dealing in credit derivatives, hedge funds, and everything else that helped bring on the collapse. Their senior management is still taking home ridiculous compensation, paid for by their customers and stockholders. Politicians continue to receive huge contributions to keep the entire mess unchanged. This is not a free market and we are setting the stage for a repeat performance of the same crisis.
I’ve been a Republican my entire life and urge my fellow Republicans to get on board with sensible regulation and reform that works in the interests of middle-class America, investors and consumers.
Bob,
Will the interests of wall street ever align with those of the middle class? Will the legislation achieve that? You use that as the central thesis for your arguement so – how do you see us getting to that end-goal?
How do we manage the moral hazard of not allowing companies to fail and bailing them out with taxpayer funds?
marinm – All good questions. I don’t think the interests of Wall Street will ever align with those of the middle class. Moreover, anyone who argues that Wall Street is a competitive marketplace in the sense of Adam Smith’s ideas of laissez-faire creating an optimal outcome for society is wearing ideological blinders. Wall Street, as we can metaphorically refer to big finance in the US, will pursue their own self-interest as does every other economic agent. In the absence of effective competition to create an optimal outcome for consumers, smart regulation is needed.
A great deal of the financial regulation we had, for example Glass-Steagal as I described in the original post, was eliminated under Clinton and Bush. I don’t think that either of those Presidents took office with the intent of dismantling our financial regulatory structure. The problem is that both succumbed to the increasing influence of money and campaign contributions in our political system. Both paid homage to the purse-strings of big financial corporations. For example, Gramm-Leach-Bliley came about as a result of Sandy Weill’s lobbying and campaign contributions (to members of both parties) to allow him to combine Citicorp, Traveler’s and other financial companies into the monstrosity we know as Citigroup, which was one of the culprits in the recent financial collapse.
Solving the problem? How do we reform our political system to make our elected representatives accountable to us, the middle-class and majority of our electorate, rather than the big-money interests? For now, the best I can come up with is to watch carefully who is taking money from whom and vote out elected officials who betray us in the service of their paymasters. I’m open to your ideas and those of any other Americans who care about the direction this nation is going.
As an aside, the issue of money in politics is critical locally as well. One of my favorite web sites is http://www.vpap.org. I’m doing a lot of research there (and of other campaign finance filings) and of other sources, and will have a lot more to say about that as the 2011 BOCS election draws near.
Moral hazard is another vital issue also. I agree with the maxim that if an organization is too big to fail, it is also too big to exist. However, this gets us back to the problem of the influence of money in politics. For example, Citigroup should have never come into existence. Its component corporations should have remained separate entities. We’re back to the same problem. How can citizens make their elected officials responsive to them rather than people like Sandy Weill? Where is a trustbuster like Teddy Roosevelt when need him?
Bob,
What’s interesting and very telling (and don’t take this in a negative way) is that you admit that the central thesis is weak (alignment of wall street and main street) and then in the next few paragraphs you don’t really provide any support for how a fix would really fix anything. You even admit that it won’t really fix anything as the issue really boils down to politics and electing the right people to work the issue.
That’s one of the problems I have with Dodd or anyone else trying to ‘fix’ the fiscal issue that we have. There really isn’t a target other than ‘to fix the fiscal mess’ and when you get into the details they suddenly become very murky or scary. The idea of a Consumer Protection Agency scares the crap out of me. If it were not only to create policy but to enforce it; holy hell is that a bad idea. Could we really trust so few fingers in the pies of every American? Wow that’s amazingly scary.
I respect that you have a solid grasp of many diverse issues (you can look me up in VPAP! ) but I believe that atleast your arguement needs to be refined to win over skeptics. I don’t really trust the govt to fix this issue as when was the last time you saw the govt run a profit on anything. 😉
@Rez
I just saw this. I don’t believe any of what I said was directed at you. We do disagree but I don’t believe there has been any fire, brimstone or gunfire involved.
Bob, thanks for your post. You have left us with some important things to think abouut.
I very much support whatever Dodd gives us to strengthen consumer protection and to hold all financials institutions, banks and non-banks to a standard.
I don’t care who stops corruption, democrat or republican.
vpap is a good thing. Unfortunately people hide behind corporations and other such entities.
I suppose all I could think as I read your post is what on earth was the Supreme Court thinking. I believe things will get worse instead of better.
@Moon-howler
I would hope not. I wasn’t sure what the exchange was about.
marinm – good feedback. It’s a hard problem to solve. However, even as someone with a lot of experience in financial services, and an intrinsic hesitation as a lifelong Republican to trust government to get things right, I still support much of what’s in Dodd’s bill. If regulation helps protect consumers and catch the crooks in my own industry, I think that those of us who are trying to be honest and do right by our clients will be better off. I have no problem with being accountable to both clients and effective regulators.
Moon – you are absolutely right about the political donors hiding behind LLCs and corporations. However, even those must register with state and other authorities and leave a trail. Problem is that most people don’t take the time to do that research – until now. You would be amazed at what I’m digging up in public records. Anyway, I’m trained as an analyst and enjoy this sort of thing. Let’s hold off on that until we get closer to the election next year.
I remember days long ago in graduate school and elsewhere when Republicans and Democrats debated fervently over issues but in the end they remained friends and both tried to achieve what they considered best for the nation. They compromised to accomplish positive things. In grad school, there was a fellow who always took the liberal side of things and I was known as the conservative. We used to attract a crowd when we started discussing things, and others would chime in as well. In the end, we all had dinner, drinks or whatever and stayed friends no matter how much we disagreed. No enemies at the pub regardless of political persuasion!
Those were the days of Buckley and Galbraith, Reagan and O’Neill. What happened to us? Now the idea is to defeat the other party even if they are trying to do something you know is good. I miss the old times.