Obama on Dodd-Frank: Is He Serious?
Posted by Larry Doyle on August 20, 2013 10:10 AM |
Three full years after the passage of the Dodd-Frank Wall Street Reform and Consumer Protection Act, less than 40 percent of the watered-down rules within the reform have actually been written.
And those that have fall mostly under the heading of low-hanging fruit.
President Obama played the populist card again yesterday, calling on Congress and the independent regulators to complete their work on this reform.
Does President Obama think the American public actually believes Wall Street has been or will be reformed via Dodd-Frank? Really? Is he serious?
Not only hasn’t the industry been reformed since the passage of Dodd-Frank, but it has actually continued to display the same brazen will and collusive, manipulative behaviors typically associated with those involved in “organized activities.” How does this happen?
When the pols and regulators are In Bed with Wall Street (I beg your indulgence, but this is screaming out here), then we should expect that the cops will continue to protect the industry at the expense of consumers, investors, and taxpayers.
Wall Street owns Washington.
I could write at length on this topic but, having just read a fabulous review at Wall Street on Parade, I will defer to my friends at that site who write the following:
The White House issued a statement yesterday on the President’s meeting with the federal agencies that regulate Wall Street. Curiously, the phrase used to describe the agencies was “independent regulators.” The President’s Deputy Press Secretary, Josh Earnest, held a press briefing with reporters yesterday, taking questions on the meeting. In that briefing, Earnest referred to the regulators as “independent” seven times.
If the President now finds it necessary to attempt to brainwash the American public through endless repetition of the word “independent” to shore up sagging public doubt that there are any real cops on the beat when it comes to policing Wall Street, he has no one to blame but himself.
When President Obama appointed Mary Jo White to head the Securities and Exchange Commission (SEC), Jack Lew for U.S. Treasury Secretary, and has floated the idea for weeks that Larry Summers could become Chairman of the Federal Reserve, he critically undermined the already low disregard the public holds toward Wall Street’s regulators.
White came to the SEC in April from the Wall Street legal powerhouse, Debevoise & Plimpton. She wasn’t just any lawyer there; she chaired the Litigation Department where she led a team of more than 200 lawyers defending Wall Street’s too-big-to-fail banks. It was understood that in most of the ongoing cases against the largest Wall Street firms, White would have to recuse herself at the SEC. Can you really call that an “independent” regulator?
Lew came to the U.S. Treasury from Citigroup – the bank that had received the largest taxpayer bailout assistance of any bank in the 2008 Wall Street crash. On his way out the door, Lew accepted a $940,000 bonus from the insolvent bank, which was paid with taxpayer money. Lew was Chief Operating Officer of the division that brought down the bank.
Summers, of course, would round out the team of not-so-independent regulators if he were appointed by the President to lead the Federal Reserve. Summers was one of the key individuals that pushed for the deregulation of Wall Street in the Clinton administration. Summers is also currently on the payroll of Citigroup as a consultant at an undisclosed amount of compensation.
The idea of infusing the concept of “independent regulator” may also have something to do with the recent charges that big Wall Street firms effectively control the London Metal Exchange and its rules committee as they simultaneously go about keeping aluminum off the market in metal warehouses that the Federal Reserve gave them carte blanche to own.
Or possibly it’s the revelations of a big bank cartel controlling the setting of Libor interest rates that impacted trillions of dollars in interest rate futures trading, swaps, student loans and mortgages while the not-so-independent British Bankers Association set at the helm.
The President may well have other things on his mind in calling the high profile meeting. One of those is that members of his own party think the Dodd-Frank reform legislation is a bust and are pushing to restore the Glass-Steagall Act, separating Wall Street casinos from banks holding insured deposits. There are now two separate pieces of legislation in the Senate and House calling for the restoration of this depression era investor protection act.
There is also that pesky problem that real experts on the financial markets are increasingly testifying before Congress on just how dangerous Wall Street remains to the health of the U.S. economy, despite Dodd-Frank.
I could not have said it better myself.
Perhaps I should make a point of sending an early copy of my book to the White House so everybody there might learn just how corrupt the system was, is, and will continue to be as long as the co-conspirators on Wall Street and in Washington remain in bed with each other.
Please pre-order a copy of my book, In Bed with Wall Street: The Conspiracy Crippling Our Global Economy, that will be published by Palgrave Macmillan on January 7, 2014.
For those reading this via a syndicated outlet or receiving it via e-mail or another delivery, please visit my blog and comment on this piece of ‘sense on cents’.
I have no business interest with any entity referenced in this commentary. The opinions expressed are my own. I am a proponent of real transparency within our markets so that investor confidence and investor protection can be achieved.