Is there anything else on the planet as twisted and useless as the United States Senate? Filibuster this, and secret hold that – the dysfunction is mind numbing. Now we have Senators Merkley and Levin trying to stop bank gambling, but they need to give auto dealers a free ride in order to do it. What kind of convoluted broke-back system produces such garbage?

The auto dealer exemption should never have passed the House in the first place. But Franks caved to Campbell and gave the Republicans another business victory at the expense of the public. The Senate should be fighting to fix the House bill, not succumbing to lobby pressure and matching it.

Damn, I hate to side with Wall Street, but this is just bad legislation.

Disclosure of lobby contacts might effect some marginal improvement in government accountability to voters, but it’s not a solution. Far from it. It’s a bit like diagnosing the patient (American government) with a chronic, incurable condition, rendering the only legitimate prescription to be pain management. We don’t have to accept that diagnosis.

What we need to do is address the core issue, which is corruption of the system: business exists to make money, but government exists to secure the rights of the governed. Business serves its shareholders, and indirectly its customers. Government is supposed to serve The People. When business spends millions of dollars to buy influence in Washington, it’s doing exactly what it’s supposed to do. It’s playing by the rules, as currently defined, to maximize  profits for its investors. In contrast, when government creates rules that favor business over “the general Welfare,” it is not serving its purpose. When it does so in exchange for money or favors, it has become corrupted.

The fact of the matter is that the voice of The People has been silenced in Washington. Congress no longer serves The People but rather the money making interests of the business lobbies. Lobby control of government is the natural outcome of a system that allows private money to drive the election process. Remove private money from elections and you will restore power to The People.

American government is in desperate need of a “lobbyectomy.” The patient is operable, and the prognosis is complete restoration of the voice of The People. The problem is that the surgery is elective, and consent for the operation depends on Congress.

“Once you understand that the resolution authority is an illusion, you begin to understand that the Dodd legislation would achieve nothing on the systemic risk and too big to fail front.”
Simon Johnson, MIT Professor, co-author of 13 Bankers

People need to take notice of what’s going on here. Senator Dodd’s bill absolutely needs to be sunshined and debated. This is not sound financial system reform and regulation, and all Americans need to be concerned. I’ll be the first to admit that I don’t understand all the aspects of cross-border financial institutions, but I do appreciate some regulation issues, especially where the detection component of resolution authority is involved. It just opens up an additional layer of confusion with tracking derivatives and off balance sheet transactions. Wasn’t that a big part of what was behind Lehman and Repo105?

Financial reform must definitely be high on our list of priorities, but we need to do it right. Our nation can ill afford another round like the recent meltdown. The government itself is unlikely to have the resources to put things back together next time.

I’m nowhere close to being an economist, but even I can see that Chris Dodd has put together a gift to the banking industry. Relying on resolution authority is one thing, but putting the CFPA inside the Fed and allowing the FSOC to veto its decisions . . . it’s like putting the hen in the fox house! And then leaving everything to the discretion of an agency that can be overruled, rather than setting the guidelines it will enforce into law — it’s slight of hand, and Dodd, the conman, will be gone before we find out we were ripped off.

The bill needs to have measures in place that will force the Fed’s hand, otherwise what are the chances they’ll have the nerve to test the system and pull the trigger? Real reform will have hard caps on size and leverage ratios, derivative reform, and definitive remediation requirements. It will also have a fully independent CFPA that’s not subject to FSOC control, and does have control over non-bank entities, like auto dealers.  As is, this will be a mess, but I’m still hopeful that real reformers like Ted Kaufman will stop Dodd from launching his lobbyist career on this watered down smoke-screen excuse for financial reform.