Sen. Jim DeMint famously predicted that health reform would be Obama's "Waterloo(1)," saying: "If we're able to stop Obama on this ... it will break him." It looks like Jim DeMint's crowd might be using the same obstructionist strategy toward financial reform. more »
With billions in profits on the line, banks have waged an intensive, multimillion-dollar political and lobbying campaign against changes in the federal student loan program that would end billions in subsidies for the banks. They have enlisted six Democratic senators to raise concerns about the reform effort with Senate leadership. This report documents the extensive ties between the six senators—Blanche Lincoln, D-Ark.; Mark Warner, D-Va.; Tom Carper, D-Del.; Ben Nelson, D-Neb.; Bill Nelson, D-Fla., and Jim Webb, D-Va.—and major players in the student loan industry. more »
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“Hundreds of job-creating projects are still on hold because Michigan businesses and entrepreneurs cannot get bank financing. We can break the credit crunch and beat Wall Street at their own game by keeping our money right here in Michigan and investing it to retool our economy and create jobs.” more »
huffingtonpost.com — Unfortunately we're having the wrong debate here. The important question isn't who should be saddling students with enormous debt — the government or private banks. It's why anyone should be saddling them with enormous debt. The fact is, we don't have to run up a tab to get free higher education. Imagine turning a fee on Wall Street gambling into a "college education for free" card for every American. A small financial transaction tax on bankers' speculative deals could fund free higher education in perpetuity. To jump start the program, we could put a windfall profits tax on the $150 billion in bonuses Wall Street executives are now collecting, thanks to our bailout.
Recently we wrote that Sen. Chris Dodd's draft financial reform bill would create a "cumbersome bureaucracy." That wasn't an endorsement of a conservative talking point: The operative word was "cumbersome." The Right likes to use the word "bureaucracy" as an epithet, but the primary definition of bureaucracy is "a body of nonelective government officials." So what's the biggest bureaucracy in the world? The Pentagon.
Conservatives agree that we need a smart, efficient, well-run military "bureaucracy" to provide for the nation's defense, even though they wouldn't use that word. Shouldn't we demand the same kind of lean, mean efficiency from our "first line of defense" against financial disaster? more »
Rep. Alan Grayson has written a letter calling for the release of all documents and materials contained on AIG's internal servers. His idea deserves support. US taxpayers rescued AIG and own a majority (79.9%) of its shares. Serious questions remain about the payment of money AIG allegedly owed "counterparties" like Goldman Sachs: Why did the US government indirectly pay 100 cents on the dollar to these counterparties for debts from a broken company? Were the amounts claimed by these counterparties legitimate or inflated? Was there an attempt to negotiate the amounts down - and if not, why not?
There are other legitimate and important areas of inquiry, too: Why were large bonuses paid out, presumably to the same people that ruined the company and cost the taxpayers billions? Was there a secret deal to ensure that these bonuses were paid? Did regulators and auditors perform their functions adequately? Rep. Grayson quotes fraud investigators Bill Black, Eliot Spitzer, and Frank Portnoy as saying that "a thousand journalistic flowers can bloom" once these materials are released. They're right.
The public has a right to know. These materials should be released.
The full text of Rep. Grayson's letter is below. more »
When President Obama asked a group of senior executives for suggestions on streamlining government, it's unlikely that any of them suggested layers of new bureaucracy, vague marching orders, or management by committee. Yet Sen. more »
prospect.org — On Monday, President Barack Obama released a complimentary statement about Sen. Chris Dodd's latest proposal for financial reform, singling out its creation of "a new consumer financial protection agency to set and enforce clear rules of the road." This is notable largely because it is not, in fact, true. What the bill actually creates is a Bureau of Consumer Financial Protection within the Federal Reserve, a move that has raised great concern among consumer advocates who note, with more accuracy, that the Fed's numerous consumer-protection failures played a large role in the recent crisis. But the rhetoric around the creation of a new consumer-protection agency illustrates the central pitfall of financial regulatory reform: telling real reform from the cosmetic.
thenation.com — Sen. Chris Dodd came out swinging today to defend his revamped proposal for fixing the financial regulatory system, and he’s won cautious support from some key reformers. The primary complaint, however, remains Dodd’s choice to house a new Consumer Financial Protection Agency inside the Federal Reserve rather than make it a stand-alone regulator. It’ll be a bureau, not an agency. But critics point to a provision that allows an oversight board to rein in the bureau if it treads too heavily on the “safety and soundness” of the banking sector. Who sits on that board? The existing regulators, who failed to stop the subprime predation and risky lending that started all of this.