The finance reform bill painfully working its way through the Senate will have as much of an effect on the financial community as spraying perfume on cockroaches. To the observer, it looks as if stern steps are being taken against the roaches as the spray is pumped into the cracks and crevasses where they hide. The roaches love it.
But now, it appears that the Obama administration is trying to jeopardize the bill by adding some toxins to the perfume, and Senator Christopher Dodd, chairman of the Senate Banking Committee, is upset.
According to Wednesday’s New York Times, the White House wants the bill to cap the future size of financial institutions so a bank going belly up won’t threaten to take the economy down with it.
Former fed chief Paul Volker summed it up nicely when he said, “The mandate is to arrange an orderly liquidation or merger—in other words, euthanasia, not a rescue.”
Dodd’s reaction to the administrations gambit speaks volumes about why the United States is saddled with an impotent Congress. “It’s adding to the problems of trying to get a bill done.” He charged that, “The Obama administration ran the risk of derailing months of delicate negotiations over overhauling financial regulations.”
Let me see if I have this straight. The FIRE (finance, insurance and real estate) industry committed financial assault on the American public. Because of this assault, home values have plummeted, retirement and savings accounts have been hollowed out, and credit has dried up forcing many small businesses to shut their doors, and Congress is negotiating with the criminals over how they are going to be regulated?
There’s not a felon in the country that wouldn’t jump at an opportunity like that. Instead of jail time we’d have “months of delicate negotiations” over the sentence with the accused making a sizable contribution to the judge’s reelection campaign coffers.
Of course, this coddling of criminals in nothing new to the Beltway. Obama has informed us that he will not investigate possible war crimes committed by the Cheney administrations because it’s time to forget the past and look to the future.
This, also, is a concept the criminals of America would embrace. “Hell, your honor, I did it. But let’s not become mired in the past. It’s time to look forward.”
But I forget—bankers are rich; criminals are poor. Therein lies the difference.