Why does Russ Carnahan want to weaken financial reform?

by: WillyK

Wed Jun 16, 2010 at 12:59:51 PM CDT

According to Gary Gensler, Chairman of the Futures Trading Commission, a kind of de facto derivatives overseer, the House bill :

... may be read to provide for a more liberal exemption for entities using derivatives to hedge commercial, balance sheet or operational risk, ... . Every exemption for financial companies creates a link in the chain between a dealer's failure and a taxpayer bailout. Every slice of the financial system that we cut out through an exemption could allow one bank's failure to spread like fire throughout the economy. It is essential that financial reform does not allow loopholes that leave interconnectedness in the system. Such exemptions will only come back to haunt us in the future.

Forbes.com's Lee Sheppard is even more emphatic:

Sen. Blanche Lincoln's derivatives proposal, usually referred to as the divestiture or "push down" requirement, is the only worthwhile proposal in the Senate financial regulation bill. The rest of the derivatives regulation component of both the House and Senate bills is meaningless filler.

You get the idea: Lincoln's Section 716 is the real thing; the House bill is window dressing. Even Barney Frank (D-MA), Chairman of the House Financial Services Committee, admits that the Lincoln proposal would do a better job of regulating derivatives.

Politico asserts that the force behind the New Democratic Coalition letter is Rep. Michael McMahon (D-NY), known for having, as the Wonk Room's Pat Garofalo puts it:

...argued for the extension of the Bush tax cuts for the wealthy on the grounds that people making $250,000 per year are "barely making ends meet.

So does Russ Carnahan really support McMahon's position on derivatives? And if he does, why?

An even bigger question is why do I have to keep writing about actual Democrats, and my Democrats from Missouri at that, engaging in maneuvers that we expect from Republicans?  Why do the guys who promise to support the middle and working classes put themselves out so readily to defend the interests of the big guys, in this case the big banks that, thanks to the era of lax regulation ushered in by the GOP, have dumped us into the biggest financial crisis since the Great Depression?

Claire McCaskill makes nice with the banks

by: WillyK

Sun May 09, 2010 at 00:08:45 AM CDT

According to the Americans for Financial Reform (AFR), a consortium of 250 organizations concerned with financial regulatory reform, the Safe Banking Act would have imposed size limits that would have given:

... the largest banks three years to transform themselves into leaner, more sustainable institutions - while maximizing shareholder value and without sacrificing any of the economies of scale. Importantly, a hard cap will also prevent new financial services firms from growing too large in the future.

Michael Tomasky notes that this amendment "was considered by liberal activists and economists to be the element that would add real teeth"  to Dodd's reform package.

I will be very interested to learn just why McCaskill joined with 27 Senate Democrats and all but three Republicans to defeat this legislation. Wasn't it Claire "Carry Nation" McCaskill who postured for the cameras just a week or so ago, waving a metaphorical hatchet at the malefactors who head up the too-big-to-fail Goldman Sachs?  If the financiers' bad behavior gets her so riled up, why did she vote against making it just that much more difficult for these greedy clowns and the rest of their wall street pals to make our economy go crash again?  How can she scold the big bankers and financiers and then turn around and help them to a great big victory?

Maybe McCaskill had good reasons - but I want to hear something other than hemming, hawing and the usual temporizing before I am convinced. Until then, I am afraid that Tomasky might be correct about what the behavior of timid centrists like McCaskill means:

This vote should demonstrate to liberals that the conditions for rapid change just don't exist in this country and that part of the task is to create those conditions

Lucy yanks the football...again

by: Michael Bersin

Mon Apr 26, 2010 at 22:12:30 PM CDT

The White House

Office of the Press Secretary
For Immediate Release
April 26, 2010
Statement by the President on Financial Reform

"I am deeply disappointed that Senate Republicans voted in a block against allowing a public debate on Wall Street reform to begin. Some of these Senators may believe that this obstruction is a good political strategy, and others may see delay as an opportunity to take this debate behind closed doors, where financial industry lobbyists can water down reform or kill it altogether. But the American people can't afford that. A lack of consumer protections and a lack of accountability on Wall Street nearly brought our economy to its knees, and helped cause the pain that has left millions of Americans without jobs and without homes. The reform that both parties have been working on for a year would prevent a crisis like this from happening again, and I urge the Senate to get back to work and put the interests of the country ahead of party."

As if anyone is surprised...

Apr 13th, 2010 at 1:45 pm
McConnell Slams Financial Reform Bill After Meeting With Hedge Fund Managers And Other Wall Street Elites

....What McConnell did not mention was that, last week, he traveled alongside National Republican Senatorial Committee chairman Sen. John Cornyn (TX) to New York City for a private meeting with elite hedge fund managers and other Wall Street executives. The purpose of the meeting between the top Republicans and the financial executives was to enlist "Wall Street's help" in funding Republican campaigns in the fall and killing any tough financial reform...

Plus ça change, plus c'est la même chose.

Blunt got the most money from big banks.

by: hotflash

Mon Mar 01, 2010 at 15:33:48 PM CST

"I've thrown my cap over the wall for Roy," Pawlenty told the Post-Dispatch in an interview Thursday. (...)

Pawlenty, the keynote speaker at tonight's session, said he will talk about getting the Republican Party back to its roots. He criticized his party's failures in the last couple of election cycles, mentioning that the party "blew it" and got fired for not living up to its principles.

"When we talk about being the party of personal and financial responsibility, then we have to do that," he said.

Hey, governor?

"Big Spender Congressman Blunt was part of the Congressional leadership team that turned a $128 billion surplus into a $1.2 trillion deficit and quadrupled the number of earmarks from 2,838 in 1999 to nearly 12,000 in 2008."

But Pawlenty doesn't sweat those details:

"I don't think it should disqualify somebody for service, just because they served in the past," Pawlenty said of Blunt.

But...but...Roy Blunt didn't just "serve" in the past. He was part of the leadership that "blew it".

Pawlenty would shake his head sadly if he heard that remark and wish that he really could live in 1984, where Big Brother would have me thrown in a cell with Winston Smith for such thoughtcrime.

Despite Pawlenty's proficiency at doublethink, Blunt takes no back seat to his fellow Republican when it comes to ignoring the obvious. Roy claims to represent average Missourians. This, despite the fact that he accepted more funds from big banks in the last two years than any other member of Congress. Missouri Pro-Vote's press release last Friday summed it up:

[ University City , MO ] - Local advocates of financial reform will construct and investigate a mock crime scene outside the University City Commerce Bank this Friday, February 26th in a demonstration to call out Missouri Congressman Roy Blunt and Commerce Bank for their complicity in the crime of killing consumer protection legislation that would benefit millions of Missourians. This action is being performed to encourage Congressman Blunt to stop representing the interests of big banking and financial institutions, and to start protecting Missouri 's taxpayers and small business owners from the greedy and reckless behavior of "Too-Big-To-Fail" financial institutions.

The American Banking Association, of which Commerce Bank is a member, along with several other big banking advocates and lobbyists have donated over $170,000 to Congressman Blunt in the last two years alone, making him the top receiver of banking industry money in all of Congress. In 2009, Congressman Blunt voted to block financial reform measures by voting against the Consumer Protection Act. The ABA, Commerce Bank and Roy Blunt are complicit in the killing of financial and banking reforms Missourians want and deserve.

Yeah, well, according to Blunt, those Pro-Vote heretics deserve to join me and Winston Smith in a crowded cell.

"Oho, the Wells Fargo wagon is a-comin' down on the Dow"

by: hotflash

Mon Feb 22, 2010 at 15:25:35 PM CST

Unfortunately, the financial environment that bred the current crisis was also bipartisan. Oh sure, we could blame Republicans Phil Gramm, Texas, and Jim Leach, Iowa, for introducing in 1999 the bill that repealed the Glass Steagall Act of 1933, an act which kept speculation tamped down. But those two Republicans only led the charge. In their wake was a 90-8 vote in the Senate, a 362-57 vote in the House, and a signature--as if it were needed--by Bill Clinton.

Not until January of 2010, a year and a half after the global economy wobbled on the edge of a chasm, only to be pulled back from the brink by almost a trillion bucks loaned to the very villains who caused the wipe-out, did Obama, with Paul Volcker at his side, propose reinstating many of the Glass-Steagall regulations. What took you so long?! And anyway, it's not as if a proposal strong enough to do the job will survive the butchering, compromising, and selling out that will go on during markup. If such a miracle did occur, Congress would freeze in a bi-partisan iceberg (real Dems vs. Rs and Blue Dogs) when it came time to vote on actual reform.

Part of the reason adequate reform isn't likely to pass is the banks themselves. They used taxpayer money from the bailouts to lobby against reform--and, they know how to spread the moolah to the right campaign coffers. Meanwhile, in 2009 the top five banks made their highest profits ever. And they paid bonuses amounting to $140 billion--about the amount of money it would take to cover the shortfalls in fifty states from the Great Recession that the banks caused.

Damn straight we're pissed.

The banks "have their boot on the neck of the American Dream." It's time to take it to the streets. At least that's part of the strategy that National People's Action has mapped out for pressuring the banks to stop ripping people off and start lending to small businesses and investing in communities. Last October, NPA led a coalition of groups that turned out thousands of protesters at the annual American Bankers Association convention in Chicago. They called it Showdown in Chicago, and now every time a TV station wants to illustrate the anger of the populace at the banks, they dredge some video of those protests out of the archives.

It's time to give MSNBC and CNN new footage. NPA plans to double down, triple down, quadruple down on the protests. There will be regional demonstrations in late April through mid-May. The plan is to focus on the two worst offenders and to turn the clubby atmosphere of their annual stockholders' meetings into circuses. All the members of last October's coalition--SEIU, for example, and the AFL/CIO--are itching to get going. Each march will involve at least a thousand, maybe far more--a flood of loud, angry and yet articulate protesters.

The NPA strategy is two pronged.

First, progressives can accomplish a lot by focusing their energy on regulators rather than on legislators: Ben Bernanke at the Fed, Sheila Bair at the FDIC, and John C. Dugan at the OCC (Office of the Comptroller of the Currency). In Mexico, MO, Jordan Estevao, an NPA organizer, recently explained the strategy to activists at GRO, one of the members of the Showdown in Chicago coalition.

He asked how many of us had been to Bernanke's house to discuss the banking problem. Lotsa laughter. But, referring to the protests against Bernanke's nomination, Estevao said that "because we 'went to his house,' he's now ... afraid of us." NPA is scheduled to meet with Bernanke on March 9th to discuss the actions they feel the Fed needs to be taking. For example, NPA will urge Bernanke to see that the Community Reinvestment Act is enforced.