Yesterday, the House of Non-Representatives passed the Financial Reform bill and sent it along to the Senate. The good news is that the Senate will not violate their vacation and laziness schedule to vote on this before the holiday weekend. And they should not vote on it at all. In fact, it should be "laid upon the table," to use Congress-speak.
This bill is too far out in front of the investigation of exactly what happened to cause the financial meltdown, or whatever we are calling it today. In fact, the actual investigation is just getting started. So the idea of new regulations and agencies is insane without any knowledge of what happened and, more importantly, what didn't happen.
Because what we already know did not happen was any kind of meaningful enforcement of existing regulation and law. We already know that Wall Street knew this. What we don't know is whether regulation already exists to deal with some of this. What we don't know is what existing agencies already had the authority and were too lazy or corrupt or both to use it.
As an example, I just heard Goldman Executives tell the investigating commission that they do not keep separate track of derivatives as compared to cash. Now I am not an expert on financial regulation, but it would seem to me that a publicly traded company would have to keep some kind of track of cash versus derivatives. It would also seem logical that they would want to internally track this stuff.
But there they sit, telling this commission that they don't know. For the last 6 months they have refused to provide answers to these questions. And therein lies the problem with the financial regulation bill.
The Congress has no idea what is needed. They can't, since the investigation is incomplete. For all those fools know, the bill is not needed. The new agencies are not needed and the new regulations are not needed. In fact, it is entirely possible that all that is needed is a kick in the pants of existing regulators.
And that is a problem that will haunt us regardless of this bill or any other new law. The same folks that brought you the meltdown/crisis/whatever are the same folks bringing you the solution in the form of this bill. And it is a bipartisan band of hacks and politicians. Since the existing regulations and laws were not enforced, why would these new ones be any better?
Well, look at who is pushing this farce.
Obama's economic team. Looks almost exactly like Bush's. The Senate approved all of those appointees even though they had obviously failed in their jobs. Why would they do that? To keep any real enforcement from happening. To avoid the existing laws. To prevent their friends from facing the consequences of their actions.
At the top we have little Timmy Geithner. The former New York Fed president and now Treasury Secretary who boldly ignored the excesses at the banks he was supposed to regulate and then led the charge to use tax dollars via AIG to cover them. He was a leading hand in the demise of Lehman, the gifting of Bear and the rest of the bad Sunday deals.
Next is Bernanke. The Fed Chairman. Recently reappointed. A man who is so totally out of touch with the actual world that he considers total secrecy to be transparency. The ultimate bank regulator that thinks his job is to protect the banks from us - the customers. He was the one that came up with the Maiden Lane vehicles that allowed the Fed to buy all of those toxic assets (mostly at an inflated par value) from the banks he failed to regulate.
For those that remember, this was what Helpless Hank Paulson's TARP was supposed to do. That is how the great and powerful Hank proposed it to Congress in 2008. Troubled Asset Relief Program. But once he had the money, he got together with his pals Geithner and Bernanke and simply handed it out. No strings, no questions. In fact, that trio chartered banks on Sundays just to be able to give them our billions.
And not one of them ever asked how it happened. Nor did the leadership on either side of the aisle in Congress. While the Republicans were griping about bailouts and such, they were also fastidiously avoiding any real investigation into what happened. The Democrats were even more anxious to avoid an investigation.
In Congress we had Frank and Dodd and Shelby and Cantor. Pelosi, Boehner, Reiid and McConnell. All proclaiming to have an answer and a way forward. But all actually doing everything they could to ignore their failures and their own culpability. Every one of them busy raking in the campaign dollars at the back door while shoving out tax dollars out the front door. All very interested in hiding the mess and covering up the failure.
Why? Because both sides had a hand in this mess. Because both parties ignored it so they could keep sucking in the campaign cash. Because, at the end of the day, both parties are wildly corrupt and wildly out of touch. They talk about "Main Street" but wouldn't know Main Street if they passed out drunk on it. The preferred tactic was to blame each other while avoiding any enforcement or investigation.
See, Congress is way more concerned about Citi and Goldman then about you or me. They barely know we exist. After all, we don't have lobbyist armies and millions to hand out. We can't buy them fancy dinners and cool gifts. We are only the voters who they like to try to fool every so often.
Those laws do exist. Goldman already faces civil prosecution under the existing law. Most of the chicanery was illegal then and still is without this new financial reform bill. The bill before the Senate is simply not needed. What is needed is a thorough investigation of not only Wall Street, but Washington. Both the regulated and the regulators.
Much like the oil spill, the agencies charged with preventing this stuff simply failed. They got too cozy with the companies they were supposed to be regulating. They ignored obvious violations. And the Congress ignored that to pass a series of bailouts and giveaways designed to cover up this monumental failure of government.
So table this stupid bill. Wait for the results of the commissions and investigators. Don't create new agencies that may not be needed. Enforce the existing laws. Push the lazy bureaucracy to actually do something.
To the president, fire those losers you stupidly rehired. They have already failed at least twice each. Try new people. People not part of the gamed system. At least try honest people.
And, most of all, to the Congress, please, please just stay on vacation. Permanently. You are not helping and you are not solving. And come November, we will do what we can to make those vacations lifelong.
Fool us once, shame on you. Fool us over and over, well......
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