Spitzer: The Democrats Blew It, Republicans Will Be The Champions Of Financial Reform

[girl gone mad]

I know this won't be popular here, but Spitzer gets right to the heart of my biggest fear. The Democrats missed an enormous opportunity to enact needed reforms to fix our broken financial system, choosing instead to preserve the status quo at all costs. Now the Republicans are in a position to seize on the populist outrage over bailouts and deficits, and win elections in the process. If this happens, we will no doubt end up worse off by every measure.

The Democrats Blew It, Republicans Will Be The Champions Of Financial Reform
Eliot Spitzer, http://www.businessinsider.com/the-democrats-blew-it-republicans-will-be-the-champions-of-financial-reform-2009-11">The Business Insider

Few things are as potent in politics as calling for change at a moment of fundamental dissatisfaction with the status quo. Nobody should know this better than the current White House. Gauzy words describing the possibilities for change are always more comforting than defending the current dire straits. That is why — in addition to all the substantive arguments — the current White House plan for banking reform is so troubling.

Let us fast forward a couple of months. Momentary GDP pops notwithstanding, the economy next year is likely to be in pretty sad shape. Consumer spending is sagging; foreclosures are still climbing (and may surge as ARMs re-set); unemployment is likely to be hovering in the 9.5-10.0 range; federal deficits and state deficits will be soaring; and Goldman profits will still be setting new records.

Added to this toxic political brew will be a new, and perhaps counter-intuitive, but highly successful political attack from the RIGHT: break up the banks. Imagine this: by next spring, an intellectual consensus will have emerged that the concentration in the banking sector that developed from the 1980s until the crash of ‘08 was misguided. Voices as disparate as Former Fed Chair Paul Volcker, Bank of England Governor Mervyn King, meta- investor George Soros, and the Wall Street Journal editorial page will be in agreement on this point.

A few brave souls on the Right — recognizing that the Republican Party has been bereft of ideas in its attacks on President Obama — will then try to re-define a populist, conservative attack by asserting that the White House has been captured by Wall Street. Real populism and change, they will argue, will come from the Republican, not the Democratic, party.

The power of such an attack from the Right should not be underestimated. There will be a huge first mover advantage that goes to the candidates who grab the real banner of attacking the structure of Wall Street as having been the root of the crash of ‘08. We Democrats are spending way too much time wringing our hands over the new, “reformed” structure of regulation, and not nearly enough focusing on restructuring the banks. Congress continues to mediate the intramural battle among regulators who are defending turf in the next regulatory flow chart. Yet the real debate should be how to take the big banks and make them smaller: how to peel off proprietary trading and other high-risk endeavors that are now being funded and guaranteed by taxpayers.

http://www.businessinsider.com/the-democrats-blew-it-republicans-will-be-the-champions-of-financial-reform-2009-11">More...

[Florida Blue]

1. The Health Care Bills make

A Cluster-F**k look organized.

[JuniperLea]

3. Oh, has the Senate passed a bill yet?

Did I miss something?

[Florida Blue]

15. I probably don't understand your comment, but

I was discussing what is being prepared to go to the floor of the House and the 2 committee bills in the Senate.

[ChiciB1]

2. He's On The Dylan Ratigan Show A Lot... I Watch Ratigan As Much As I Can

these days! I do think he talks some REAL SENSE!!

[emulatorloo]

4. It is always interesting to hear what Spitzer is thinking.

Thanks for the link.

[SemiCharmedQuark]

5. This is a good article.

Rec that up

[Dr Robert]

6. so now we're listening to Gov. Callgirl? surely we should trust his judgement, right?

[Why Syzygy]

7. Yes by all means, leave your brain in remote parking. nt

[Dr Robert]

10. his judgement is questionable, so are his conclusions

but since you like him so much, maybe you should work for his reelection.

[Why Syzygy]

13. Perhaps you

should think about reevaluating your narrow minded knee jerk prejudices.

And welcome to DU :hi:

[Why Syzygy]

8. He's got it right. IF they do so.

Clinton's administration was the author of deregulation. If Obama's is not interested in reinstating regulations, they will LOSE. I'll not vote for a Republicon, but I don't care WHO fixes the mess as long as it gets fixed.

[westerebus]

18. Or.

They could just promise to regulate the financial markets. It seems to work well for Democratic pols.

Change you can believe in. Where did I see that before?

[aquart]

9. Yeah, the Republicans COULD return to power that way.

When do you think they will get that much sense?

[Bitwit1234]

11. Well since bush and the republicans are responsible for the mess

maybe they know what caused it and are going to try to change THEIR WAYS to help fix it.

[stray cat]

12. He is right if the dems don't decide to do something responsible but don't count on the GOP to do it

[checks-n-balances]

14. Those have been my thoughts exactly

Unfortunately, I think we'll see this happen.

[Crewleader]

16. k&r

It's Time To Fire Tim Geithner

Dylan Ratigan|Nov. 2, 2009, 1:37 PM


A year ago it was revealed to the American people that our banking system is a legalized Ponzi scheme in which bank and insurance CEOs pay themselves billions of dollars in personal compensation to lend and insure assets with money they don't have to customers who can't pay back the loans.

In those dark days between the fall of Lehman Brothers and before the presidential election, we were often carried through that time by the small glimmer of hope that at least we would soon have a new leader who would hopefully fix this mess and punish those responsible.

http://www.businessinsider.com/dylan-ratigan-its-time-to-fire-tim-geithner-2009-11

[troubledamerican]

17. Wow. I expected to see more DU buffoons attack Spitzer for being the messenger.

Come on, DU dopes. Where's the customary retardation?

Don't you understand? Spitzer's on OUR side. That means: ATTACK him.

[pscot]

19. Spitzer is half right

The Democrats failure to reform the financial industry will hurt them, but it's hard to imagine the GOP taking on the banksters.

[h9socialist]

20. Foxes and Chicken coups

Imagining the Republicans championing financial reform is like imagining the Council of Catholic bishops to campaign for reproductive freedom! In any event the most reform they'd ever be capable of is greater access for foxes to the chicken coup.

Former Governor Spitzer needs to adjust his thinking -- the Republicans only want to kill reform, and he knows it.

[happyslug]

21. But he is right, given a choice between doing something bad or nothing people will demand action

And that is what Spitzer is talking about, that the GOP will come out for a bad plan, but with the democrats having NO plant the people will go with the side that has a plan. People do do this especially during hard times, the classic case is the 1936 election, the New Deal was NOT working (It would take the second New Deal passed about 1938 as the depression hit its worse year AND congress finally set up programs, such as Fannie-mae, then a US Government agency, sold off in the late 1960s, and extensive federal spending that finally ended the depression as WWII approached) BUT the Democrats had a plan, the New Deal, while the GOP just opposed that plan. The result of FDR end up winning 46 out of the 48 states for people will vote for a plan, even a bad plan, over a side with no plan. This is Spitzer's fear, that the Democrats have NO PLAN to fix the problem of the banks, while the GOP has a bad plan (eliminate ALL remaining regulations on those banks). In such a situation the Democrats could lose the 2010 mid-terms and the 2012 re-election campaign.

[h9socialist]

22. Let me re-phrase . . .

I suppose I'm just shell-shocked by the notion that the Republicans would ever stand up to Wall Street on anything. I should say that the basis of my answer is my belief that any Republican proposal for reforming Wall Street would equal no change wrapped in a lot of double-talk. But I do concede that that probably is a "plan" to them.