Look Who’s Complaining About The Financial Reform Bill…

Having long ago been chased away from the Huffington Post, disgusted by their ceaseless Hillary bashing during the 2008 primaries, I have ventured back a little bit of late, if for no other reason than to see if their messiah-worship is as strong as ever. Imagine my surprise to discover the blog’s owner, Arianna Huffington, had penned an article entitled Financial Reform: A Win for Wall Street, A Cold Shoulder for Main Street.

In attitude and methodology, Ms. Huffington most closely resembles Bill Maher. She does her best, as he does, to get ahead of a change in the political currents, so as to ride the wave in an effort to stay relevant. That can be the only explanation for the populist tone in her article, condemning Washington for a financial reform bill that does little to help the American people and pays no more than lip service to reforming the destructive mechanisms of those inflicting their ponzi schemes on the rest of us. She never mentions, though that Dems have been in control of Congress since 2006, and Obama has had a super majority, or near it, since his election. Odd, eh? Who does she think is passing this legislation? The tooth fairy?

One can google the title to read the article in its entirety. I have included some choice paragraphs here:

It’s mission accomplished for financial reform.

Unfortunately, it’s more of a Bush 43 “mission accomplished” than an Apollo 13 “mission accomplished.” That’s because the financial reform bill passed by the Senate last week, like Bush’s ship deck ceremony, is more notable for what it has left to still be done.

The Restoring American Financial Stability Act of 2010 will do no such thing. First, it doesn’t do enough to rein in Wall Street. It doesn’t end “too big to fail” banks, doesn’t create a Glass-Steagall style firewall between commercial and investment banking, keeps taxpayers on the hook for future bailouts, and leaves open dangerous loopholes in the regulation of derivatives. And we can expect more loopholes to be inserted as the bill heads to conference committee. In D.C., crafting a bill without them would be like baking bread without yeast. Though you can’t see them, they’re what makes a Washington bill rise.

There’s a reason a longtime investment banker, speaking to the New York Times, said of his colleagues’ reaction to the new bill, “If you talk to anyone privately, there’s a sigh of relief.”

Don’t expect a similar reaction on Main Street. Despite its name, this bill will not be restoring financial stability to the tens of millions of hardworking Americans whose lives have been turned upside down by the economic crisis.

On nearly every front in the real economy — from jobs to consumer spending to foreclosures — we’ve made virtually no progress at all. While Washington and the media have been consumed with the titanic debate over this reform bill, talk of the actual suffering by actual people in the actual economy is virtually a taboo subject, at least judging by how rarely it makes the front pages or leads the TV news.

She points out that millions of Americans have an unfortunate new perspective: “Now the American Dream is to try to not fall, or do all you can to slow your rate of decline.” She states the “average jobless stint for those unemployed who are 55 and over was around 43 weeks” and college grads entering the…“job market with their expensive degrees will be confronting a youth unemployment rate of almost 20 percent — the highest rate since the Labor Department started tracking youth unemployment in 1948.”

She mentions that those keeping their jobs have had to make due with lower wages and less benefits, paying more of their health care costs. Further:

Adding insult to injury, a growing number of working mothers are having to give up their jobs and rely on welfare because states are cutting back on child care services that allowed them to keep working. And kids across the country are scrambling to find something to do this summer as a number of states make deep cuts to summer school programs.

And where the rumored “green shoots” are concerned

…Turns out, there was a surge in spending — but almost exclusively by the rich. As the LA Times’ Don Lee put it, the “little-noticed reality” behind the “encouraging numbers” was that “much of the new spending has come not from America’s broad middle class but from a small slice of affluent people at the top.”

As the Washington Post reported last week, “lavish fringe benefits” are back at the top end of corporate America, including “country club dues, chauffeured drivers, personal financial planning services, home security systems and parking.” Of the 29 biggest public companies that took taxpayer money, around one in three decided to funnel some of it to its chief executive. As the Post’s Tomoeh Murakami Tse dryly put it: “Those raises contrast with the belt-tightening that many Americans have experienced during the recession.” Nell Minow, co-founder of the Corporate Library, put it more directly: “Marie Antoinette could fit into this crowd without missing a beat.”

Consumer lending is likewise dismal, but as Ms. Huffington reports “the Wall Street economy is happy to accept massive transfusions of cash from the fading middle class.”

She further laments:

This isn’t to say that there were no provisions that would help Main Street considered as part the Restoring American Financial Stability Act of 2010. There were plenty — it’s just that almost all of them were either voted down or taken out and never even put up for a vote. Even something as simple and sensible as putting a cap on credit card interest rates. Sheldon Whitehouse’s amendment to do just that was voted down 60 to 35. So much for “financial stability.” Though I suppose it depends on whose financial stability you care about — the banks’ or the taxpayers’.

By the way, 21 Democratic Senators voted to kill the bill that would have capped usury rates by credit card companies.

And I believe President Obama promised not to hire lobbyists…

…[t]he line between Senator, staffer and lobbyist is pretty blurry these days. A joint report released by SEIU, the Campaign for America’s Future, and the Public Accountability Initiative found that the finance industry has 70 former members of Congress and 940 former federal employees on its lobbying payroll. This includes 33 chiefs of staff, 54 staffers of the House Financial Services Committee and Senate Banking Committee (or of a current member of those committees), and 28 legislative directors. Five of Senate Banking Committee chair Chris Dodd’s former staffers are now working as banking lobbyists, as are eight former staffers for Banking Committee powerhouses Richard Shelby and Chuck Schumer.

And the revolving door spins both ways. As Arthur Delaney reported on HuffPost, 18 percent of current House Financial Services committee staffers used to work on K Street. All told, the financial industry has spent nearly $600 million on lobbying since the collapse of Bear Stearns in March of 2008 — almost a million dollars a day.

Huffington discusses the Merkley-Levin amendment “that would have forced big banks to get rid of their speculative proprietary trading activities, a version of the Volcker rule” which likewise wound up on the cutting room floor.

While Huffington makes a stab at blaming Republicans in her piece, Democrats have to shoulder plenty of blame as well, particularly since they have shielded the practices of Fannie and Freddie at every turn, a fact Huffington conveniently omits even as she complains of the institution itself:

Another reform completely left out of the bill was any reform of Fannie Mae and Freddie Mac. This despite the fact that in just the last quarter Freddie — one half of what the New York Times’ Gretchen Morgenson calls “the elephant in the bailout” — reported a loss of $6.7 billion.

Serious delinquencies on Freddie’s single-family conventional loan portfolio are at 4.13 percent, up from 2.41 percent for the same period last year. And the number of foreclosed units Freddie controls stands at nearly 54,000, up from 29,145 at the end of March 2009.

“I don’t understand why people are not talking about it,” says Dean Baker, of the Center for Economic and Policy Research. “It seems to me the most fundamental question is, have they on an ongoing basis been paying too much for loans even since they went into conservatorship?”

And why would they do that? It’s part of what Morgenson calls a “backdoor bailout of the banks.” In other words, an under-the-radar way to continue shoveling money from struggling taxpayers over to the richest Americans.

But Ms. Huffington saves this damning bit for last –

We’ve been told time and time again over the last two years that right after Washington deals with what’s on its plate, “jobs is next.” Well, it’s been “next” for quite some time now, but it never seems to come to the floor. And now that a financial reform bill has passed, the talk on the Hill is that climate control or immigration will be tackled next. Or that members will just go off for the summer and campaign, flush with all the donations many of them just pocketed from the banks in this latest effort.

I often have a nightmare — a common sort — in which I’m stuck in a forest and I can’t find my way out. I have a friend whose version is that her feet are stuck to the ground and she can’t move. Not a bad description of our leaders’ approach to the massive suffering that’s going on across America.

Our leader? Doesn’t he have a name, Ms. Huffington? Why be so dainty about it? She never pussyfooted around when she trashed anyone else.

I did a word search in Arianna’s lengthy article and nowhere were the words “President” or “Obama” mentioned. The man who Huffington touted as great and gifted now has his feet stuck in the mud and cannot move – or are his feet stuck in miles of BP oil sludge that has washed ashore? Hard to tell.

Since Mr. Obama received more money from Wall Street than any other candidate and has done nothing but compromise, make back room deals and talk about change without offering up much that is effective thus far, it can be no surprise to Ms. Huffington that this legislation is more of the same. He gets to check the “done” box and those of us out here on the ground get laughed at by those in power while we continue to struggle. She has suddenly noticed that the President along with Pelosi and Reid could give a fig about putting Americans back to work? Where has she been?

My sense is that she is seeing the writing on the wall and fears an upcoming bloodbath and sea change in November and wants to get ahead of it. I am not convinced she has had a sudden attack of conscience. Still, I was glad to see Ms. Huffington point out the facts of the situation – even though she seems to have had a memory lapse when it comes to naming those in charge.