The most important remaining battle to rein in Wall Street is over Senator Blanche Lincoln’s measure to stop the big banks from being subsidized by taxpayers for their risky derivative trades. Miraculously, it’s still in the bill but it’s on life support. The bill has now gone to the conference committee where differences between the House and Senate bills are to be ironed out.I sure hope people get active and deluge their representatives with e-mails, letters, and phone calls. That is the only antidote of the "little guy" to the big money that is buying Congressmen.
But official Washington (read: dependent on Wall Street for money) is dead set against it. Even Barney Frank — who Massachusetts voters used to consider a reliable progressive until he became chair of the House Financial Services Committee — has vowed to kill Lincoln’s provision. And the White House says the measure is “not core,” which in Washington-lingo means “you’re free to dump it.”
Big, big money is at stake. Wall Street’s five largest banks have a corner on the trade, raking in about in about $30 billion in over-the-counter derivatives last year. It’s the single largest reason they’re too big to fail. So they’re spending like mad on Washington lobbyists and campaign donations in order to keep the subsidy in place. (Lincoln’s provision doesn’t force them to give up derivative trading, by the way; it only forces them to do it in a separate entity that doesn’t get subsidized by deposit insurance or the Fed’s discount window).
All the guns are aimed at this measure. But it’s still possible that the people can prevail, if we’re organized and active.
Saturday, May 29, 2010
How Washington Works
Here's a bit from a post by Robert Reich on his blog that spells out what big Wall Street money is trying to buy:
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2 comments:
Thank you for the post.
I must admit to taking a mind break from news except for tracking the oil leak a little.
Just get frustrated so often and need to forget it all.
The oil leak is depressing. It is criminal negligence by BP. And BP has a history of poor operating procedures resulting in workers being killed and oil spilled. This one takes the cake. I'm hoping this results in the bankruptcy of BP. That will send the needed message to oil companies: Don't cut corners for quick profits.
I'm discouraged by Obama stopping all production and exploration. That is closing the barn door after the horses have fled. It is purely a grand stand gesture. The sad fact is that the US needs oil production from the Gulf. Instead of gestures, Obama should focus on getting regulations tightened and laying down the law to the oil companies. Stop playing games. Energy is essential and buying from the Middle East is hiring terrorists. (Canada sells oil to the US, so shutting down the Gulf means more sales from here, but I would rather the US do the right thing than have Canada take advantage of stupid gestures.)
I do believe oil can be produced safely. They have to treat it like airline crashes. If you remember, these were all too frequent in the 1950s & 60s and even into the 1970s. But the National Transportation Safety Board laboriously investigates every crash, gets to the root, then issues regulations to ensure that kind of crash doesn't happen again.
I worked on software safety for the Canadian dextrous manipulator -- robot arm -- for the Space Station. It is incredibly hard to analyze safety into a product, but combining safety analysis during design with investigation after failure is very effective.
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