Each morning, Bill Scher and Terrance Heath serve up what progressives need to affect change on the kitchen-table issues families face: jobs, health care, green energy, financial reform, affordable education and retirement security.
Goldman Fraud Case Puts Spotlight on Derivatives Reform
President Obama to take case for Wall Street reform to the people. NYT: “In a sign of the Democrats’ increasing confidence that they have the better of the argument in an election year defined by voter anger at big banks and bailouts, White House officials said Sunday that President Obama would take his campaign for a regulatory overhaul on the road in coming weeks.”
WH shows flexibility on Dodd bill’s liquidation fund, but GOP leaders still offer blanket opposition. TPMDC’s Brian Beutler: “…they swatted President Obama’s hand away in a fashion that was all too reminiscent of their strategy of opposition to health care reform.”
Politico reports big banks more worried about derivatives reform than a consumer protection agency: “…mammoth financial institutions like Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America and Morgan Stanley are worried about one provision that would force more open dealings in the $450-trillion over-the-counter derivatives market, an unregulated playground largely dominated by the quintet.”
NYT’s Paul Krugman argues Wall Street reform needs derivatives language that would prevent Goldman Sachs’ looting: “…in particular, it should block the creation of ‘synthetic C.D.O.’s,’ cocktails of credit default swaps that let investors take big bets on assets without actually owning them.”
Baseline Scenario’s Simon Johnson says we need a law to ensure CDO-architect John Paulson can never work on Wall Street again: “…if the entire scheme was Mr. Paulson’s idea … then we are looking at potential conspiracy to commit fraud … Mr. Paulson should be banned from securities markets for life. If that is not possible under current rules and regulations, those should be changed so they can apply. If that change requires an Act of Congress, so be it.”
Will Goldman have to pay taxpayers back for AIG bailout? NYT: “Representatives Elijah E. Cummings, Democrat of Maryland, and Peter DeFazio, Democrat of Oregon, are asking the S.E.C. to investigate all the Abacus deals issued by Goldman, and especially those insured by A.I.G. … If [fraudulent] conduct is found, the congressmen are urging the S.E.C. to recoup payments made by A.I.G. to Goldman.”
Who might the SEC prosecute next? Naked Capitalism: “…some major CDO players have not yet received much critical scrutiny for their role in working with CDO sponsors who appear likely to have designed the deals to fail, namely Calyon, Mizuho, Citigroup, Lehman, and Wachovia … it is far too early to tell whether [the SEC has] the Administration support and the bloodymindedness to do so.”
Will Earth Day Crush The Tea Party?
“Largest climate rally ever” in DC this Sunday for Earth Day. Climate Progress: “…the Tea Partiers have gotten an absurd amount of media attention for relatively tiny rallies. Back in September, they claimed they had a million attendees at a DC rally that in fact had perhaps 60,000 to 70,000 … This Sunday, let’s leave those numbers in the dust.”
Sen. John Kerry previews Kerry-Graham-Lieberman bill to Politico: “The measure will put a price on carbon emissions but not through a cap-and-trade system … a host of refunds to taxpayers to prevent spikes on energy costs … ‘huge assistance’ for coal and other industries that the authors hope will help frame the measure as a jobs bill that could boost and sustain an economic recovery.”
The Climate Desk’s Clive Thompson on how businesses, worried about bottom lines, are not doubting climate change: “Spend a couple of hours wandering through the websites of various industrial associations—aluminum manufacturers, real-estate agents, wineries, agribusinesses, take your pick—and you’ll find straightforward statements about the grim reality of climate change that wouldn’t seem out of place coming from Greenpeace.”
West Virginia Dems caught between party’s climate goals and homestate coal interests. W. Post: “…[Rep. Nick] Rahall has been blasted over the [Waxman-Markey carbon cap] bill despite having voted against it. ‘People around here said he voted against it after [House Speaker Nancy] Pelosi said he could vote against it,’ said Ron Stollings (D), a West Virginia state senator. [Sen. Jay] Rockefeller has vocally opposed a climate bill. Last month, he said that ‘nothing on the table has my support.’”
Labor Cutting Loose Wayward Anti-Healthcare Dems
W. Post on SEIU’s third-party effort in N.C.: “The nascent third party, North Carolina First, could endanger the Democratic congressional majority by siphoning votes from incumbent Democrats in November’s midterm election, potentially enabling Republican challengers to pick up the seats. Organizers say they are so fed up with Democrats who did not support health-care reform that they simply do not care.”
Politico’s Ben Smith sees other signs of labor leaders turning on anti-healthcare Dems: “An SEIU official will primary Stephen Lynch in Boston. And there’s some suggestion that Mike Arcuri might not run for reelection.”
CQ on the spring jobs agenda in Congress: “The [small biz] package will emphasize more generous loans for small businesses and a number of tax incentives … Sen. Debbie Stabenow of Michigan … predicted that the measure would include elimination of the capital gains tax for small businesses … Senate Democrats are looking for ways to jump-start a House-passed bill that would extend bond programs used by state and local governments for infrastructure development … The Senate will also be framing a version of energy-related tax breaks and a proposal known as ‘cash for caulkers’…”
New Pew poll supposedly showing opposition to active government actually finds “61 percent … want greater government regulation of the financial industry” notes McClatchy.
NYT’s John Harwood suggests value-added tax under consideration by WH to assist deficit reduction: “One way to reach that 3 percent [deficit relative to GDP ] goal, by the calculations of Mr. Obama’s economic team: a 5 percent value-added tax, which would generate enough revenue to simultaneously permit the reduction in corporate tax rates Republicans favor.”