Holding Wall Street Accountable

ECONOMY

"We cannot let the narrow interests of a few come before the interests of all of us," President Obama said last year in a call for "an overhaul of U.S. financial regulations." Buoyed by success in the long battle to pass comprehensive health care reform behind them, Congress has set its sights on reining in Wall Street's recklessness and providing new protections for consumers, reducing risk, and increasing transparency. The bill introduced by Senate Banking Committee chair Chris Dodd (D-CT) "would create a new consumer protection bureau within the Federal Reserve to guard against lending abuses," "create oversight of the enormous derivatives market,"and "give the government authority to wind down large, troubled financial institutions in an orderly way." If institutions that are "too big to fail" repeat the kind of disastrous behavior that sent the global economy into a tailspin in 2008, "the Senate bill gives the government the authority to wind down the firm with no exposure to the taxpayer," Treasury Secretary Timothy Geithner described. "No more bailouts. Instead, we will have a bankruptcy-like regime where equityholders will be wiped out and the assets will be sold." The legislation's wind-down provisions are similar to the insurance fund and resolution authority that the FDIC has to safely shut down smaller banks, and the fund is paid for by big banks, not taxpayers. Since September, Dodd has tried to work with committee Republicans Richard Shelby (AL) and Bob Corker (TN) to find bipartisan consensus. However, as a vote grows near, Republicans have been on the attack. Last week, Senate Minority Leader Mitch McConnell (R-KY) declared his opposition to the financial reform bill, claiming that it "institutionalizes...taxpayer-funded bailouts of Wall Street banks" and would give the Federal Reserve "enhanced emergency lending authority that is far too open to abuse."

MCCONNELL'S 'BAILOUT' LIE: McConnell has touted his opposition to financial regulation by pretending to speak on behalf of American citizens, opposing "bailouts" and "abuse." As Time's Adam Sorensen noted, McConnell's attack made "the exact argument pollster Frank Luntz urged Republicans to make earlier this year in a widely publicized memo." Luntz told the GOP to attack reform as "bailouts" and blame "Fannie Mae, Freddie Mac, the Federal Reserve" for creating the "bubble." A number of other Republicans -- including House Minority Leader John Boehner (R-OH) -- have repeated this false right-wing talking point. However, the disingenuous attempt at populist posturing to kill reform has fallen flat. CNBC's Ron Insana laughed when trying to explain McConnell's views, and MSNBC's John Harwood said that "Senator McConnell's argument is a little silly when you look at the text of the bill." Time's Mark Halperin told MSNBC's Joe Scarborough, "They are willfully misreading the bill or they are engaged in a cynical attempt to keep the president from achieving something." On Monday, Corker called his leader's attacks "silly," saying that the fund he designed with his colleague Sen. Mark Warner (D-VA) "is anything but a bailout." Yesterday, fellow banking committee member Sen. Judd Gregg (R-NH) praised the resolution authority as a "good approach." Following an in-depth analysis, the nonpartisan PolitiFact rated McConnell's claim that the financial regulation bill "actually guarantees future bailouts of Wall Street banks" completely false.

IN BED WITH WALL STREET: McConnell did not mention in his attack on Wall Street regulation that the week before he traveled alongside National Republican Senatorial Committee chairman Sen. John Cornyn (R-TX) to New York City for a private meeting with elite hedge fund managers and other Wall Street executives. The purpose of the meeting between the top Republicans and the financial executives was to enlist "Wall Street's help" in funding Republican campaigns in the fall and killing any tough financial reform. McConnell takes more money from the finance industry than any other sector. He has taken $1,147,924 for his current re-election campaign, including PAC contributions from megabanks like Citigroup and Bank of America. When pressed by reporters for details about his meetings on Wall Street, McConnell repeatedly refused to discuss the matter. But as the Wall Street Journal reported in February, Republicans have been "stepping up their campaign to win donations from Wall Street," "striving to make the case that they are banks' best hope of preventing President Barack Obama and congressional Democrats from cracking down on Wall Street." In a January meeting, Boehner told JP Morgan CEO Jamie Dimon that "congressional Republicans had stood up to Mr. Obama's efforts to curb pay and impose new regulations." Since 2009, contributions from JP Morgan, Citigroup, and Bank of America have all "trended toward Republicans." Hedge funds similarly shifted, going "from giving 2 to 1 to Democrats at the start of 2009 to providing almost half of its donations to Republicans by the end of the year."

MCCONNELL FOLDS, FOR NOW: Yesterday, a battered McConnell abandoned his "bailout" lie, saying, "I'm convinced now there is a new element of seriousness attached to this, rather than just trying to score political points. ... I think that's a good sign." The change in tone came, the Washington Post writes, "as the Security and Exchange Commission's lawsuit against Goldman Sachs for allegedly defrauding investors continued to dominate headlines, underscoring public anger at Wall Street and reminding lawmakers of the potential consequences of inaction." Senate Majority Leader Harry Reid (D-NV) said yesterday that he plans to "wait until early next week to introduce the financial overhaul package on the Senate floor," to give Dodd and Shelby "more time to try to reach a compromise." However, hurdles to cleaning up the financial industry remain. "I think there's a continuing tension in the caucus between those who hold out hope for meaningful and sincere bipartisan negotiations," Sen. Sheldon Whitehouse (D-RI) said, "And those who see Lucy yanking the football away from Charlie Brown for the umpteenth time." Economist Paul Krugman is similarly concerned that the White House isn't taking seriously the "possibility that Republicans will filibuster financial reform." Sen. Bernie Sanders (I-VT)warns that the fine print of the final legislation will determine "whether the Congress has the ability to regulate Wall Street or Wall Street continues to regulate the Congress." Lobbyists are fighting the effort by Sen. Blanche Lincoln (D-AR) and Sen. Maria Cantwell (D-WA) to bring transparency and price discovery to the shadowy derivatives market. Tomorrow, the President will go to New York City to begin the final push, reminding "Americans what is at stake if we do not move forward with changing the rules of the road as a part of a strong Wall Street reform package." It has been three years since the over-inflated housing market began to crash. It has been a year and half since the Wall Street meltdown and over a year since Treasury rolled out its principles for reform. It's time to get this done.

Let The Sun Shine In......

A Woman With Good Oaklahoma Values Takes On Wall Street.....

....and we should all be cheering her on an voting against Republicans and Democrats that do not vote for the ordinary Joes and Josephines but, instead, play the cash game with the wealthiest of the very wealthy.

 

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An Inside Outsider Takes On Wall Street

Wednesday 07 April 2010

by: Jim Hightower, t r u t h o u t | Op-Ed

(Photo: New America Foundation; Edited: Lance Page / t r u t h o u t)

Wall Street banksters -- who could possibly love them?

OK, presumably their mommas do, and possibly their pet dogs, but that's it. The general public loathes them and would be delighted to see the whole bunch tarred, feathered and deported to a barren atoll, where their punishment would be living with themselves.

These preening, narcissistic elites turned America's financial system into a rigged casino game that paid off big-time for them. Then it crashed, wrecking our real economy and making life miserable for millions of people. Yet, there they are, still on their exalted thrones, still playing casino games (now with our bailout funds) and still lavishing obscene bonuses on themselves.

Despite their perfidy, they've not been made to pay any price by our public officials. Americans of all political stripes have watched in dismay as both Democratic and Republican leaders rushed to pat the hands and soothe the fevered brows not of us aggrieved parties, but of the banksters.

(Democrats at least publicly scolded the Wall Street chieftains, while such Republican bosses as Rep. John Boehner of Ohio and Sen. John Cornyn of Texas have turned public dismay into disgust by openly blowing kisses to the disgraced bankers. Boehner and Cornyn have been pledging that their party will keep fending off legislative restrictions on executive pay if Wall Street would only show a little return love in the form of more campaign cash for GOP coffers.)

Good grief, is there no sanity, no smidgen of integrity? Are no public officials on our side?

Meet Elizabeth Warren. She heads an independent agency that Congress set up in 2008 to monitor and report on the government bailout of Wall Street -- and the main thing you need to know about her is that the big-shots of finance despise her. Now that's refreshing!

Warren doesn't play the smooth insider game of Bohner, Cornyn, Timothy Geithner and Larry Summers. She doesn't because she's not a Wall Street insider. "Dang gummit," she says in her native Oklahoma twang, "somebody has got to stand up on behalf of middle-class families."

While she doesn't have the power to reform the Street's ingrained culture of greed, she can shine a light on it -- and she has been a fearless and tenacious griller of Gucci-clad bankers and weak-willed regulators. Her admiring husband describes her as a grandmother who can make grown men cry.

Coming from a working-class family, Warren knows first-hand what it is to face financial crisis (including foreclosure) and to feel the crushing power of uncaring banks. "I learned early on what debt means, how vulnerable it makes people," she told The New York Times last month. At age 16, she won a debate scholarship to college, then worked her way into law school and ultimately became a leading authority on bankruptcy.

Despite her success as a lawyer, she hasn't forgotten her populist roots and purpose. Warren is Wall Street's worst nightmare: a middle-class champion who gives a damn about workaday people, is smart and tenacious -- and can't be bought.

She is now bringing her background, legal expertise and moral outrage to bear on a proposal that she conceived and developed: a new agency with real regulatory teeth that would exist solely to protect consumers against banker deceit, scams and greed. Big bankers keel over in a dead faint at the very mention of Warren's proposal for a totally independent Consumer Financial Regulatory Agency, and they're lobbying ferociously to kill it ... and to demonize her.

However, the Wall Street reform package already passed by the House does include the independent CFPA she proposed. The Senate bill also includes a CFPA, but wimps out by putting it in the soft, banker-coddling hands of the Federal Reserve. The fight rages on, and its hard to have much faith that Washington would really go against Wall Street -- but Warren's a real fighter, and she has strong progressive supporters both inside and outside the Capital City.

She gives us someone to cheer for -- and to back. To join Elizabeth Warren's gutsy push on our behalf, contact the grass-roots coalition called Americans for Financial Reform: ourfinancialsecurity.org, (202) 263-4533.

National radio commentator, writer, public speaker, and author of the book, Swim Against The Current: Even A Dead Fish Can Go With The Flow, Jim Hightower has spent three decades battling the Powers That Be on behalf of the Powers That Ought To Be - consumers, working families, environmentalists, small businesses, and just-plain-folks.

All republished content that appears on Truthout has been obtained by permission or license.

Let The Sun Shine In......

OPENING UP THE FED'S SECRET WALL STREET BAILOUT

Damn straight, we need to know which of the big banks are screwing us the most.

Jim Hightower

In the bipartisan bailout of Wall Street banksters, our own government not only failed to stand up for us taxpayers, it aggressively stonewalled us so we couldn't even know which giant banks were getting how much of our money.

Thank goodness, then, for the news services and federal judges who're finally compelling this cabal of bankers and regulators to tell us what they did with our public funds. In a unanimous decision, three Court of appeals judges say that the Federal Reserve (which, by the way, was the regulator that was supposed to be in charge of preventing such Wall Street collapses) must now disclose who got $2 trillion in sweetheart loans that the Fed doled out to its teetering bank buddies in 2008.

Astonishingly, top Fed officials had claimed in court that this information constitutes "trade secrets," and that disclosure of names would cause "severe and irreparable" harm to these giants. Who is the Fed fronting for? A bank consortium that includes Bank of America, Citigroup, Deutsche Bank, JPMorgan Chase, US Bancorp, and Wells Fargo.

I could not care less if these giants get taken down several big notches. Trade secrets, my hind in.

The Wall Street powers moan that mere mention of the fact that they had liquidity problems that needed to be plugged with two trillion taxpayer dollars would "stigmatize them." One Wall Streeter even called such revelations a "death sentance" for the giants, adding that disclosure of names would be cruelly punitive: "I don't see what public purpose is served by it," he huffed.

Hello... bankers: It's our money! We The People have a right to know who failed and who we bailed out. This just shows, once again, that we consumers cannot trust the Fed, for it will always serve banker interests – not ours. Instead of giving it more consumer authority, as some in Congress are proposing, all of its watchdog powers should go to a totally-independent consumer agency located outside the Fed.

"Court orders Fed to reveal records from $2 trillion bailout," The New York Times, March 20, 2010.


Let The Sun Shine In......