Robert Reich: The New Finance Bill: A Mountain of Legislative Paper, a Molehill of Reform

[kpete]

The New Finance Bill: A Mountain of Legislative Paper, a Molehill of Reform

Friday, July 16, 2010

............................................

Why do you think Goldman got off so easily from such serious charges of fraud?

Reliance on the discretion of regulators rather than structural changes in the banking system plays directly into the hands of the big banks and their executives and traders who contribute mightily to Democratic and Republican campaigns. The flow of money virtually guarantees that regulatory agencies won’t be adequately staffed to enforce the law, that penalties for violations won’t be overly onerous, and that all loopholes (what’s a “derivative”? what has to be listed on exchanges? exactly how much capital must be on hand for which transactions? How are the various forms of predatory lending to be defined?) will be easily stretched in future years. Wall Street lawyers will have a field day. The profit-for-nothing sector of the economy (law, accounting, finance) will continue to grow buoyantly.

Make no mistake: As long as there’s no fundamental change in the structure of Wall Street — as long as the big banks stay as big and are allowed to grow bigger, and have every incentive to invent new financial gimmicks with which to bet other peoples’ money — they will remain too big to fail, and too politically powerful to control.

Goldman’s share price, as well as those of JP Morgan Chase, Citicorps, Morgan Stanley, and Bank of America, will no doubt soar the basis of the final bill because their future profits are almost guaranteed. The pay of their executives and traders, and of the managers of hedge funds and private-equity funds they deal with, will likewise accelerate. In the short term the economy will benefit, at least to the extent financial entrepreneurship is now the apex of American wealth and innovation. But over the longer term we will be much weaker for it.

Congress has labored mightily to produce a mountain of legislation that can be called financial reform, but it has produced a molehill relative to the wreckage Wall Street wreaked upon the nation.

more:
http://robertreich.org/post/818142564/the-new-finance-bill-a-mountain-of-legislative-paper

[xchrom]

1. recommend

[lonestarnot]

2. Banksters get off. Molehills stank.

[Phoebe Loosinhouse]

3. K&R - More "reform" that just maintains the status quo

As is most of the "reforms" we are seeing.

A lot of storm and fury and then ultimately . . . nothing.

Reich's article is well-written and explicit about his concerns. I think his predictions that really nothing has changed will be borne out and we'll have a lull until we lurch into the next crisis.

This reform is just buying a little time while they accomplish the REAL goal - divert taxpayer dollars from Social Security and Medicare into more "private delivery systems".

[slipslidingaway]

4. knr n/t

[slipslidingaway]

5. Feingold Statement on Voting Against the Flawed Financial Regulatory Reform Bill

http://feingold.senate.gov/record.cfm?id=326403

Thursday, July 15, 2010

“At the outset of the debate over the financial regulatory reform bill, I made clear that my test for this bill would be whether it prevents another economic crisis. Unfortunately, this bill falls short. The reckless practices of Wall Street sent our economy reeling, triggered the worst recession since the Great Depression, and left millions of Americans to foot the bill. Despite these cataclysmic events, Washington once again caved to Wall Street on key issues and produced a bill that fails to protect the American people from the pain of another economic disaster. I will not support a bill that fails to adequately protect the people of Wisconsin from the recklessness of Wall Street.”

[Donnachaidh]

6. and he released that statement from under the bus

Every time I hear the word *sweeping* equated with this travesty, I think of sweeping the country under the rug. Literally.

[bvar22]

7. But it was a WIN, and thats ALL that counts!!!!

AND, they called it "HISTORIC"...thats gotta count for something!

Which way to the "Mission Accomplished" Parade?

:woohoo: :woohoo: :woohoo: :woohoo: :woohoo: :woohoo: :woohoo:

[mdmc]

8. ..