2 Faced Dems

The Democratic Senators and Representatives who tried to craft legislation on a new, independent bank-regulatory body, have caved in to the Republicans and bank lobbyists who don't want the body to be independent.

The "we need sixty votes" meme has come to the rescue of the enemies of reform posing as Democratic friends of change.

How could they expect to get large Wall Street campaign contributions if they set up an agency to regulate those interests--even threatening them with criminal penalties for acting dishonestly and victimizing the US economy?

It's hard to believe that even the messaging-challenged Democrats could fail to frame to their advantage a bill that would prevent banks from abusing the public and engaging in the same practices that brought on the financial catastrophe taxpayers have paid so high a price for. Instead, the attitude seems to be, why even try?

That's assuming, of course, that a powerful consumer protection agency is something Democrats -- including those in the White House -- think is important enough to fight for.

"Here lies the crux of the problem," write Simon Johnson and Peter Boone. "The Obama administration lacks an inner core of smart, well-informed advisers who are deeply skeptical of big banks and eager to do whatever it takes to break a cycle that points to financial and fiscal doom."

William K. Black is is associate professor of economics and law at the University of Missouri, Kansas City. He was a senior regulator during the savings and loan scandal. He was the lead staffer on the successful reregulation of the S&L industry and directed the investigations that led to convictions in many of the worst S&L frauds. He says,

"The proposal to amend the Senate bill to place consumer protection in Treasury, rather than an independent regulatory agency with institutional incentives to protect borrowers, is a sick joke.

Black claims that the only reason he was able to work with others to successfully reregulate the S&L industry is because their group was independent.

So much is clear: The White House is not willing to fight for justice and rally the people in their own best interest, again.

The White House proposed legislation to create a freestanding Consumer Financial Protection Agency last June, and the House passed a regulatory overhaul creating such an agency in December.

Now, the Senate, to "save" the legislation and get "sixty votes" to "break a Republican filibuster" is rewriting the legislation to subordinate the financial services regulatory authority to the Treasury Department or the Federal Reserve, two of the three parties who would have the greatest interest in thwarting any such financial consumer protection regulation.
The politics of despair take root, again.