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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. Dodd's 'compromise' financial reform proposal does all these things.

The likely result? Banks and other financial institutions will still be tightly-run, aggressive organizations that can develop and sell complicated and risky new products in a heartbeat. But the agencies tasked with their oversight will be complicated and slow, encumbered by hard-to-follow rules and divided lines of authority. Guess who comes out ahead in that scenario?

Banks shouldn't be too big to fail, and bureaucracies shouldn't be too big to succeed.

As the New York Times notes in its headline, the Dodd bill "adds layers of oversight" to the reform process. Here's an example: Once upon a time (it seems so long ago now), it seemed as if our leaders understood that "too big to fail" meant "too big to exist." But there's no more talk of breaking up the big banks or subjecting them to the supervision of a "super regulator." Instead, oversight for them is given to a "Financial Stability Oversight Council" with nine members.

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Wage theft has become more common in the downturn, the best the country's top economic policy makers can say about the job situation is that they don't "expect substantial further declines in unemployment this year," and former labor secretary Robert Reich explains that signs of recovery are greatly exaggerated. Cheery.

So it's good news that the Senate passed a jobs bill that will focus on small business employment tax cuts, as well as funding $20 billion worth of road and bridge construction.

But there are so many immediate needs, jobs that need doing and people who could do them, that the government could put a lot more people to work very quickly, and should. Because when families are slowly falling out of the middle class or into abject poverty, it's usually a death of a thousand cuts, it's usually a depletion of resources across their networks of family and friends until no one can afford to help anyone else.

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The Chinese currency manipulation issue continues to make news.

Economist Paul Krugman lays out the stakes,

China is in effect imposing an anti-stimulus of that magnitude — which plausibly means 1.5 percent of GDP. This is not a small issue.

Senators Schumer, Graham and Brown revive legislation to push China: Schumer, Graham Push Bill to Pressure China on Yuan

Senators Charles Schumer, Lindsey Graham and Sherrod Brown revived U.S. legislation that would increase pressure on China to raise the value of its currency.

. . . “President Obama has outlined a plan to double exports but you simply can’t do that if you don’t address the currency issue,” Brown, an Ohio Democrat, said at a news conference in Washington today. “China’s current policy is out-and-out protectionism.”

130 Members of Congress call on the President to act,

Today a bipartisan group of 130 members of Congress, ranging from Dennis Kucinich on the left to Joe Wilson on the right, wrote to President Obama asking him to stop Chinese currency manipulation.

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The choice is simple. The reform legislation we have doesn't far enough, but it's a step in the right direction, as opposed to standing still or moving backwards. But a step in the right direction, however small, builds momentum for the next step forward. By some estimates, progressives made this reform a great deal better than it would have been had we not engaged. When this reform bill is signed into law, progressive should — and I have every reason to believe we will — start the fight to expand it even before the ink dries on President Obama's signature.

We can either take a step in the right direction, or we can take a huge step back. Standing still is not an option.

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The nation is facing a jobs crisis, but “crisis” doesn’t begin to tell the story in the African-American community. “Five-alarm emergency” comes closer. A report by the Joint Economic Committee released today underscores the severity of African-American unemployment and bolsters the case for a $100 billion jobs bill introduced in the House last week.

That report—which included some heretofore unpublished Labor Department data—helped launch a discussion sponsored by the Congressional Black Caucus today on what needs to be done to address chronic unemployment. That report noted some particularly troubling effects of the current recession among African Americans:

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• Phony GOP Attack On House Rules
• Dodd Bill Hit From All Sides
• Bipartisan Bill Presses China On Currency
• Weak WH Jobs Forecast
• Conservatives Shill For Bank Lobby on Student Loan Reform
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Where will the jobs come from? President Obama wants to double America’s exports over five years to help generate good jobs. With Recovery Act spending coming to an end, states and localities laying off employees, banks still not making loans, and consumers reeling from unemployment, stagnant wages, and losses in home values and retirement plans, increasing exports is one ray of hope to generate jobs. And the U.S. can’t go back to the old economy where trade deficits reached 6 percent of gross domestic product, and we were borrowing over $2 billion a day from abroad to pay for goods made elsewhere.

But if the U.S. is to sell more abroad and borrow less, countries with trade surpluses – notably Germany and China – will have to spend more, buy more, save less and export less. The G-20 governments, representing the leading economies in the world, agreed that is the only way to have the reductions essential to a secure recovery in the dangerous and unsustainable imbalances in the global system.

Only China and Germany clearly haven’t gotten the message. The Chinese continue unprecedented measures to manipulate their currency, now starkly undervalued against the dollar. This is a centerpiece of a comprehensive mercantilist policy of growth by dominating export markets. Germany, the world’s second greatest surplus country, continues to restrain demand at home, while subsidizing its high-end export engines.

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Government in many instances can do it better. Student loan reform –that awaits passage through reconciliation –will end tens of billions in wasteful bank subsidies and give much of the savings to students (via Pell Grants). How? By the federal government cutting out the middleman –ending the Federal Family Education Loan program (FFELP) that pays private lenders to dole out loans, when the government can do it for cheaper through direct lending. In other words, a single-lender system for student loans.

But bankers and their allies in Congress do not like this idea one bit. The student loan lobby is making its final push to kill student loan reform, proposing a last-ditch alternative plan to keep their profits.

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Today a bipartisan group of 130 members of Congress, ranging from Dennis Kucinich on the left to Joe Wilson on the right, wrote to President Obama asking him to stop Chinese currency manipulation. The crisis with China is accelerating quickly, and is so severe that economist from all over the political spectrum are calling for the U.S. to take drastic action against China currency manipulation.

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Several traditional media outlets are regurgitating the conservative spin that if the House uses the parliamentary procedure known as a "self-executing rule" or "deem and pass," it will be passing the Senate health care vote "without a vote."

Yet that is a false assertion.

MSNBC's First Read succinctly explains the process, in case any other professional journalists care to do their jobs.

...the health-care bill would be voted on INDIRECTLY, tucked into what's known as "the rule." The rule essentially outlines the rules for an upcoming vote -- in this case, it would be the vote on the package of reconciliation fixes.

By passing "the rule," the House also would "deem" the Senate bill passed (with a "hereby" statement. "We hereby deem..."). The House would then vote on the package of reconciliation fixes. But the Senate health-care bill would be considered passed even if they never vote on the reconciliation fixes [and] the bill must be signed by the president before the Senate takes up the reconciliation.

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Senate Banking Committee Chairman Christopher Dodd, D-Conn., unveiled his latest financial reform proposal on Monday, and the stakes for the new legislation couldn’t be higher. After consumer groups raised a major ruckus, Dodd has dropped one of his most egregious concessions to the bank lobby—cutting enforcement authority from the proposed Consumer Financial Protection Agency (CFPA). That’s good news: Without a major regulatory overhaul, the U.S. economy’s destructive boom and bust cycle will start all over again.

We’ve been down this road before. The Enron fiasco should have served as a wake-up call for policymakers, but instead, the weak federal response to Enron’s major fraud helped pave the way for the current economic slump.

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China argues that some American companies will suffer if China stops subsidizing manufacturing and adjusts their currency to market levels. They're right. The fight over Chinese violations of trade rules is also another story about Wall Street and big, monopolistic corporations vs Main Street and American workers.

A China Daily story says China's huge export surplus is being "misread." The Chinese government says that US companies -- the ones who close US factories, lay off workers, devastate communities and throw the costs onto the government -- are also beneficiaries of China's government subsidies. From the story,

China's large trade surplus is often used by the United States to argue why China should allow its currency to rise.

Yet most US officials ignore a very important fact: a majority of China's exports to the US are produced by US-funded companies and huge profits go back into American pockets. . . .

"China's cheap labor helps foreign companies cut wage costs and increase their profits. Ironically, the rising profits go into foreign bosses' pockets and China is left to take the blame for the trade imbalance," said Tan Yaling, an expert at the China Institute for Financial Derivatives at Peking University.

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Eighteen former members of the Federal Reserve’s Consumer Advisory Council (CAC) strongly endorsed the idea of an independent Consumer Financial Protection Agency in a letter released last week . Draft legislation released yesterday by Sen. Chris Dodd would instead place the CFPA in the Fed, an idea that the former CAC members specifically rejected.

The letter says that "The Federal Reserve has its hands full with responsibilities relating to safety and soundness and monetary policy." It singles the Fed out for special criticism in its handling of consumer issues under both Democratic and Republican administrations: "In 1994 Congress gave the Federal Reserve the power to outlaw unfair and deceptive practices in the mortgage market. The Federal Reserve waited until 2008 to issue their rule, long after the problem had become a crisis and after the market had collapsed. During that time, we and other consumer protection experts issued reams of comment and testimony calling on them to exercise their authority to protect consumers."

The full text of the letter is below:

Friday, March 12, 2010

Senator Chris Dodd
448 Russell Building
Washington, DC 20510

Dear Senator Dodd,

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