Friday, July 16, 2010

America got better today! Another great achievement for Obama & the Democrats

This new financial reform legislation the Democrats passed yesterday is worth celebrating. It's a victory for those who prioritize fiscal responsibility, a victory for conservatives, progressives, libertarians, all Americans, really! This is what change looks like. This is what those of us who voted for Obama wanted. Like, fix stuff. He's delivered, with another campaign promise fulfilled, straight from the Democratic playbook (and platform). Again, thanks for NOTHING, congressional Republicans (w/ the exception of 2 or 3)! I've compiled a few of the best takes/articles on what the legislation means, what it doesn't mean, some of the people involved, and what's next. - sj

Wall Street Reform Passes
Ryan Grim
Shahien Nasiripour
Huffington Post

Nearly two years after major banks brought the global financial system to the brink of collapse, triggering a steep economic decline and crisis-levels of unemployment, Congress passed its Wall Street reform package, 60-39, with only three Republicans joining every Democrat (but one). The president will sign it into law next week.

The bill became stronger as the nation's focus moved from health care to Wall Street reform and became tougher still as the debate was held in the open on the Senate floor and during televised conference committee negotiations. Bank lobbyists were able to beat back the most serious threats to their business model, but enough significant reforms remain to earn the opposition of the American Bankers Association and other Wall Street titans.

When Democrats last reformed the financial sector in the midst of the Great Depression, they had several advantages that today's party lacks:
(click on title of this piece for more of the informative article)

FinReg Vote Passes, Will Become Law
by David Dayen

The Senate passed their cloture vote, as expected, on the Dodd-Frank financial regulatory reform bill. The vote was 60-38, with Scott Brown, Olympia Snowe and Susan Collins supporting from the Republican side, and Russ Feingold opposing. Senatus says that the final vote will be taken up this afternoon, but I haven’t confirmed that. (UPDATE: It’s confirmed that passage will happen today, around 2pm ET.)

The bill is a landmark consumer protection and anti-predatory lending bill. It goes fairly far in that direction, though not quite far enough – the auto dealer exemption is a disappointment. But the mortgage reforms are actually pretty solid, and I have confidence that the consumer protection bureau can have an impact on ending a culture where certain predators in the financial services industry make their profits largely based on how well they can trick people.

As for the Wall Street part of the Wall Street reform bill, the public has no sense whatsoever that it will work. More important, most experts don’t either.
(click on title of this piece for more of the informative article)

FinReg vs Wall Street Reform
by Ezra Klein
Washington Post

Matt Yglesias calls it "the underrated FinReg bill," and I take that headline as a personal victory of sorts.

But he's right about the legislation. The desire for a bill that does more has obscured a clear picture of a bill that does a lot. "We’ve tended to focus much more on what’s not in the bill than on what is in the bill," Yglesias says. "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'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.
(click on title of this piece for more of the informative article)

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