The President was right to call out John Boehner today for describing our economic catastrophe as "ant" that didn't deserve a "nuclear" response. That "ant," as the President pointed out, "led to the loss of nearly eight million jobs" and "cost people their homes and their lives savings." But as he did so, the President seriously oversold what the Dodd-Frank bill will actually accomplish:
"W) e’re on the verge of passing ... reform that will prevent a crisis like this from happening again. It’s reform that will protect our economy from the recklessness and irresponsibility of a few. Reform that will protect consumers against the unfair practices of credit card companies and mortgage lenders. Reform that ensures taxpayers are never again on the hook for Wall Street’s mistakes."
Mr. President, that is not true. The bill has some good features, but events of the last several days have left some of us who supported it as a "good first step" feeling as if we've been played. While the bill as initially proposed didn't do nearly enough, it took some good first steps: it created a (watered down) Volcker rule, implemented a (weakened) Lincoln amendment to reign in derivatives, and allowed a (compromised) the Federal Reserve. Each of these provisions seem to open the door for further improvement. But dealmaking with Scott Brown and other Republicans (why not progressives Cantwell and Feingold, who also said they won't vote for it?) have watered most of these key provisions down to near-meaninglessness: While a fog of confusion remains, it now appears that key threats to our economic security Goldman Sachs and CItigroup will now have up to twelve years to comply with the modified Volcker rule - 12 years of danger for the rest of us. And, as Business Week reported (in a piece entitled "Banks Dodge a Bullet ...") Lincoln's mendment was reduced to a "fig leaf" as an analyst commented with understatement that it "won't have a colossal impact."
A note to the President and the Democrats: