“A Half-Fast Bill and Premature Evacuation!”

Powerful Financial Regulation would be good for all Americans!

The Senate passed their version of financial regulation, (S.3217) ‘The Restoring American Financial Stability Act of 2010.’ It now moves to conference to be melded with the House Bill, (HR4173) officially called ‘The Wall Street Reform and Consumer Protection Act of 2009,’ which passed the House 223-202.

Majority Leader, Harry Reid, with the help of Democrats and a few Republicans, in a moment of premature evacuation brought a half-fast piece of legislation to the floor without addressing or revisiting some of the most important amendments up for consideration.

Despite passing with a vote of 59 to 39, the Bill is weak and falls far short of its potential of fixing a messed up banking system, economy, the gambling on derivatives, and the Federal Reserve. Several amendments were added to strengthen the bill, but some of the most important failed to pass or were not brought up for vote. And there is little hope that it will get fixed in Conference.

Conferencing of the Bill will be conducted by Senators Shelby, Chambliss, Lincoln and Representative Barney Frank and a few others. But is it salvageable?

The bill will do very little to help the American people and very little to curb the abuses, gambling, and criminal activities of our Big Banks and other large financial institutions.

Fifty-three Democrats voted for the bill moving it along despite its obvious weaknesses. They were joined by both Independents and four Republicans. The rest of the Republicans voted against it, but their vote was mostly posturing and should, in no way, be viewed as a vote for the right reasons.

Only two members were Senatorial on this legislation which was extremely important to ours and the world’s financial survival. Both were Democrats. Maria Cantwell, from Washington, and Russ Feingold, the Senator from Wisconsin, voted no in an effort to push for a stronger more affective bill—one that would truly help ‘the people.’

The real disappointment in the Senate’s passage of this bill were the yes votes of several Democrats, which essentially ended the possibility of making this bill powerful enough to be worthwhile.

No votes by: Sherrod Brown and Ted Kaufman, who introduced the amendment to break up the banks; Blanche Lincoln, who introduced the amendment to make derivative trading transparent—bringing it out of the shadowy underworld; Jeff Merkley and Carl Levin, whose amendment would bar banks from propriety trading; and Sheldon Whitehouse, who introduced the amendment to give states the right to enforce usury laws on interest rates, would have sent a message that the bill needed to be strengthened and would have also extended the much needed debate.

Ezra Klein, of the Washington Post, in his article “Looking Forward to FinReg,” describes the interconnection of a few of the amendments. He also points out the problems Merkley and Levin had trying to pass their Volkerlike rule even though it had the support of the President.

Despite the passage of their amendment’s, which helped to improve the bill, no votes from Senator Al Franken and Independent Bernie Sanders would have sent the message that the Senate’s job was not done. Additionally, a no vote and statement from Evan Bayh, that he would like to see a stronger bill, would have helped the people of Indiana before he left Congress.

The biggest disappointments of all were the yes votes of Majority Leader, Harry Reid, and the Chairman of the Banking Committee, Christopher Dodd. Dodd’s failure, as he leaves office, to kick ass on his way out the door is painful. Reid’s inability to see the inherent weakness of the bill and his insistence in hurrying a bill this important through the Senate to meet a deadline driven by a Congressional break is incomprehensible. Maybe the people of Nevada are right—maybe it’s time for Senator Reid to pack his bags.

The failure of this bill to address the most prescient issues of financial reform—breaking up the banks, regulation of the shadow derivatives market, ending proprietary trading, and greater control of predatory lending practices—makes us vulnerable to another, more devastating, financial crisis.

Also of deep concern is the creation of a bureaucratic nightmare, The Consumer Protection Agency. At a time when we need to scale back the size of government Congress insists on adding thousands more government employees. A few pages of legislation could do as good a job by giving more authority and a couple hundred people to existing regulatory agencies.

The CFPA will be a massive waste of taxpayer dollars. Better consumer regulation should not require a new agency to make up for the inefficiencies of existing regulatory agencies. Fund them properly and require them to do their job!

But, that’s how Congress tries to make up for their failures. And let’s be honest, the problems we face today were created by Congress with the help of incompetent regulatory agencies and greedy capitalistic pigs that cashed in on the deregulation and reluctance to enforce existing regulations. It still comes back to Congress’s failure to see and correct their failures before a crisis occurs. It comes down to money—money in the form of huge campaign donations.

And they’re about to fail ‘the people’ again!

Let’s take a good look at some of those failures:

  1. First, and most obvious, was the passage of Gramm/Leach/Bliley in 1999—which essentially repealed Glass-Steagall, which protected us from predatory bankers for over 68 years.
  2. Second, was Phil Gramm’s midnight insertion of the Commodity Futures Modernization Act into an Omnibus Bill which resulted in the Enron and WorldCom meltdowns.
  3. Third, was the vilification of CFTC Chairwoman Brooksley Born in 1996 by Greenspan, Rubin, Summers, and the Congressional Committees that conducted hearings because she had the audacity to attempt to regulate the shadowy derivative’s market.
  4. Fourth, are the many banking acts that related to bankruptcies, interest rates, and fees that have ripped the heart out of the middle-class.
  5. And finally, the stripping of the regulatory agencies by the Bush Administration virtually rendering them impotent, and Congress’s mute response to this flagrant gutting of the agencies.

Congress seems incapable; incapable of protecting ‘the people’ and identifying this historic opportunity to make up for their failures. An opportunity to really do something good for a change.

One would think that Senator Luger would at least be pounding on his desk in support of Blanche Lincoln’s derivatives amendment, insisting that it be stronger and brought up for a vote, considering he chaired one of the hearings that could have put an end to the destructive derivatives market in 1996. Had he sided with Brooksley Born then, we wouldn’t have a potentially cataclysmic $600 trillion market that everyone is fearful of exposing. He sat mute as the Majority Leader side-stepped the scariest issue of all. The very issue that could cause financial armageddon.

More likely, they’re frightened by what will happen if they do expose the derivatives market; financial armageddon!

Senators like Dodd and Gregg are leaving Congress now, hoping that the destruction they’ve caused won’t be felt for a couple more years and their complicity will be forgotten. They know that the uninformed American people possess very short memories and even shorter attention spans.

So what is the rest of Congress waiting for? Another crisis?

Banks have proven that they cannot be good citizens so the reinstatement of Glass-Steagall or similar legislation is imperative. That could be accomplished by either the Brown/Kaufman amendment or the Cantwell/McCain amendment, or both.  Everyone who was a member of Congress and voted for the Gramm/Leach/Bliley Bill in 1999 should have voted for Brown/Kaufman, and insisted that Cantwell/McCain be brought to the floor for a vote. For some reason they didn’t!

Another short-sighted Congressional failure. You’d think that Congress would tire of failure.

This legislation was an issue of voting ‘for the people’ or for the banks.

And again, ‘the people’ lose!


If you’d like to find out how your Senator voted you can easily find out at The Roll Call Vote at the Senate web site.

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