Why do Democrats want to rush through financial regulation??

[kentuck]

Everybody knows both Parties are getting big money from Wall Street. We know that Barack Obama got more money from Wall Street than anyone in the last election. We know that the Republicans are the ones getting the most money from Wall St right now. We know that Wall Street gives money to whomever they think will help them, regardless of Party.

Why not debate this issue? Why not vote up or down or every amendment offered by the Senate, Republican or Democrat? Many people believe the bill offered by the President is too weak. Why not make it stronger? Why not re-instate Glass-Steagal? Why not put strict regulations on derivatives? Why not separate these investment banks from regular banking? Why should taxpayers stand behind these gamblers? Why not break up these huge monsters?

There are a lot of issues to address that the President has not talked about. However, in order to debate them, the Republicans have to agree to have a debate and to allow Senators to present amendments to the bill. If they block debate, they have to accept responsibility and the Democrats and the media have to hold them responsible.

[Coyote_Bandit]

1. For the same reason

that they wanted to push through so-called healthcare reform: so they can say they did it.

Doesn't matter whether it is a good law. Transparency isn't important. Just get something on the damn books and take credit for it. We can fix it later.

[proudohioan]

8. That is really pathetic...

no, not your comment; the reason. I feel the same way.

I remember seeing Dennis Kucinich on The Ed Schultz Show a while back. Dennis was still planning on voting no on the healthcare reform bill; Ed asked Dennis,"why can't you give the President a victory on this one?" and Dennis answered that healthcare reform wasn't about getting a victory for the President, it was about doing the right thing for the people of this country.

I was flabbergasted that Ed even ASKED Dennis such a thing!

[Skink]

2. There is a lot of populist anger that nothing has been done and the financial sector is quickly...

returning to its old habits of making things up.

[Andy823]

3. Well...

I think the time is right, and I while I do think there needs to be a whole lot done on this issue, if they don't move to do something it could affect them in November, and if the republicans can take over the senate, well we will NEVER see any reform done.

With Goldman Sachs in the news right now, it will be harder for the republicans to kill any bill that comes up, and it will be hard for them to face the people back home who are really upset with wall street. Like any other reform, we need a starting point, and if we don't get one, well we just man not get any reform!

[Mass]

4. Because the Democrats are now in a purely reactive mode.

They think it will be good for them to have this bill out and voted, as weak as it is, just as they think it is good to have a health bill passed, and as they think now is the time for an immigration bill nobody talked about two weeks ago, purely because they react rather than govern.

[Motown_Johnny]

5. just so they look like they have a win before the mid term elections

[FrenchieCat]

6. Financial regulations have been debated for the past year......

and since the public doesn't know its mouth from its ass,
I'm not sure if them getting involved in the debate
would help anything, beyond giving folks with an agenda
the chance to muddy the water and confuse the hell at of those
already confused.

If anyone has actually read the financial reforms currently being shaped,
they should provide some background information so that an informed debate
can be had.

I don't read any of that in this thread.

Wouldn't that be a more reasonable approach....as opposed to this blind indictment
of Pres. Obama's motive, without basis of fact, beyond citing campaign donations
as the prime reason?

I realize we are all cynics to a point, but I'm not sure that Pres. Obama, or
even Democrats working on regulations, for that matter,
should simply be blamed for something just because he can be.

I realize that being skeptical is not a bad thing......
but I'm not sure the financial regulations that have been drafted to date
actually benefit the Financial industry to the point where this thread
makes total sense.

[kentuck]

7. It's difficult to debate with irrational blind partisanship.

Don't you agree?

[FrenchieCat]

9. I think including cited facts would be helpful.

although I guess if one's agenda is to tear down, rather than to inform,
than this thread could suffice.

Being a skeptic is one thing.....
indicting based on a bit of nothing is another.


Explaining financial regulation: Leverage and capital requirements

If you watched the Sunday shows this weekend, they were thick with politicians and administration officials arguing over financial regulation. But the gladiators were getting ahead of the audience, and they knew it. On Meet the Press, Treasury Secretary Timothy Geithner began explaining the need to "move derivatives out of the dark" only to be cut off by host David Gregory. "We have to stop and tell people what a derivative is," Gregory said.

Indeed we do. This week, I'll be trying to explain the basic elements of financial reform. And we're going to start with the most important bit: Leverage and capital requirements.
http://voices.washingtonpost.com/ezra-klein/2010/04/explaining_financial_regulatio.html

[kentuck]

11. Are you looking for facts??

What specific part of the post do you disagree with? Could you be a little more specific??

[FrenchieCat]

14. You made a statement in your OP that

Democrats want to "Rush" through financial reforms.

Could you provide some facts to back up this assertion,
that they are "rushing" through this, and why this is such a bad thing?

What do you think is missing in the regulations being offered?
What is it that you'd like to see that isn't there?
What steps would you recommend instead of what you are seeing?

you state without cite...."There are a lot of issues to address that the President has not talked about." Perhaps you could start by listing some of those?

I'd like some facts to agree or disagree with,
but what you provided were negative pronouncements,
and I'm not even sure what those were based on,
beyond your suspicions that Democrats must be up to no good,
all based on politics.

and yes....I am partisan to a great extent,
which is why I post here at Democratic Underground,
rather than at some Bi-partisan site that takes on Democrats
as much as it does Republicans.

[kentuck]

17. "What is it that you'd like to see that isn't there?"

Did you read beyond the first sentence??

Did not Reid say he was going to bring this "bill" up as early as tomorrow?

Most everyone, including much of Congress, believes this bill is watered down and does not offer near enough protection for the people. The derivatives are a big problem. Something has to be done about it. What does this proposed bill do about it?? What does it say about the size of the big banks? What does it say about bringing to justice anyone that committed fraud? None of that matters to you?

I don't think you want facts. I think you want to defend Barack Obama, no matter what. You are blinded by partisanship. I like the President and want him to succeed but I will continue to question his ideas when I think he is wrong. I think he is very weak on this bill.

[FrenchieCat]

19. You haven't given any facts......

your statement is general, and contains no details whatsoever.

you saying..."Most everyone, including much of Congress, believes this bill is watered down and does not offer near enough protection for the people"

What does that even mean specifically? :shrug:

I may agree with you, but you don't provide specific facts that I can agree with....
as an indictment is not a fact.

As for Obama doing no wrong,
certainly, there are, like everyone else,
some things that I don't care for that have happened,
and others that I strongly agree with......
So in discussing partisans, I may be less partisan than you.......
as it appears that there isn't much that you support that this Administration
has done.

[kentuck]

20. You are playing semantics...

The facts are that the big banks are not broken up by this bill presented by the President. The facts are that many Senators, including Senators Brown and Sanders, have serious questions about this bill. The facts are that Glass-Steagal is not re-instated. There are serious questions about this bill.

I have supported this President much more than I have disagreed with him. You can go back and check my posts. But he needs to grow a pair on this issue. Stand up and act like a real President.

[FrenchieCat]

23. Your statement "Big banks need to be broken up" is really too general.....

which is the problem that I have with your op.
Details are missing, including what it is that re-instating Glass-Steagal would do
in today's current set up.

And again, you don't detail the serious questions....
nor do you detail what it is that the current proposed regulations
actually do that you approve of? Anything?

See, I have issues when we discuss things we don't really know that much about,
and yet, believe that we know enough to make negative indictment in reference to them
as it pertains to Democrats.

If we can't discuss any details, then what are we doing really?
Generalizing and coming up with negative conclusions just cause we can?

[kentuck]

26. What part of "Big banks need to be broken up" do you not understand?

In 1995, the top six banks controlled 17% of the GNP. Today, they control 63% of the GNP. Are those the type of facts you are looking for? Does that not indicate to you that they might be "too big"? They have the potential, and will continue to have the potential under this bill, to take our economy under just like they did in 2008. They are the reason we lost 8 million jobs. Do we want to let them continue to be as big as they are now? I think that is a disaster waiting to happen. That is my opinion. What is your opinion? Or what is your opinion of your "facts"?

[anigbrowl]

35. So why aren't you aware that the bill provides for this? nt

[kentuck]

37. Show us the language...

I may be inclined to support it. :-) Obviously, several Senators have not read it either.

[anigbrowl]

40. Sure

I can't give you a page # because I'm posting via my phone and it's not practical to download the. Pdf file, but look at section 109, subsection (b)(5)(b). Also, I have quoted it here http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=8203281&mesg_id=8204133

...and explained in subsequent messages why it's not possible to introduce legislation to break up the banks directly (eg 'A bill to break up Citibank ').

[FrenchieCat]

42. Here.....

The financial regulations under consideration in the Senate do a number of things: The government receives additional authority to regulate over-the-counter derivatives and hedge funds. A new consumer protection agency within the Federal Reserve will regulate financial products. And the bill creates a process for federal authorities to dissolve financial institutions that are teetering on collapse.

The official name of that part of the bill is "Orderly Resolution Authority." It sets up a panel of three bankruptcy judges who convene and agree within 24 hours about whether a large financial company is insolvent. If a "systematically significant" firm is teetering on collapse, the Treasury, the Federal Deposit Insurance Corp. and the Federal Reserve would have to agree to liquidate the firm, using a special fund created with payments from the largest financial firms. The FDIC "shall impose assessments on a graduated basis, with financial companies having greater assets being assessed at a higher rate," according to the legislation.

We should clarify that there will be no change for small, mid-sized and even fairly large banks. When they're in trouble, there's already a well-established mechanism, under FDIC authority, that is not considered a bailout.

Instead, the "bailouts" at issue are those for the small number of very large, highly interconnected institutions -- those sometimes called "too big to fail" because their collapse would severely impact the rest of the economy.

The legislative language says that the money must be used to dissolve -- meaning completely shut down -- failing firms. Here's what Sec. 206 of the bill says:

"In taking action under this title, the (FDIC) shall determine that such action is necessary for purposes of the financial stability of the United States, and not for the purpose of preserving the covered financial company; ensure that the shareholders of a covered financial company do not receive payment until after all other claims and the Fund are fully paid; ensure that unsecured creditors bear losses in accordance with the priority of claim provisions in section 210; ensure that management responsible for the failed condition of the covered financial company is removed (if such management has not already been removed at the time at which the FDIC is appointed receiver); and not take an equity interest in or become a shareholder of any covered financial company or any covered subsidiary."

We spoke with several experts specifically about the fund in a previous report, where we fact-checked Republican Sen. Richard Shelby's statement that the fund is "available for virtually any purpose that the treasury secretary sees fit." The consensus of the experts was that the legislation put forward numerous rules on how the fund is to be used, with the express purpose of liquidating -- that is, shutting down -- failing firms. We rated Shelby's statement False.

McConnell said that the bill "actually guarantees future bailouts of Wall Street banks." One of the sticking points here, of course, is the word bailout.

We should acknowledge that free-market purists might see any intervention of the government into the financial sector as a "bailout." However, we think the more common understanding of the word means that the federal government gives or lends a company money to help it stay in business. Merriam-Webster, for example, defines a bailout as "a rescue from financial distress." We don't see how the liquidation of a company could constitute a "rescue." In fact, the bill pays for the so-called "orderly liquidation" by assessing a fine on the firms themselves, not general revenues, a situation somewhat similar to the way the FDIC has handled failing banks for many years now, using fees it collects from other banks to pay for orderly shutdowns.
http://www.politifact.com/truth-o-meter/statements/2010/apr/20/mitch-mcconnell/bank-bailouts-not-bill-liquidation/

Senate Bank Committee Bill Summary
http://banking.senate.gov/public/_files/FinancialReformSummaryAsFiled.pdf

Actual point by point Senate Bank Committee Bill
http://banking.senate.gov/public/_files/Sectionbysection03_16_10FinancialReformLegislationRevised2.pdf


We must remember that this is a committee bill, and not a final version...
as amendment to such will be debated if the cloture vote passes on Monday.
Then the bill must be merged with the House bill already passed.

[anigbrowl]

33. You obviously haven't read it

Or you would know, for example, that it includes giving regulatory agencies the power to break banks that are too big to fail.

In fact none of the people I hear loudly objecting to it have actually read it. You should, you will be pleasantly surprised. Assuming, that is, you really care about the issue rather than just wanting to complain.

[kentuck]

34. Since you have read it...

can you point out the page where the banks that are "too big to fail" can be broken up??

[Skink]

15. Who's debating?

the democrats that are against reform? We need to vote them out.

[MadHound]

10. So you're OK with Glas-Steagal not being reinstated?

You're OK with a financial structure that led to this collapse essentially being left in place so Wall St. can cause more devastation in the future?

There is broad public support for serious financial regulation being passed. There are large Democratic majorities in both houses of Congress. There is a Democrat in the WH. Such serious financial regulation reform could be made into law, Glas-Steagal could be reinstated.

So why aren't our so called leaders pushing such strict regulation?

Oh, yeah, they have to answer to somebody else, and that is not we the people.

[FrenchieCat]

12. what was the purpose of Glass Steagall originally?

and what would it accomplish in today's climate.

Please elaborate.

[MadHound]

16. Among other things, it kept deposit banks seperate from investment banks

Which in turn limited the amount of market speculation a bank could engage in and and control. It also protected bank depositors from seeing their money disappear, since a bank couldn't engage in wild speculation that would bankrupt it. Without Glass Steagall, banks were free to invest in derivatives, credit default swaps and other risky investments, which they covered with their depositor's money.

This need is as great today as it was in the thirties when it was originally passed.

[FrenchieCat]

18. and?

My understanding is that Goldman Sachs et al are now commercial banks, and that we really no longer have any Investment banks. In addition, I don't think Glass-Steagall dealt with Hedge Funds or derivatives at all, as there was not such thing at the time that it was first enacted.

WASHINGTON — The Federal Reserve said Sunday it had granted a request by the country's last two major investment banks _ Goldman Sachs and Morgan Stanley _ to change their status to bank holding companies.

The Fed announced that it had approved the request of the two investment banks. The change in status will allow them to create commercial banks that will be able to take deposits, bolstering the resources of both institutions.

The change continued the biggest restructuring on Wall Street since the Great Depression.

The request for the change to bank holding companies was granted by a unanimous vote of the Fed's board of governors during a late Sunday meeting in Washington.

The change of status means both companies will come under the direct regulation of the Federal Reserve, which regulates the nation's bank holding companies. The banking subsidiaries of the two institutions will face the stricter regulations that commercial banks are required to meet. Previously, the primary regulator for Goldman and Morgan Stanley was the Securities and Exchange Commission.
http://www.huffingtonpost.com/2008/09/21/morgan-stanley-goldman-sa_n_128147.html



Do you know what the current regulations currently coming up for a vote will do?

and if you do, what is it that you object to....?
or is it that there are some regulation that you would like to see that are missing....
and if so, what are they....?
Because my understanding is that amendments will be offered up to tighten up
what came out of committee.

Perhaps you know what some of those amendments are?

[MadHound]

21. And what?

Do you wish to continue having commercial and investment banking under the same roof? The hundreds of banks that have closed, the millions of taxpayer dollars spent by the FDIC don't mean nothing to you.

The repeal of Glass Steagall was the opened floodgate that allowed this insanity to invest our financial sector and began this economic collapse that we are in.

Does it not make sense to close this door in order to provide real regulation and control of the financial sector?

The current status of Goldman Sachs simply doesn't matter, as they can, at any time, change that status, or even proceed with investment activities. All that happens is that they will be regulated by the Fed rather than the SEC. Ooo, that makes me feel all warm and fuzzy.

As far as the current bill in Congress, it is weak, fatally weak. It doesn't institute tougher capital requirements, and while it relegates derivatives to the clearinghouses and exchanges, it doesn't address the underlying faults in the derivatives market, namely that derivatives will continue to make the markets more akin to gambling casinos rather than investment tools.

We have, at this point, a golden opportunity to be some real teeth into financial reform. Instead, as Obama once again vainly seeks for bipartisanship, the bill is being watered down and weakened. What this does is simply a slap on the wrist, and in five years, ten years, we'll have another bubble bust that will send our economy into a tailspin.

Sorry, but that is horribly irresponsible of the Democrats in Congress and Obama in the WH.

But then again, what else can we expect from a president whose top ten donors to his presidential campaign contains three financial institutions, Goldman Sachs, Citigroup and JP Morgan Chase, and one of the top five industries that contributed to his campaign was the financial sector.

[FrenchieCat]

24. List the current Investment banks that exist.....

[kentuck]

27. in name or in reality?

??

[MadHound]

28. My, my, aren't you the imperious one

Instead of demanding answers that you can find out for yourself, why don't you engage on some of the issues I brought up?

Oh, yeah, that's right. Never mind:eyes:

[Demeter]

13. The Unrelenting Election Cycle

It's the political equivalent of "next Quarter's Profits".

[GoldenOldie]

30. Reinstate the Glassman-Steagall Act

The Glassman-Steagall Act of 1933 was initiated due to the bank collapse during the early 1930's and it proved to be extremely effective until the 1980's when the Republicans, headed by Senator Phil Graham of Texas using the continual mantra of the GOP, that such strict regulations are restrictive to business? While the Phil Graham's and his fellow robber barons thrived, we now know what a National and global disaster the repeal of this act is.

I began working in the banking system in the early 1950's on the East coast and a few years later in West and West Coast....3 States. Although each States banking system was held to the Glassman-Steagall Act, they also had individual State laws and requirements. NJ, were not allowed to have branch banks and therefore each town or city had one or more individual banks, each with their own management and Board members drawn from elected and appointed bank members or community. Ariz, was allowed to have branch banks. Branch banks were allowed and determined on town/city, areas and population. All branch banks were headed by one main bank which had a board of directors elected from the community. California was similar to Arizona. All of the local and State banks were not allowed to cross borders and open branch within other States. All of this changed due to the repeal of the Glassman-Steagall Act.

The Act as well as the individual State requirements, held banks and management to extremely high standards. Banks could and were audited without prior notification by both the Federal Reserve auditors and by the Bank auditors. Not only was bank monies and assets audited but individual customer accounts and management interactions. Nothing was left unturned. When outside auditors entered the premises, which could last for a week, all employees knew that their books, and methods had better be in order.

Due to the repeal of Glassman-Steagal and the GOP, we have lost our local banks and control of our personal finances. The Bank of America, Wells Fargo, Citibank, etc., etc...ie, Corporate banking has grown like a fungus and they have no Glassman-Steagall to restrain them. I am sure that there are other posters better qualified than myself to explain this. Please feel free to correct me or add on.
Why debate what has already been fixed in the 1930's....it worked. Bring it back. Those benefiting such as the Phil Graham (remember he called us "whiners"), are fighting to preserve their status quo.

[derby378]

22. The greatest danger...

...is that Democrats on Capitol Hill will screw up financial reform the same way they managed to screw up healthcare reform.

[DCBob]

25. Its time to move on.. they have negotiated enough...

The GOPers on the Sunday shows were leaving an out... saying if they come to some agreement by tomorrow they won't filibuster. They are very close to having a deal and they are they are negotiating now. The vote is scheduled for tomorrow at 5pm.

http://www.cnn.com/2010/POLITICS/04/25/senate.wall.street/?hpt=Sbin

[kentuck]

29. Will that be good or bad?

If they pass this bill and move on??

[DCBob]

36. Definitely bad for the GOPers...

thats why they are stalling and threatening filibuster, etc.

[MadHound]

31. Move along, move along, better to get things done quickly and expediently

Rather than fighting to insure such reforms actually do the country some good, rather than being just a polite nod in the direction of reform that leaves the financial sector free to make ever more obscene amounts of money at the expense of we the people.

[kentuck]

32. Right !

Then pull out of Iraq and Afghanistan and declare victory. It makes no difference what we leave behind.

[DCBob]

39. They've been negotiating in committee for months..

Why not bring it to the floor?

[Karmadillo]

38. Kabuki done fast is kabuki done best.

nt

[bridgit]

41. Wall Street needs to know post haste that the party where they get to wear...

all the gold leaf lamp shades while eating other people's under garments with their silk toga' unfurling in a warm Mediterranean breeze are over regardless of who they donate to. Wall Street is supposed to be the engine of this economy...not the busted crankshaft. And every day they are enabled to think such thoughts out from under oversight & regs is another day they will do just that

If it hasn't already, Wall Street will become the new seat of American Corporate & Political Fascism - and they need to be suggested otherwise and 15min ago for that matter