Wall Street Reform: Politicians Lie, Media Applauds, America Suffers

[depakid]

The same Washington spinsters who have driven our country into the ground seem to be out in full force this morning, claiming that their latest policy "victory" is the most "sweeping change" of our financial regulatory since the Great Depression.

Actually, it is nothing more than window dressing.

The real sweeping change of our financial system took place over the past 20 years. The irresponsible repeal of Glass-Steagall in 1999. The Commodities and Futures Modernization Act of 2000 by Larry Summers and Bob Rubin -- the one that legalized the most destructive financial instruments of all, derivatives. The leverage exemption at the SEC in 2004, asked for (in person) and received by Hank Paulson and friends.

Of course, there are small victories here -- there is better investor protection and, most importantly, an awakened citizenry.

What's not fixed?

- The Cops (regulators and ratings agencies) working for the crooks.

- Banks still Too Big To Fail.

- Banks gambling with your deposits.

- Banks allowed to "mark to myth" and use off-balance sheet accounting to bonus themselves into the atmosphere, with the taxpayer taking the fall.

- Banks getting trillions from the Fed, Fannie and Freddie -- AKA you, the future and present taxpayer.

What does it mean for us?

It means that the same people who brought you these horrible changes -- rising wealth discrepancy, massive unemployment and a crumbling infrastructure -- have now further institutionalized the policies that will keep the causes of these problems firmly in place.

Meanwhile, all involved in the facade try to pretend that this should be considered a success because, gosh, real financial reform is just too hard and those crafty banksters will just outsmart us anyhow. Many in the media are either too complicit, too confused or too lazy to contradict this spin, but the rest of us shouldn't buy that BS. Real and lasting financial reform is actually quite easy to implement -- and the last time we had a crisis of this magnitude, we kept the banksters in check for 70 years.

More: http://www.huffingtonpost.com/dylan-ratigan/politicians-lie-media-app_b_625885.html

[ProSense]

1. Hmmm, who to listen to: Dylan Ratigan

or Elizabeth Warren?

[Jennicut]

3. Warren over Ratigan anyday.

[SunsetDreams]

8. Oh absolutely Warren

[jenmito]

18. Elizabeth Warren for SURE. Dylan Ratigan is obnoxious and gullible

at the same time. I can't even watch his promo on MSNBC. He's so loud and monotonous.

[boppers]

2. "Bankers crucified at dawn, pundits complain that they weren't burnt alive."

*yawn*

[depakid]

6. I'd settle for responsible public policy that addresses the obvious problems

but neither this administration nor the "leadership" in Congress seems capable getting that done.

[HughMoran]

10. What the FUCK do you think they've agreed to?

[depakid]

11. Not a whole fucking lot of what caused the fucking problems

This legislation will not stop Wall Street speculation in derivatives, the financial system will still be dominated by a few "too big to fail" banks, the ratings agencies will still operate with inherent conflicts of interests and CEO's and executives will still get exorbitant pay to take high stakes, systemic risks.

In other words:

Window dressing and a pile of FAIL.

That bit about the auto dealers carving out their own little fraud exemption- that was a beauty too.

[HughMoran]

12. Bullfucking shit

Everybody but you says it is MAJOR reform and much better than expected.

You - it sucks.

You dislike everything though, so I'm not sure that this isn't a good thing that you are only complaining about it.

[depakid]

13. You just said a load of it-

Everyone honest person and commentator acknowledges the above- other than those who really could care less about any issue except to the extent that it has a bearing on some action by Obama.

[HughMoran]

14. EJ Dionne called it FDR type legislation

So it's either great or sucks depending if you're a pragmatic realist or an idealistic pie-in-the-sky dreamer.

[depakid]

16. LOL- EJ Dionne!

Here's what MIT economist Simon Johnson has to say (about one of the 4 major problems that the legislation had to solve):

“Breaking up big banks would actually increase system risk” is a refrain heard from top administration officials, ever more vocal after they helped kill the Brown-Kaufman amendment (that would have limited the size and leverage of our largest banks) on the floor of the Senate.

But while Mr. Geithner and his colleagues are still taking their victory laps and congratulating themselves on retaining “business as usual” after the biggest crash-and-bailout in world financial history, educated opinion starts to feel increasingly uncomfortable.

People who worry seriously about system risk break the problem down into several distinct buckets, including the nature of shocks and the way these are propagated across the system. In this typology, the “Chuck Prince problem” is in a class of its own....

...anks are bureaucratic power structures, after all, albeit ones that try to make money after some fashion. The people who rise to the top are not always the most risk averse – more likely they get on with the boss or reflect someone’s glory in an appropriate manner or are just not that threatening to the people who matter.

Under our existing rules, good managers can build up banks and – with the continuing lack of effective cap on the size of big banks – these institutions can become huge relative to the economy. And then Chuck Prince gets the job.

...This “Chuck Prince” problem is exactly what would have been addressed by Senators Ted Kaufman and Sherrod Brown. And it is exactly what this administration ducked. Find me a systemic risk expert – and I’ve been talking to the very best – who thinks what the administration did was a good idea.

The next time a megabank fails, do not send to know for whom the bell tolls. It tolls for Tim Geithner and Larry Summers (as well as probably 25 million or so people around the world who will lose their jobs in the ensuing recession). Failing to break up the biggest banks was a policy mistake for the ages. Senators Brown and Kaufman handed this opportunity to Treasury on a platter – but they knocked it over, trampled it into the ground, and now brag about their feat to the press.

This was pure hubris on the part of the administration, with perhaps some NIH (“not invented here”) thrown in – if they didn’t invent an idea, they can’t believe it’s worth pursuing.

The next time a big bank crashes and burns – causing vast economic damage – you can blame Chuck Prince (or his latest incarnation) if you wish. Or you can blame the people who hired the Chuck Prince-equivalent. But I would respectfully submit that most of the blame lies with the folk who thought it was OK to continue allowing the existence of megabanks that can be mismanaged into utter disaster.

The “Chuck Prince” problem is a completely unnecessary source of system risk that could have been removed by this administration.

More: http://baselinescenario.com/2010/06/23/chuck-prince-is-going-to-run-this-bank/#more-7775

[Name removed]

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[truedelphi]

4. + This household. n/t

[amborin]

5. K&R

[TheKentuckian]

7. I don't believe the thrusts of Ratigan's or Warren's points are mutually exclusive

However, in addressing the systemic issues that got us here and that was eating us like cancer for years before the last crashout, Ratigan's points are more compelling and he is focused on a broader picture.

What we have here is the legislative equivalent of a gussied up hoptie. You know, a five hundred dollar car with a three thousand dollar stereo system, and 1,500 a piece rims sitting on bald tires with steel showing on the sidewalls.

Nice peripherals but that raggedy car might drop dead or slide off the road anytime.
We need to fix the basic, fundamental stuff first and work our way out if it's one or the other. I'm confident we could have written our own ticket with this out of the gate, side by side or one after the other with the stimulus but if I have a choice I'm going motor before I worry about the new seats.

[HughMoran]

9. Many are comparing it to FDR type legislation

[Moochy]

15. K&R

for the truth.

[Odin2005]

19. The Banksters are in charge, they will not allow REAL regulation.

[Uzybone]

20. quoting Dylan Ratigan?

because a guy rants on cable TV doesn't mean he is telling the truth.