While the financial industry got a stocking stuffer, we got stiffed.
House Democrats passed something they called reform and handed it over to the Senate.
But the bill is laden with loopholes, put there by Blue Dogs and New Democrats doing the bidding of the financial institutions.
Democratic leaders, from President Obama to Rep. Barney Frank have demonstrated that they are at best ineffectual in spearheading efforts to win real reform that puts consumers and taxpayers’ interests first. At worst, they're undermining those efforts.
The resilience shown by the financial industry in blunting efforts at sensible regulation has been nothing short of breathtaking.
Despite these setbacks, the battle may not be lost. It continues on two fronts:
First, keeping the pressure on the Senate. The main sponsor of the reform legislation, Sen. Chris Dodd, though usually an ally of the financial industry, has put together a surprisingly strong reform package. Dodd is hardly an altruist; he’s afraid of getting whooped in an election, so he is trying on the role of tough populist. Reform advocates don’t have to fall for the act but they do have to take full advantage of Dodd’s troubles.
The second front is the continuing effort by a handful in Congress to push for the reinstatement of a contemporary version of the Glass-Steagall Act, the landmark depression-era reform that kept the staid world of federally-guaranteed traditional banking separate from the riskier high-flying world of investment banking. That repeal of Glass-Steagall 10 years ago was a main cause of the financial crisis – and taxpayers getting stuck with the tab for bankers’ risky gambling ventures. Rep. Steny Hoyer, D-Md, insisted Tuesday that the House would vote on reinstating Glass-Steagall before the end of the year.
The fact that reinstating Glass-Steagall is still on the table shows that Dodd’s weakness is just a precursor of the problems facing other Democrats, who are hearing from constituents unhappy about the majority’s support for an unpopular war, tepid action on getting people back to work as well as their cowardly surrender to Wall Street.
While few politicians are foolhardy enough to oppose financial reform outright, many are counting on the voters to be flummoxed by the complexity of the subject and fooled by phony reform.
It’s up to voters to see through this fog and seize the opportunity provided by the Democrats’ vulnerability. Without leadership from above, reform advocates will have to provide it from below.
Here’s how to contact your representative and senator, Democrat or Republican, to remind them that if they don’t start standing up to Wall Street now, they’ll be rewarded with a lump a coal next year.