Monday, March 21, 2011

Wall Street Still Selling Snake Oil to Main Street

In 2010 the Obama Administration pushed through Congress the Dodd-Frank financial reform bill, which has the policing power to regulate Wall Street shenanigans and actually put financial executives in jail. But the Republican-controlled House is quietly destroying the bill under the guise of “budget cutting.” They’re determined to defund this first semblance of real policing of financiers who are trashing the economic infrastructure.

The Dodd-Frank Bill boosted the power of the SEC and the Commodity Futures Trading Commission (CFTC) to regulate derivatives trading, which is what caused the economic tsunami to begin with. Derivatives trading was, in a nutshell, all that betting made by investors that bad mortgages would fail (and they did, as expected by everyone except the regular folk who were conned into signing on the dotted line to finance their homes with them). The Dodd-Frank Bill also set up a new agency, called the Consumer Financial Protection Bureau (CFPB), to protect consumers from creepy mortgage salespeople and greedy credit card companies. These regulatory agencies (i.e., the CFTC and the CFPB) need to expand their payrolls to function properly, and the Republican House has apparently wiped the needed money from the federal budget. The Tea Party wants less government interference in business, so they are happy to see these regulators underfunded. As Barney Frank said, the Republicans in the House are “letting Wall Street off the hook.” It’s pretty obvious to me who is actually trying to clean up Wall Street and who is trying to keep anything from changing.

I heard a joke last week that went like this: A corporate CEO, a Tea-Partyer, and a union organizer are sitting at a table on which there is a plate with a dozen cookies. The CEO takes 11 cookies, pockets them, and then turns to the Tea-Partyer and says, “That union guy is trying to take half of your cookie.”

[To my handful of devoted readers: I apologize for posting a day late. We had huge weather over the weekend in Mendocino County and our power went out Saturday night and is still out. I have gone to Ron's office to work and have internet access.]

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