Obama, Democrats Pass Historic Financial Reform
The Senate has sent to Obama the most sweeping financial reform since the Great Depression: “The Senate on Thursday voted 60-39 to approve the most sweeping overhaul of the nation’s financial regulatory system since the Great Depression, clearing the historic legislation for President Barack Obama to sign into law. Obama hailed the measure’s passage, calling it “a Wall Street reform bill that will bring greater economic security to families and businesses across the country. … All told, this reform puts in place the strongest consumer financial protections in history… Because of this reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes.”
A recent poll suggests that a majority of Americans are unfamiliar with the financial reform bill: “The poll found 38 percent of Americans had never heard of the overhaul and 33 percent had heard of it but knew almost nothing about the legislation, which tightens regulations on the financial industry in an effort to avoid a repeat of the 2007-2009 financial crisis. Another 18 percent said they knew ‘a little bit’ about the measure, which would lead to the broadest overhaul of financial rules since the Great Depression. The Ipsos poll found 3 percent were very familiar with the legislation, and 8 percent were somewhat familiar. Of those who knew about the overhaul, about one-third said they did not know enough to say what sort of impact it would have on the economy, spending, investments and financial stability.”
Republicans are already pledging to repeal the financial reform legislation: “GOP leaders can throw around silly ‘repeal’ rhetoric when it comes to health care reform, in large part because an aggressive and dishonest campaign had made the Affordable Care Act controversial. The Republican base is pleased with the boasts, and most of the political mainstream doesn’t take the promises seriously anyway. But talking about repealing Wall Street reform is much dumber, since the effort is far more popular. Boehner & Co. consistently forget this, but Americans still tend to be pretty annoyed with the financial industry that nearly destroyed the global economic system, and which was bailed out by taxpayers. The available evidence suggests voters want the new reform measures, if only to help keep the industry that ran wild in check. Arguing that new safeguards and accountability measures should be ‘repealed,’ before they even pass, makes it sound as if Republicans — if given a chance by voters — plan to go out of their way to look out for the Wall Street lobbyists and hedge fund managers that brought the system to the verge of collapse.”
Is it FinReg or Wall Street Reform? Matt Yglesias calls it an underrated FinReg bill: “That said, I think media elites have also fallen down on the job a bit here. We’ve tended to focus much more on what’s not in the bill than on what is in the bill. What is in the bill is a consumer protection setup that would be considered a major progressive win as a standalone item. What is in the bill is a ‘resolution authority’ that will let future regulators avoid the bailout-or-crisis dynamic that plagued us in 2008. What is in the bill are regulatory tools that even Simon Johnson likes. The bill clarifies lines of regulatory authority and responsibility and should cut down on abusive ‘competitive regulation.’ I don’t think the bill means we’ll never see an asset price bubble or a banking crisis again, but I also don’t think it’s possible to achieve that goal. It should, however, make crises less likely and make cleaning them up easier.”
Ezra Klein agrees, and adds a few more “wins” to Yglesias’ list: “I’d add a few more major wins. Bringing derivatives onto exchanges and into clearinghouses is a huge victory. In 2007, the over-the-counter — and almost entirely unregulated — derivatives market was worth about $700 trillion in notional value, and regulators had no idea what went where and few firms had serious capital or margin requirements. Those days are over. The bill will also force much more transparency from financial firms and provide regulators with reams and reams of information on the financial markets. It creates the Office of Financial Research to serve precisely that purpose. The presence of information won’t stop regulators who decide to explain away what the data is telling them, but if it helps regulators see and stop even one bubble, that’s a major victory, albeit not one that we’ll ever know about.”
Next On The Senate Agenda: Unemployment Benefits?
Help may be on the way for the nation’s jobless. The Senate will vote on restoring jobless benefits just as soon as Robert Byrd’s replacement is sworn in: “The Senate will swear in the interim replacement for the late Sen. Robert Byrd next Tuesday afternoon, Majority Leader Harry Reid announced today, and no sooner will that happen then the Senate will vote on restoring and extending unemployment benefits for the long-term jobless. Led by Reid, Democrats have tried on numerous occasions in recent weeks to get the bill passed, but Republicans have balked at its $34 billion price-tag. …Nearly every Republican has opposed the restoration and extension of the jobless benefits through November 30 on the grounds that it would add tens of billions of dollars to the nation’s soaring deficit. One Democrat — Sen. Ben Nelson of Nebraska — has opposed the measure, too. But with the new senator from West Virginia — whomever state Gov. Joe Manchin chooses – coming to the rescue, the long-term jobless are poised to get the help they’ve been waiting for since the benefits lapsed on June 2.”
As many as 35 million Americans may experience joblessness at some point this year: “Labor Department data show that in 2008 (the most recent year for which this info is available), 21.2 million people were out of work at one point or another, while the average monthly total number of unemployed was 8.9 million. So far this year the average monthly total has been closer to 15 million, which, by 2008′s monthly-average-to-yearly-total ratio, would amount to 35 million people getting a taste of the layoff life in 2010. Despite the huge number of people out of work, Congress has had more luck reforming a recalcitrant financial industry with today’s passage of a Wall Street reform package than reauthorizing extended unemployment benefits, which lapsed at the end of May. At that time, EPI notes that 10.2 million people were receiving unemployment benefits — and more than half of them were receiving the federally-funded benefits that lapsed.”
Gusher In The Gulf Capped
For the first time since April, BP stopped the flow of oil in the Gulf: “British energy giant BP stopped the oil flowing into the Gulf of Mexico on Thursday for the first time in three months as it began key tests hoping to stem the spill for good. Shortly after BP engineers shut down the last of three valves on a giant new cap placed on the blown-out well, Senior Vice President Kent Wells announced that no oil was leaking into the seas. ‘I’m very excited to see no oil flowing into the Gulf of Mexico,’ Wells told reporters, but cautioned it was only the start of a testing process set to last 48 hours to analyze the condition of the underground wellbore.”
BP is facing more than 300 lawsuits seeking compensation for damages: “BP Plc faces more than 300 lawsuits seeking billions of dollars in potential claims as damage from the worst oil spill in U.S. history ripples through the nation’s Gulf Coast economy. A regional shopping mall in southern Louisiana sued July 12 in New Orleans federal court over the loss of customers, a parish sheriff filed suit there July 9 to recover lost business tax revenue, and growing numbers of BP employees and investors lodged claims over alleged corporate mismanagement that caused BP’s share price to fall by half. The complaints surpassed 300 yesterday, according to court records compiled by Bloomberg. These lawsuits join scores of proposed class actions filed by commercial fishing companies, beach-front property owners, restaurant owners and environmentalists claiming harm from the drifting oil. Legal experts said the number of suits will continue to rise after the damaged well has stopped gushing oil.”
Progressive Victory In 2010?
Williams Rivers Pitt plucks up the courage of progressives, and points out the elephant in the middle of the mid-term elections: “I genuinely believe the House and Senate are safe for the Democrats, if only marginally so, but I’ve been wrong before, and if the loss of majority control does indeed come to pass, it will stand in my mind as one of the grander indictments against the American voter to come down the pike in a long, long while. Is it that easy to forget what it was like when these yahoos were running the show? It wasn’t so long ago, and it was so unbelievably bad that you’d think the memory would linger.I’m no Kool-Aid-drinking Democrat booster, but this couldn’t be more clear. If the American people allow the GOP back into power despite all the evidence of how dangerous and dumb they are, I’m going to have to think seriously about giving up on politics. If the beyond-terrible GOP option seems valid to a majority of people after everything we’ve been through, if voters who know better can’t find the motivation to pull the lever and keep the worst from happening, well, then Mencken was right: we get what we deserve.”
Mike Lux says progressives need a narrative that “keeps hope alive”: “We need to do better at keeping hope alive, as Jesse Jackson used to say. I know this may not seem like it is related very much to a discussion about how much we should be arguing about whether Obama is a progressive or not, but it seems to me that a lot of the Obama arguments are weighted with a sense of hopelessness and a level of cynicism that makes hope impossible. Now just to be clear before people start attacking me as being an apologist for Obama: I don’t believe Obama is a strong progressive, I have been disappointed in a great many things he has done, and I think his political strategy so far has mostly sucked. But I also believe what I was taught in my first organizing workshop (by Saul Alinsky’s Industrial Areas Foundation) 35 years ago: the only way you can organize people and win victories is if people have hope. Thinking that all is lost, that all Democrats suck, that Obama will each and every time screw us, that the forces of corporations and the right will win every single battle, or that none of the things we do win matter, is not conducive to winning anything important that matters in real people’s lives, or getting people to take action.”
Rep. Bob Ingliss (R-S.C.) says that his party is “getting what we deserve” with its field of candidates for 2010: “Rep. Bob Inglis (R-S.C.) offered a candid criticism of the House Republican leadership and other members of his party in a C-SPAN appearance on Thursday.nInglis — who was defeated in his bid for re-election in a primary runoff last month — took aim at House Minority Leader John Boehner and Minority Whip Eric Cantor. ”I think that to some extent, we’re getting what we deserve,” Inglis said of Republican efforts to appease the conservative wing of the GOP. ‘We have basically decided to stir up a base and that’s a bad decision for the country. Because the country needs people here serving in Washington to say, ‘listen let’s lead and let’s help people understand.’”
Rebecca Kaplan explains why Democrats need not fear the ghosts of 1994: “So speculation is running rampant, particularly in the media and especially among Republicans (and White House spokesman Robert Gibbs), that 2010 could be a replay of the Democrats’ lowest political moment in the last half-century: the 1994 midterms, when Republicans seized 52 seats in the House and eight in the Senate, taking control of Congress for the first time in 40 years. But the similarities between 2010 and 1994 are superficial. The more relevant election—the one that gives a better gauge of the magnitude of losses the Democrats may see—is the 1982 midterms. Although some political scientists were predicting that the Democrats would gain as many as 50 seats, on Election Day they took only 26 seats from the Republicans. What happened? And could their disappointment of 28 years ago offer reasons for Democrats to hope this year? After all, they’re in the same position now—stronger, actually, since they control both houses of Congress—as the Republicans were in 1982. A quick look at three of the most important factors in any midterm election show why 2010 may be for Democrats what 1982 was for Republicans: not great, certainly, but not nearly as bad as it could have been.”
Arizona & Immigration
The Arizona immigration law got its first major court hearing: “A federal judge is scheduled to hear arguments Thursday over whether Arizona’s new immigration crackdown should take effect later this month, marking the first major hearing in one of seven challenges to the strict law. U.S. District Judge Susan Bolton also will consider arguments over Gov. Jan Brewer’s request to dismiss the challenge filed by Phoenix police Officer David Salgado and the statewide nonprofit group Chicanos Por La Causa. The judge said last week she wasn’t making any promises on whether she will rule on the officer’s request to block enforcement of the law before it takes effect July 29. Hearings on the six other lawsuits, including one filed by the federal government, are set for next week.”
Louis Provenzano says that Obama did the right thing in filing lawsuit against the Arizona immigration law: “As the Democrats begin to worry about the potential impact on Fall elections of the Obama administration’s lawsuit against the Arizona immigration law, this is no time to back off. Decisive action and leadership from the top is a must in a country whose racial and ethnic makeup is evolving quicker than policymakers seem capable of thoughtfully and appropriately legislating. …Addressing illegal immigration may have consequences, and it should. It is a very real issue that needs to be confronted at the highest levels of government with broad, sweeping implementation for the sake of the nearly 200 languages and cultures, and more than 24 million of us speaking a language other than English. Laws like the Arizona one paint targets on the foreheads of millions of us. It sets a dangerous precedent for other states to do the same, muddying the waters from state to state in creating a whirlwind of confusion and danger for far too many law-abiding citizens.”
Alan Greenspan said in an interview that the Bush tax cuts he endorsed in 2001 should be allowed to expire:
Senate Democrats have come forward with plans to cut $14 million from the budget: “President Barack Obama’s allies in the Senate stepped forward with a plan Thursday to cut $14 billion from his budget for the upcoming fiscal year. That’s double the $7 billion cut sought by House Democrats. But Republicans on the Appropriations Committee said the cuts didn’t go far enough and opposed the idea — along with three appropriations bills for the budget year that begins in October. The panel approved the Democratic proposal on a party-line vote. The differences between the parties are tiny when compared to the $1.14 trillion overall pot available to lawmakers writing the Cabinet agency budgets passed each year by Congress. But Republicans had staked out a position earlier this week demanding an additional $6 billion cut — a difference between the parties of just one half of 1 percent.”
Clacy Sigal writes that America is hooked on war and getting poorer: “Why is nobody talking about the Afghanistan adventure as a cause of our plunging recession? Or at least citing the 30-year-old endless war as a major contributory factor in wasting our money to “nation-build” in the Hindu Kush while our own country falls to pieces on food stamps, foreclosures and child poverty – one in five kids – that would put the world’s poorest nations to shame? Iraq was George Bush’s war. But, as Republican party chairman Michael Steele correctly says, “Afghanistan is Obama’s war of choice”, and a losing proposition. Historically, Bush and Dick Cheney merely toyed with Afghanistan while visiting shock and awe on Iraq. But President Obama is really, really serious about it. He told us so on his campaign trail, but most of us refused to believe him. We told ourselves: oh, he’s a closet pacifist, or he’ll somehow find a way out of the impasse, thus sealing a devil’s pact with our own consciences.”
A (deadly) tree branch falls in Central Park, and Moshe Adler diagnoses the problem that lead to it — privatization: “The problems are the same now as they were then: Contracting out diminishes the level of know-how of the government on the one hand, and contractors save money by cutting corners on the other. The rationale for contracting out is always the same: cost cutting. The taxpayer will save money, it is argued, because the workers of private contractors get lower wages and fewer benefits than city employees get, and because the workers of these contractors have no protections against arbitrary dismissals. But there is no reason why a contractor who cuts his costs by paying low wages will stop there. When the client is the public, nobody really owns the store and supervision is inevitably lax. It is too easy for the contractor to cut costs by cutting corners under such conditions.
According to a Time poll, writes Amanda Terkel, Americans don’t really miss George W. Bush: “Last month, Sen. James Inhofe (R-OK) hit Obama for his handling of the BP oil disaster, saying, “Remember the criticism George Bush got during Katrina? They said it was a lack of leadership. Let me tell you, that leadership looks pretty good right now.” More recently, Jeff Shapiro — a man devoted to ‘correct the historical record about President Bush’ — wrote an op-ed claiming that ‘a lot has changed since’ last year, when he was being labeled a ‘failure.’ In reality, not much has changed; the American public still doesn’t really miss Bush. From a new Time poll:
– 71 percent blame the Bush for the ‘balky economy,’ while 27 percent blame Obama.
– 53 percent favor Obama over Bush (33 percent).
– 55 percent favor Obama over Sarah Palin (34 percent) in a hypothetical 2012 presidential campaign.”