Fun Facts About Financial Reform

With the financial reform bill wending its way to a Senate vote, I decided to actually read the thing. Needless to say, it is - like most legislation - a difficult read. However, there are some little nuggets in there that have yet to be mentioned in the partisan spitball fight.

Top of my list is the Bureau of Consumer Financial Protection. This would be created as part of the Federal Reserve. Excuse me? The Fed? The ubersecretive Fed? The same one that sees transparency and secrecy as synonymous? That Fed? They would be given the responsibility to protect consumers?

Am I the only one that sees the literal idiocy of handing this task to a semi-independent organization that is currently hiding bank information to protect the banks from their own customers? I am not making that one up. Bernanke made it clear that he was hiding the names of which bank borrowed how much from the Fed to "protect the banks' images." Apparently he thinks telling the customers the truth about the financial stability of a bank might cause them to move their accounts to a more stable bank. Well, duh.

Yet Dodd, Shelby and company want to hand this group the responsibility to protect consumers from the banks. Are they kidding? Bernanke and Geithner (as New York Fed president) may have set an all time record for closed door Sunday deals to protect the banks and shield them. This is the same group that made Goldman and GMAC commercial banks overnight with zero investigation and verification. And they are expected to protect us? The Federal Reserve wouldn't know a consumer if they ran one over. They have never dealt with consumer issues and have, in fact, avoided them.

But, for some unknowable reason, Dodd, Shelby and the the rest of the corrupt Democrat/Republican lie machine want to hand more power to the Fed. And that is in the face of Bernanke's ongoing opposition to any kind of transparency at the Fed. This alone is enough to scuttle the bill if any member of the Senate was honest of genuinely interested in anything except the next election.

Obama has endorsed this idiocy. Geithner, Schapiro and the rest of his pre-failed financial team all love the idea. Why? Why do they want to hand consumer protection to the one agency that specifically does not deal with consumers? We can all speculate as tot he reasons. I firmly beleive it is to make sure that nothing changes.

Once I got past that in my reading, I found a very interesting little piece. One that stopped me in my tracks.

This bill would repeal the Gramm-Leach-Bliley Act prohibition against the regulation of security-based swaps. For those who don't know, Gramm-Leach was the 1999 Clinton endorsed act that lifted the Glass-Steagal 1932 prohibition on commercial banks engaging in investment bank activities. The idea in 1932 was to prevent banks from gambling with depositors' money.

Since the meltdown of 2008, it has become apparent that securities swaps were a large part of the problem. Lots of feckless politicians are demanding prosecution for this. Except for one problem. Lots of those same politicians passed a law prohibiting any regulation.

In an earlier post, I posited that Goldman most likely did not violate and criminal statutes. As it turns out, there weren't any to violate. See, the kids at Goldman, Lehman, Bear and the rest knew that swaps were unregulated. They knew that the law prohibited regulation and by extension, government intervention. They knew this because they had a hand in making it so.

Democrats and Republicans acting indecently in a bipartisan way. It was Bill Clinton's Treasury whiz kid Bob "I got me a corner office waiting on Wall Street" Rubin that pushed Gramm-Leach along with Republican Gramm. Once that law was signed it was off to the races in a totally legal way. Put bluntly, they could not break a law that did not and could not exist. Even if the lazy pencil pushers at SEC and the Fed wanted to get involved, they could not.

One cannot help but wonder why this has not been more of a topic the last couple of years. After countless hearings, the protestations of 2 presidents (Bush and Obama), the nonsense from Paulson, Geithner and Bernanke, not one of them mentioned this little fact. None wanted to admit that they set the table for what happened. Not one time was this mentioned. Not even by the kids from Wall Street trying to defend their activities.

I am not sure what will happen with the financial reform bill. But I do know one thing. None of them are telling us the truth here. Not Obama and his economic team of super-failures. Not Dodd or Shelby. Not Barney Frank.

And that is a automatic firing offense. Come November, I suggest we fire the lot of them. All of them. The entire House and those Senators up for re-election. By failing to mention their own contribution to the mess, they have failed us all and - in my opinion - are more responsible for the meltdown than Goldman and the rest.

As much as it pains me to say this again, I do not think the Wall Street gang broke the law. Stretched, pushed and loopholed, yes. But violated, no. And Congress knew this. Obama and Bush knew this. The economic advisors both administration used (and they are actually the same failures) knew this.

As they say in baseball, toss the bums out.

Meanwhile, at the Banks

While everyone was watching the artificially hurried and rigged vote on Health Care, the issue of financial regulation slid under the radar. The importance of this cannot be minimized of exaggerated. When this president took office, we were in one of the worst recessions in history. We pretty much still are. A recession triggered, in large part, by misbehaving banks, disingenuous investment firms and lazy, incompetent (and possibly corrupt) regulators.

Once the cause of Health Care took center stage, that freed up the Senator from banking land - the ever untrustworthy Chris Dodd - to quietly push his bogus financial reform package. And it freed up his Republican counterpart - the earmark loving Shelby - as well.

The financial press took their eye off this as well in their haste to cover Health Care. This freed up everyone to have some fun at our expense. Blankfein, Dimon, Pandit and the rest took the opportunity to manipulate the process to ensure that any new regulation would actually be the same as the old ones.

Let me be very clear on one point. With a few exceptions (Ken Lewis comes to mind) most of the banks and investment firms acted barely within the law in their endless gaming of the system to make sure that they profited from our losses. And today brings more proof that the Congress in their haste to send a trillion of our dollars to Wall Street did so with no regard for the taxpayer.

Today we read that Dimon's firm - JP Morgan - having been gifted Washington Mutual and Bear Stearns by the troika of Geithner, Paulson and Bernanke can now get a massive tax refund thanks to some little known and rarely mentioned provisions in Obama's so-called stimulus package. The package that was supposed to get our economy up off the mat. The other trillion taxpayer dollars flung down the corrupt rabbit hole maintained by the Pelosi-Boehner gang.

It seems that a minor little tiny piece of that legislation allowed the banks to move their losses around to cover profitable years, thus reducing their tax burden. Something that nobody commented on at the time. Something that the deficit hawk Republicans failed to point out as a cost of the legislation. Something that the tax-happy Democrats failed to mention. Nothing from CBO either.

To be fair, the law was written by Congress and the real pirates of this time - Dimon and friends - followed it. One can only assume that they paid their pet Congress Critters to write it in there, but it passed and was signed without a single mention in the press. No objection from the White House. Not a peep from Barney Frank or the ever untrustworthy Dodd. Not even a flinch from the false queen Nancy the last.

In fact, I think I can easily say that the only time those clowns are bipartisan is when they are acting in secret to help their lords and masters on Wall Street.

You can be sure that Dodd's proposed new regulatory scheme will be the next fast track piece of nonsense coming off Capitol Hill. And this one will be high grade nonsense.

The minute the Lehman report came out, all such legislation should have been stopped. Frozen. Put on hold. After all, it only makes sense. Here we have proof of how the system was being gamed. It would make sense outside Washington to investigate those abuses and see who else is playing the game. Take a serious look at what is really needed.

The first course should have been to call Geithner down to the hill for a public hearing on just what he was doing while he was failing in his job as New York Fed CEO and principal regulator of the Wall Street banks. Then Bernanke to demand he reveal just how much money he handed out and to whom while he was failing in his job as Fed Chairman. Then Paulson to ask the same questions.

None of this happened. In fact, both parties in Congress have done everything they can to ignore it. Rather than actually find the facts and act on them, Congress persists in acting to please pollsters and pundits while actually satisfying the special interests that fund them.

This is sure to become the next partisan football kicked around. Democrats will clamor for more regulation and new agencies while Republicans will cry about too much regulation and too much government. And this once, both will be right and both will be wrong.

We already have reams of regulation but no regulators willing to enforce them. Witness the always untrustworthy Mary Schapiro, now head of the SEC. She had the raw nerve to complain that regulators did not do their jobs. Yet, she was one of them as FINRA head. Her agency ignored things like Madoff and allowed the endless trading of credit default swaps and exotic derivatives.

Yet, there she is, now head of the SEC. Somehow, this administration took her failure, Geithner's failure and Bernanke's failure and accepted them. Even promoted them. And this sham of a Senate confirmed them into their jobs. That should tell all of us what the Senate cares about. Nothing. Except themselves.

There are no less than 7 agencies currently charged with enforcing tens of thousands of regulations. Most likely a hundred thousand federal employees or more. Add in the states and their laws. We have plenty of law, regulation and enforcers at all levels. Just none of them are any good.

Now ask, do we need more law or clearer law? Do we need more enforcers or active, effective enforcers? Does the Fed really work anymore? Who supervises them? Who are these bond rating firms? Are they ever reviewed? By who? And a lot more really obvious questions like that. The ones neither Democrats or Republicans ever seem to ask. I don't care how much profit Wall Street makes. I care that they do so within the rules.

I challenge this president to appoint a non-political commission to openly investigate the banks. None of the circle currently dining at the White House. No power brokers or lobbyists. No cronies or hacks.

I say we give it over to Elizabeth Warren and Eric Bolling. They understand how Wall Street works and how the laws work. Take it away from the partisan grindhouse and have an actual open, transparent investigation. Force the Fed to keep Bernanke's false promise of transparency. Force Geithner to keep Obama' promise of the same.

One thing I am confident of with both Dr. Elizabeth Warren and Eric Bolling is that they will keep the best interests of the people in mind. These are 2 ethical, honest Americans, who care because they love this nation. Neither of them aspires to power. And both know a lie when they hear one.

When their Commission issues its report, then Congress can look at regulation. If any of them are not being investigated themselves.

Down our throats.....

I find it highly amusing that Senate Minority Leader McConnell has the sheer audacity to complain about legislation being jammed down our throats. Of course, he is talking about health insurance reform. This is the same Mitch McConnell that ignored not only his party, but also "the American People," as he likes to say so often, in ramming TARP and AIG down our throats. Apparently, McConnell only jams things down our throats that benefits banks and Wall Street. The same McConnell that thought nothing of tossing a trillion dollars to the crooks that put us in this recession.

Hold the applause Democrats. Your leaders are no better. Harry Reid, the Majority leader that helped shove TARP down our throats is unwilling to use his authority to help regular people. And the illustrious Chris Dodd who actually circumvented the US Constitution in passing TARP (more on that next paragraph) is now instrumental in making sure that the same banks and Wall Street cheaters that put us here are not reined in.

In order to jam TARP down our throats, Dodd used a tiny little trick to get around Article 1 of the Constitution that requires tax and spending bills to originate in the House of Representatives. Back when TARP was pending, the House - in a rare moment of responsibility - rejected it. Twice. Not good enough for Dodd, McConnell, Reid and company. They picked up an old House bill that had died in the Senate, stripped out everything except the "HR" designation that made it a House bill and then amended the entire TARP package to it. The same TARP that the House had just rejected. It this legal? Sure. Is it Constitutional? Barely.

But is is wrong and against the will of the same people that McConnell and Reid purport to represent. Yet there they were, leading the charge to ignore the will of the people. And here they come again, skewering any level of financial regulation or reform, despite the will of the people.

Apparently the needs of Goldman Sachs is important enough to jam down our throats, but getting access to health care for the poorest among us is not. Ask yourself this next time you write a check to an insurance company or to pay for an overpriced prescription that your insurance has chosen not to cover: "Did TARP really help me?" Unless you work on Wall Street, the answer is going to be no. Then ask yourself: "I wonder how much McConnell, Dodd, Reid and the rest of those liars pay for their health care?" The answer will be "very little if anything."

So the same gang of Senators that decided to take over a trillion dollars from you and me for their pals on Wall Street have also decided that health care is too expensive and that any kind of financial reform would be bad for the banks.

In other words, to quote a long famous phrase - follow the money. We the people that seem so important to these charlatans on Capitol Hill apparently cannot afford the entry fee to the club that actually get taken care of.

For the record, both Obama and McCain endorsed Reid, McConnell and Dodd's shady actions by voting yes on TARP. Both disregarded the rules and the people and the Constitution. Sadly, the only time we see bipartisan action in the Senate is when it is time to reward the big contributors and ignore the people.

One important difference between us and Wall Street - we can fire the Senate come November. Even the mighty Goldman Sachs can't do that.