Why Wall Street Reform is Stuck in Reverse

[joeycola]

and the President begging at the dinner was NOT good.

Robert Reich

Former Secretary of Labor, Professor at Berkeley
Posted: October 22, 2009 12:39 PM

Why Wall Street Reform is Stuck in Reverse


Read more at: http://www.huffingtonpost.com/robert-reich/why-wall-street-reform-is_b_330105.html

http://www.huffingtonpost.com/robert-reich/why-wall-street-reform-is_b_330105.html
Posted: October 22, 2009 12:39 PM


At a conference in London, a Goldman Sachs international adviser, Brian Griffiths, praised inequality. As his company was putting aside $16.7 billion for compensation and benefits in the first nine months of 2009, up 46 percent from a year earlier, Griffiths told us not to worry. "We have to tolerate the inequality as a way to achieve greater prosperity and opportunity for all," he said.

Eight months ago it looked as if Wall Street was in store for strong financial regulation -- oversight of derivative trading, pay linked to long-term performance, much higher capital requirements, an end to conflicts of interest (i.e. credit rating agencies being paid by the very companies whose securities they're rating), and even resurrection of the Glass-Steagall Act separating commercial from investment banking.
..............
What happened in the intervening months? Two things. First, America's attention wandered. We're now focusing on health care, Letterman's frolics, and little boys who hide in attics rather than balloons. And, hey, the Dow is up again. The politicians who put off Wall Street regulation for ten months knew that the public would probably lose interest by now.

Second, the banks keep paying off Congress. The big guns on Wall Street increased their political donations last month after increasing their lobbying muscle. Morgan Stanley's Political Action Committee donated $110,000 in September, for example, of which Democrats got $43,000.

Official Wall Street PAC donations are piddling compared to the tens of millions of dollars that Wall Street executives dole out to candidates on their own (or with a gentle nudge from their firms). Remember -- the Street is where the money is. Executives and traders on the Street have become the single biggest sources of money for Democrats as well as Republicans. And with mid-term elections looming next year, you can bet every member of Congress has a glint in his or her eye directed at the Street.

That's why the President went to Wall Street to raise money Tuesday night, gleaning about $2 million for the effort. He politely asked the crowd to cooperate with reform -- "If there are members of the financial industry in the audience today, I would ask that you join us in passing necessary reforms" -- but those were hardly fighting words. It's hard to fight people you're trying to squeeze money out of.....................


Read more at: http://www.huffingtonpost.com/robert-reich/why-wall-street-reform-is_b_330105.html

[ProSense]

1. "Second, the banks keep paying off Congress." Reality:

Big financial firms losing power on Capitol Hill

Obama to order salary pay cuts for AIG

House panel approves consumer protection agency