Financial Reform Bill

On Friday, December 11, the House passed the Wall Street Reform and Consumer Protection Act (HR 4173), a bill to overhaul and reform financial regulations.

A short summary of the bill's provisions can be read at the Reuters Factbox.

From Speaker.gov:

For eight years, President Bush and his Republican allies ignored growing risks in the financial markets as Wall Street and big banks exploited loopholes and harmed America’s families and small businesses. Their failure to regulate financial markets and control these risks left Wall Street and the big banks to gamble with our money, which compromised our future, our savings, and the American Dream. We know what happened: the worst financial crisis since the Great Depression. Wall Street reform is the next critical step to create jobs and grow the economy. As we rebuild our economy, we must put in place common-sense rules to ensure big banks and Wall Street can't jeopardize our recovery and hurt hard-working families and small businesses once again. Wall Street may be bouncing back, but we know from experience that left to their own devices they’re not going to police themselves.

On December 11th, the House passed the Wall Street Reform and Consumer Protection Act (HR 4173) by a vote of 223-202. This comprehensive financial regulation reform bill will enact common-sense reforms including ending bailouts by helping ensure taxpayers are never again on the hook for Wall Street’s risky behavior and bad bets; protecting families’ retirement funds, college savings, and homes and businesses’ financial futures from unnecessary risk by Wall Street lenders and speculators and high-paid corporate executives; protecting consumers from predatory lending abuses, fine print, and industry gimmicks; and finally bringing transparency and accountability to a financial system that has run amok.

More information:

Bill Summary

Bill Highlights

Full bill text

Summary of Title I - Financial Stability Improvement Act

Summary of Title II—Corporate and Financial Institution Compensation Fairness Act

Summary of Title III—Over-the-Counter Derivatives Markets Act

Summary of Title IV—Consumer Financial Protection Agency Act

Summary of Title V—Capital Markets

Summary of Title VI—Federal Insurance Office

Myths vs. Facts

Bail Out Deregulation Trainwreck Expressed

Americans Blame Financial Crisis On ‘Lack Of Regulation,’ While McCain Says People ‘Don’t Want Regulation’:

In an interview on Tuesday with WCAU in Philadelphia, Sen. John McCain (R-AZ) backed away from his Sept. 16 claim that he believes in “excess government regulation,” saying that Americans actually want deregulation:

WELKER: It sounds like you’re calling for more regulation. Yet throughout your career you’ve advocated deregulation. Do you now see that as a failed economic policy — deregulation?

MCCAIN: Oh no. People don’t want regulation. They want to live as freely as they can. It’s smart regulation. Look, I’ve called for fixing Fannie and Freddie a long time ago.

A new LA Times/Bloomberg poll doesn’t bear McCain’s claims out, however. It finds that Americans are actually blaming the financial crisis on a lack of government regulation...

McCain’s Embrace Of Wall Street Regulation Exposes Health Care Hypocrisy


McCain Banks On Deregulation:

In the latest edition of American Academy of Actuaries, Sen. John McCain (R-AZ) makes his case for “deregulating the health insurance industry by extolling the benefits of the last decade of deregulation in the banking sector:

[Individuals] need to be in charge of their health care dollars… I would also allow individuals to choose to purchase health insurance across state lines…Opening up the health insurance market to more vigorous nationwide competition, as we have done over the last decade in banking, would provide more choices of innovative products less burdened by the worst excesses of state-based regulation.

In fact, deregulation of the banking industry “offers a cautionary tale about a little-understood provision at the center of John McCain’s health care plan.”

Following a pair of Supreme Court decisions which deregulated the banking industry, credit card companies relocated to states with no interest rate caps and charged “what they wanted” to borrowers in states with interest rate limits. This deregulated environment allows credit card companies to “use pricing practices, like teaser rates, to attract cash-strapped families and then… double or triple those rates without notice.”

SEC Chairman Christopher Cox Finally Realizes The Problem With Deregulation:

Yesterday, the Senate Banking Committee held a hearing on the Bush administration’s proposed $700 billion bailout plan. During the hearing, Christopher Cox, Chairman of the Securities and Exchange Commission (SEC), testified that deregulation was a cause of the current financial crisis, including a “regulatory hole” in the credit swap market:

There is another similar regulatory hole that must be immediately addressed to avoid similar consequences. The $58 trillion national market in credit default swaps — double the amount outstanding in 2006 — is regulated by no one. Neither the SEC nor any regulator has authority over the CDS market, even to require minimal disclosure to the market.

It’s rather ironic that Cox is now calling for regulation of the credit swap market. After all, trading in the credit swap market was what sunk insurance giant AIG. Once AIG had “sold large quantities of credit-default swaps to financial institutions around the world,” it required an $85 billion federal bailout to keep its failure from affecting the wider financial system.

But its not just on credit swaps that Cox has come around. He also blamed the the Gramm-Leach-Bliley Act - which was constructed by former Sen. Phil Gramm (R-TX) in 1999 and deregulated the banking industry - for contributing to the financial meltdown. He said that “the failure of the Gramm-Leach-Bliley Act to give regulatory authority over investment bank holding companies to any agency of government was, based on the experience of the last several months, a costly mistake.”

Just six months ago the Bush administration found the credit crisis so manageable that it “unveiled a widely discussed blueprint for U.S. financial regulatory reform that called for less supervision of Wall Street by the Securities and Exchange Commission.”

FLASHBACK: Six Months Ago, Paulson Said ‘Our Banks And Investment Banks Are Strong’


h/t: This Modern World
Atrios:

McCain is suspending campaign (whatever that means) and going to Washington so he can have pictures taken of him looking like he's doing something. Asks that Obama do the same, and wants Friday's debate to be postponed, because he can't possibly do 2 things at once.

Reaction to McCain's political stunt:

So apparently, McCain no longer thinks the fundamentals of our economy are strong. So now he's "suspending his campaign". What are people saying about this desperation stunt?

Reid Tells McCain to Stay Away:

Senate Majority Leader Harry Reid thinks John McCain should keep campaigning and show up for the scheduled debate Friday instead of offering his financial expertise - honed in the Keating 5 scandal - to the Senate he has so assiduously avoided the past six months:

...I understand that the candidates are putting together a joint statement at Senator Obama’s suggestion. But it would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process or distract important talks about the future of our nation’s economy. If that changes, we will call upon them. We need leadership; not a campaign photo op.

If there were ever a time for both candidates to hold a debate before the American people about this serious challenge, it is now.

McCain Comments On Involvement In Keating Five: ‘It Was A Very Unhappy Period In My Life’


Welcome Back, John McCain!

The prodigal son returns. John McCain has announced that America is finally confronting a crisis that he doesn't feel he can be absent for.

Some fun facts about John McCain: Of all Senators, John McCain has been the most absent. There have been 643 votes taken in the current Senate session: McCain has missed 412 of them.

McCain has not voted in the Senate since April 8th. Since March, he has missed 109 of the last 110 votes.

He missed votes on the GI Bill, energy policy, and in 2007 he missed "all 15 critical environmental votes in the Senate" -- giving him a 2007 rating of 0% from the League of Conservation Voters.

A Bush In the Rose Garden, August 31, 2007

The recent disturbances in the sub-prime mortgage industry are modest -- they're modest in relation to the size of our economy. But if you're a family -- if your family is one of those having trouble making the monthly payments, this problem doesn't seem modest at all. I understand these concerns, and therefore, I've made this a top priority to help our homeowners navigate these financial challenges, so that many families as possible can stay in their homes. That's what we've been working on, a plan to help homeowners.

We've got a role, the government has got a role to play -- but it is limited. A federal bailout of lenders would only encourage a recurrence of the problem. It's not the government's job to bail out speculators, or those who made the decision to buy a home they knew they could never afford. Yet there are many American homeowners who could get through this difficult time with a little flexibility from their lenders, or a little help from their government. So I strongly urge lenders to work with homeowners to adjust their mortgages. I believe lenders have a responsibility to help these good people to renegotiate so they can stay in their home. And today I'm going to outline a variety of steps at the federal level to help American families keep their homes.

Deregulation Meltdown

Europeans on left and right ridicule U.S. money meltdown

Los Angeles Times:

It's a rare day when finance officials, leftist intellectuals and ordinary salespeople can agree on something. But the economic meltdown that wrought its wrath from Rome to Madrid to Berlin this week brought Europeans together in a harsh chorus of condemnation of the excess and disarray on Wall Street. [snip]

The spectacle across the ocean has left a lasting impression on many Europeans. Hanna Evers of Berlin, a cellphone retailer interviewed in the shopping district of Wilmersdorfer Street, said she was angry about the amount of money that had been "burned" in recent days.

"And I'm furious when I see the pictures of Americans who thought they were on the sunny side of life and now have lost their homes and have to live in their cars," Evers said. "I definitely do not feel sorry for the bankers who lost their jobs in the last couple of days. I can't believe that a country like the U.S.A. could have been so careless on a money issue!"

"I was taught that the U.S.A. is the motherland of moneymaking," she added. "And now all I can see is a herd of headless chickens running around on Wall Street."

Meltdown and Bailout:
Why Our Economic System Is on the Verge of Collapse

Joshua Holland, AlterNet:

The immediate cause of our financial meltdown is unchecked, unbridled greed. Mainstream newspapers and the business press are doing a fairly good job of explaining how the lack of regulatory oversight led us into this nightmare.

But you have to dig down one layer to find the cause of that situation. Under cover of the ideological euphemism known as the "free market" and with enormous cash investments over the past four decades, business elites have captured the regulatory organs of powerful democratic states -- nowhere more so than the United States -- and promoted their own narrow economic agendas for short-term gain.

The $700 Billion Bailout:
One More Weapon of Mass Deception

Richard W. Behan, AlterNet:

Not since the Bush administration's lies about Iraq's "weapons of mass destruction" have the American people been so despicably misled.

The Bush administration's proposal to buy, with taxpayers' money, $700 billion of toxic liabilities from the corporate financial titans of Wall Street is a fraud. It is by no means necessary, as Treasury Secretary Henry Paulson claims in the agency's Fact Sheet, "to promote market stability, and help protect American families and the U.S. economy."

It is necessary only to assure the financial survival of Wall Street banks and brokerages, the administration's most loyal supporters and its greatest political contributors -- and in large measure the cause of the financial meltdown the country is facing.

These financial corporations lobbied ferociously to be free of government regulation. Had they not succeeded, they could not have done what they did next: They created and leveraged trillions of dollars of complex "derivatives" -- mortgage-backed securities, collateralized debt obligations and credit default swaps -- all riding on an unprecedented real estate bubble stimulated by their frenzy of creative finance. When the bubble burst, as bubbles do, many of these financial titans faced bankruptcy, their obligations far exceeding their assets.

Connect The Dots

DarkSyde:

John McCain may be confused about the need to keep companies like AIG solvent. But as DevilsTower laid out in his spectacular post, Three Times is Enemy Action, there is no doubt it was the intentional actions of people like John McCain and his economic advisor Phil Gramm over the years that created and nurtured the intricate web of shortsighted stupidity that directly enabled this enormous mess:

This is a bullet deliberately fired into the economy by men willing to exercise their ideology regardless of the cost to taxpayers. John McCain may not have had his finger directly on the trigger, but he was there. He assisted. He not only cheered them on, but claimed until last month that he was also "primarily a deregulator."

McCain: I’m glad I deregulated Wall Street.

Think Progress:

In the wake of last week’s financial meltdown, Sen. John McCain (R-AZ) has been calling for more regulation and criticizing lax oversight of Wall Street, despite the fact that he and former senator Phil Gramm passed much of the deregulatory reforms that led to the current crisis.

Now, John McCain wants to deregulate the healthcare industry:



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Kudos to the author.

And a tip o' the hat to KA {{Cate}}, for recommending this.

The Right to Remain Silent

By Saje Williams:

When your President declares war on a oil-rich nation that poses no threat to the United States, you have the Right to Remain Silent. If you choose to give up that right, you will be harassed, insulted, threatened, and otherwise treated as if you are no longer an American.

When you watch America's name being dragged through the mud by power hungry fools in incidents of torture and kidnapping--you have the Right to Remain Silent.

When you hear your President comment that he thinks the Constitution is just a "damned piece of paper," you have the Right to Remain Silent.

When you learn that the plans for war were already on the table before 9/11, you have the Right to Remain Silent.

When a CIA operative has her cover blown because her husband is considered an enemy of the administration, you have the Right to Remain Silent.

When that same Administration, and its corrupt partners in Congress pass laws that strip away the safety nets for vulnerable American citizens, you have the Right to Remain Silent.

When a powerful hurricane levels a great American City and you watch people suffering on television for days, while aid is turned away by the authorities, you have the Right to Remain Silent.

While this administration continues to subsidize the oil companies during times of RECORD profits, you have the Right to Remain Silent.

When viciously obnoxious pundits are welcomed onto American news programs and treated as if they're decent, hard-working folks, you have the Right to Remain Silent.

While thousands of our soldiers are sent to a dry and dusty land to kill or be killed, you have the Right to Remain Silent.

When you finally begin to see the light at the end of the tunnel, having elected a majority of allegedly like-minded citizens to Congress to fight against the abuses of this administration only to find that they don't have the spine to pull it off, you have the Right to Remain Silent.

When you realize that the Iraqi people are NOT, in fact, better off than they were under a brutal dictator, you have the Right to Remain Silent.

When you discover that there's no easy way out of the war and our troops will continue to die while Iraq staggers its way through a horrific civil war, you have the Right to Remain Silent.

When you find that this administration, after nearly breaking our military with its incompetence and corruption, is trying to come up with a way to go to war with even MORE Middle Eastern countries, despite the fact that it hasn't managed even the ghost of a victory in either front it's currently fighting, you have the Right to Remain Silent.

While a sizeable portion of the population of your fellow Americans think you should be killed or thrown in prison for daring to have a different opinion about the way all this is going, and an unfavorable view of THEIR chosen leader, you have the Right to Remain Silent.

While this administration is busy carving a canyon of debt for you and your children to carry forward into perpetuity, you have the Right to Remain Silent.

While this government's economic policies are driving more and more people into poverty and a lifetime of debt, you have the Right to Remain Silent.

If you choose not to exercise this right, rest assured, the Corporate Media will exercise it for you.

* * * * * * * * * *

"Our lives begin to end the day we become silent about things that matter." ~ Martin Luther King, Jr.

About our Nation´s Health

In front of the House Committee on Oversight and Government Reform, the former Surgeon General Richard Carmona testified about the Bush administration interference with the Surgeon General's office practicing science-based public health:

[A]lthough most Americans believe that their Surgeon General has the ability to impact the course of public health as “the nation’s doctor,” the reality is that the nation’s doctor has been marginalized and relegated to a position with no independent budget, and with supervisors who are political appointees with partisan agendas. Anything that doesn’t fit into the political appointees’ ideological, theological, or political agenda is ignored, marginalized, or simply buried.

Specifically, Carmona mentioned the issues of stem cell research, abstinence education, and global health reports. He continued,

The problem with this approach is that in public health, as in a democracy, there is nothing worse than ignoring science, or marginalizing the voice of science for reasons driven by changing political winds. The job of Surgeon General is to be “the doctor of the nation”— not “the doctor of a political party.”

Later in the day on the PBS Jim Lehrer News Hour, Carmona said the public should be outraged that their surgeon generals have been marginalized. When challenged as to why he stayed for 6 years, in a situation that he acknowledged was worse than previous administrations, Carmona spoke of the challenges all the surgeon generals have faced, with days they each wanted to quit...but ultimately they all held up the dignity of the surgeon generals office in spite of the challenges, at risk to themselves personally and professionally.

...but did Carmona take those risks? There are times where you quit, so that you can publicize the problems as a service to maintain the dignity of the office (and right before the administration in question is RE-ELECTED might just be a good time). And what does he mean by professional risk? Scientists and academics in public health and beyond (global warming?) have been talking about the Bush administration's supression of good science for years. Carmona's testimony is appreciated, but who knows what harm has occured before he spoke up.