I asked subscribers to the Bankster list to rate the bank reform bill that just passed Congress. I appreciate the fact that some folks took the time to rank the three parts of the bill, which include: 1) the Consumer Financial Protection Bureau; 2) the derivatives chapter, and; 3) our favorite "too big to fail" section.
Those that took the time to rate all three sections of the bill averaged a "B" for consumer protection, "C" for derivatives, "F" for too big to fail. However, most Bankster subscribers gave the whole bill an "F." There was general agreement that the bill would not prevent the next crisis because it did not do enough about the financial institutions whose size, power and influence pose a threat to our economy. Bankster subscribers have always cared the most about the "too big to fail" issues and supported the reinstatement of Glass-Steagall, hard size caps on the big banks and other measures to break up the banks.
Democrats and Republicans agree that the federal deficit is a serious problem for the stability of American economy. But over the past few weeks, both parties have fought major battles on how to address this problem. The Democrats won the first round when last week, when President Obama signed a six-month extension of emergency unemployment benefits, surmounting Republican objections that the $34 billion measure would add too much to the deficit. The conflict this week is over the extension of the Bush tax cuts, which are set to expire December 31. As expected, Republicans are fighting for extension of the entire package while many Democrats, including President Obama, vowed to keep them for families making less than $250,000 a year. It is estimated that keeping the tax cuts for households that make more than $250 thousand a year will cost about $40 billion a year. Treasury Secretary Timothy Geithner argued that tax increases on the richest Americans are necessary "to make some progress bringing down our long-term deficits." $34 billion and $40 billion are surely not trivial sums. But if Congress and the Administration are sincere about tackling the deficit, it should confront the biggest expense of federal funds: military spending.
The June update of federal government expenditures in the Wall Street bailout by the Center for Media and Democracy shows that the multi-trillion dollar legacy of the financial crisis largely remains on the government's balance sheet. Our calculations put the total bailout expenditure at $4.74 trillion and the total outstanding balance at $2 trillion.
These numbers are much higher than what is reported in the media because CMD's Wall Street Bailout Cost Table takes into account all 35 government programs, not just the Troubled Asset Relief Program (TARP) managed by the U.S. Treasury Department. Still unpaid: $568 billion in TARP money and $1.4 trillion in Federal Reserve loans and investments.
After a classic David and Goliath showdown between Wall Street might and a small band of reformers, a 2,000 page Wall Street reform bill passed the U.S. Senate Thursday afternoon 60-39. The bill is now final and is headed to the President Obama's desk for signature.
"We were outmatched 300-1, but the bill became stronger as it worked its way through the process," said Heather Booth, director of the national coalition Americans for Financial Reform (AFR). This shows that "with organized people and committed leadership, things can move in the right direction," said Booth.
The fate of the Wall Street reform bill is up in the air after the death of Senator Robert Byrd of West Virginia. The bill is a single confirmed vote short of the 60 votes needed to get past a threatened filibuster by Senate Republicans. From day one, the Bankster team has supported the Consumer Financial Protection Bureau (CFPB) and that is still one of the strongest pieces of the bill. It is a great time to send off the last emails to Senators telling them to put a new cop on the block in the form of a CFPB.
Tell Us What You Think of the Bill
We want to hear from you about what you think of the bill, and what grade you would give it if you were a kindergarten teacher grading Congress on its performance. Conceptually, the bill breaks down into three main parts.
You know that Wall Street reform bill pending in the Senate? Some last minute insertions add up to a surprisingly big win for the developing world.
Oil Companies Required to Detail the Dough Paid to Foreign Governments
First, kudos to Senators Dick Lugar (R-Indiana) and Ben Cardin (D-Maryland) for inserting strong provisions that require extractive companies (oil, natural gas, etc.) to detail in their annual Securities and Exchange Commission (SEC) filings the payments they make to foreign governments. One would think that oil-rich and mineral-rich countries would be, well, rich. Big international firms move in to extract these resources and pay royalties, fees, taxes, bonuses and other monies to national governments. Unfortunately, too frequently this money is put to work lining the pockets of dictators and warlords, rather than building schools or health clinics.