Wall Street's Talking Points, Now Available in Memo Form (from WH blog)

[babylonsister]

They're loaded for bear!

Wall Street's Talking Points, Now Available in Memo Form
Posted by Jen Psaki on April 20, 2010 at 06:00 AM EDT


Once again, opponents of reform have teamed up with a friend of Wall Street in attempt to add economic credibility to their widely debunked effort to portray their opposition to Wall Street Reform as based on principled objections to fictional perpetual bailouts, and not on their long-held allegiance with Wall Street demonstrated most vividly by their “call to arms” with more than 100 Wall Street lobbyists a few months ago.

Larry Lindsey, a former Bush appointee and a former Enron consultant, put out a memo this weekend in conjunction with House Republicans that may sound familiar because it reads from the same Wall Street drafted talking points that we have heard for the last week. He even goes so far as to claim that the bill is being “rushed to the floor.” If more than a year of discussion, meetings and public debate about the best way for Wall Street reform to happen isn’t enough for Larry Lindsey, we may be waiting long enough for another crisis to hit before he is satisfied with the timeline. As Republican Senator Bob Corker said in lamenting the fact that his party had not supported bipartisan efforts to address Wall Street Reform, "this is an issue that almost every American wants to see passed."

For the meantime, so long as Republicans prefer to work with Wall Street to block reform rather than work with the President to pass it, we will need to continue to correct the record. So let’s take a quick look through their memo to debunk it piece by piece:

FICTION:

Lindsey Memo: “To date, public attention has focused on whether the bill is a “bailout” bill that will keep “too big to fail” alive. You be the judge. First, the bill contains a $50 billion fund for resolution of systemically risky institutions. “

FACT:
Nobody made that argument until Wall Street lobbyists decided that it was the best way to kill financial reform. The most important principle is that large financial firms – not the taxpayers – bear any costs associated with the failure of another large financial firm. Chairman Dodd’s bill meets that test. If a big financial firm fails, it is put into receivership, its shareholders are wiped out, its creditors are allowed to suffer losses, its management is fired. Taxpayers are completely protected.

FICTION:

Lindsey Memo: “The bill allows a 2/3 vote of the Financial Stability Oversight Council to deem any firm (financial or non-financial) as coming under its rubric and then authorizes the FDIC and Treasury Secretary to treat each of the firm’s shareholders and creditors as they choose, without regard to bankruptcy law.”

FACT:
Wrong on all the facts. First, only large financial firms whose failure could pose a serious threat to the U.S. economy would be subject to the bill’s enhanced bankruptcy-like process. Second, similar to a standard bankruptcy, creditors' rights will be respected in accordance with their statutory priorities. But make no mistake, under the bill, failed financial firms will be sold off, broken apart, or otherwise liquidated; culpable management will be fired, creditors will be allowed to suffer losses, and shareholders will be wiped out. This is no bailout.

more...

http://www.whitehouse.gov/blog/2010/04/17/wall-streets-talking-points-now-available-memo-form