Financial Reform: Wall Street Wins Again

It is expected that President Obama will sign into law the Dodd-Frank Wall Street Reform and Consumer Protection Act this week. In what his administration will surely proclaim as a victory for Main Street, and the right-wing pundits and media will construe as an affront to capitalism in the omnipresent game of disinformation and propaganda; the only victor will be the Corporate system that dictates our Democracy and wreaks havoc on Global Markets for the sake of more and more profit to the detriment of the earth’s inhabitants.

At well over 2000  pages, the financial reform bill does little to address the systemic issues of the financial institutions that nearly collapsed the global economy through their shortsighted greed and then were given over a Trillion Dollars in tax-funded money for their troubles — first by W. Bush, then Obama as he took office. If anything, the convoluted and poorly written monstrosity of legislation makes the job of financial regulators — the SEC at the forefront — more difficult than ever before and opens the door for even more abuses of the public trust by the institutions that are driven by greed and profit.

Considering the absurd length and wording of the bill, not to mention the added responsibilities placed on the SEC — which is understaffed and historically susceptible to corruption and collusion with the same institutions they regulate — the limited restrictions placed on financial institutions will be all but impossible to impose. Even if the watered down regulations actually do come to fruition and are imposed on any one of the Too Big To Fail Institutions, any lawyer (or team of high-priced lawyers as the case would be) could thwart any attempts at regulation due to the convoluted and intentionally misleading wording of the bill.

Perhaps Harvey Pitt of The Daily Beast has it right when he claims: We’re about to receive legislation that could better be entitled “The Lawyers’ and Lobbyists’ Full Employment Act.

In essence, this milestone (with sarcastic emphasis) of legislation creates a maze of misleading regulations that are ripe for manipulation by the same lawyers and lobbyists who no doubt helped our dearly beloved Chris Dodd and Barney Frank craft the finer points of the bill as is usually the case in our unique model of functioning corporate democracy. As the talking heads and politicos gear up for the inevitable circle jerk of name-calling, finger pointing and fear-mongering by suggesting that this (insert any adjective you wish) bill will cause (Choose: Wall Street or Main Street) to collapse because  (insert any random legal mumbo jumbo from the bill) makes it clear that (Choose: the public or the financial markets) will be doomed for all eternity.

Now that I have the madlibs out of my system, I can state with confidence that the right will be hailing this as the death blow to free enterprise and the beginning of the impending Communist takeover by Comrade Obama. Of course the left will call this a victory for the Obama Administration since the words Reform, Consumer and Protection are in the title — it must be a win for us consumers; it says so right in the title (in the same manner that the right gushed over any bill that mentioned Freedom, Liberty and Patriotism even though stripping freedom and liberty was the objective of those bills). Of course, what will be lost on both sides — who, if you’ve ever read anything I’ve written on the subject, are the exact same side — is what is actually contained in the bill. So let me scour the 2500+ pages so I can share with my valued readers how this bill will save us from another economic meltdown (or exacerbate another meltdown through doing absolutely nothing).

….OK; I read the whole thing, I think I have it figured out now (not really, but it’s fun to pretend).

One the most significant factors in market instability, the derivatives market, has always been an untouchable system that the finance industry created in order to construct a convoluted market to generate the appearance of more wealth, as in liquid assets, from risky trades like hedging and speculation on market futures. While those who generate enormous profits from derivatives lead one to believe they are tangible and material assets, they are nothing more than a facade of economic pseudo-science that exist only on paper and is an ingenious method of creating wealth out of thin air considering generating profit based on speculation on the future of the market is akin to me looking in a crystal ball and telling you that it says tomorrow you are going to give me a million dollars in cash. I then deposit that million dollars into my bank account — based on what the crystal ball told me — and rather than putting me in an institution, the bank credits my account with a million dollars. Voila! Wealth created from thin air. That is of course an overly simplified analysis, yet is fairly accurate and is the one thing that the banking industry will not and cannot lose — can you blame them?

In the Dodd/Frank bill, derivatives are mentioned and there appears to be an attempt at keeping an eye on them, though again, the wording is so utterly distorted that any attempt to regulate the market is contradicted by other poorly worded statutes within the bill. Here’s a brief example from page 844:

‘‘(2) CORE PRINCIPLES FOR DERIVATIVES
CLEARING ORGANIZATIONS.—
‘‘(A) COMPLIANCE.—
‘‘(i) IN GENERAL.—To be registered and to maintain registration as a derivatives clearing organization, a derivatives clearing organization shall comply with each core principle described in this paragraph and any requirement that the Commission may impose by rule or regulation pursuant to section 8a(5).

‘‘(ii) DISCRETION OF DERIVATIVES CLEARING ORGANIZATION.—Subject to any rule or regulation prescribed by the Commission, a derivatives clearing organization shall have reasonable discretion in establishing the manner by which the derivatives clearing organization complies with each core principle described in this paragraph.
‘‘(B) FINANCIAL RESOURCES.—

As one can imagine, this goes on for about another 50 pages. In essence, the SEC is given the power to keep an eye on derivatives (through the creation of the Clearing Organization), yet is given very little power to actually stop seriously risky trading, and could actually be further hampered in attempting to actually regulate the market at all as the SEC was denied the ability to self-fund this massive undertaking so as not to adversely affect campaign contributions from the same institutions they are to be regulating (Pitt).

I am not an Economist nor a Lawyer, yet I have an uncanny ability to spot BS from a mile away. This financial reform bill does nothing at all other than present 2500 pages of nonsense that will have no affect whatsoever on the way Wall Street operates — and most likely will enable them to partake in more risky behavior than before as the burden of enforcing this mess of legislation is put on the SEC. Considering their track record and the fact that they simply do not have the resources to keep an eye on even one tenth of the Institutions they are supposed to be keeping an eye on — and that is before this bill even goes into affect –it is impossible to foresee them being able to do what they have been burdened to do by this piece of legislation that is a blatant slap in the face to the public who will ultimately continue to bail out Wall Street in perpetuity.

The simple fact of the matter is that this bill, sponsored by two Democrats and soon to be signed into law by a President who also happens to be a Democrat, does absolutely nothing to address the systemic failures of a corrupt financial system that is aided and abetted by our elected officials, regardless of party affiliation. As the Democrats and President Obama continue to sell our Democracy to the Corporations, and the Republicans scream about a Government Takeover to confuse and muddy the waters of reality, we must realize that our one party system of government, controlled by Wall Street and other large Corporate Interests, has done nothing but divide us and convince us that there are two vastly different sides with vastly different ideologies. We the people are on the same side and our government — Democrats and Republicans — functions solely to enact the legislation that they are paid to enact by their Corporate Sponsors while they lie and manipulate and turn us against one another as War rages around the world and our ability to sustain a decent living is disappearing before our eyes.

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4 Responses to “Financial Reform: Wall Street Wins Again”

  • Todd Curl says:

    Did you actually read this or do you just go around copying and pasting on any article that has criticism of the Democrats and President Obama? I’m pretty far to the left — which you might have noticed had you actually read the article; further to the left than what you call “progressive” — and I am consistently writing about the symbiotic relationship between our government and the Corporations who dictate legislation that is meant to serve their interests; this financial reform bill being a glaring example. As far as “suiting corporate agendas,” I beg of you to take a close look at who Obama has in his Cabinet and who he is putting in charge of the agencies that are supposed to protect us from these Corporations who seem to plunder the earth’s resources through legislation that does not address any meaningful reform. But hey, you got to link your Photography Site as well as a couple articles that are far to the “right” of the one which you are commenting to. Kudos Dummy.

  • Steward B. Clinton says:

    Like the ignorance of ignoring man’s effect on climate change, this too is a VERY poorly researched article. Even those who are far more scrutinizing (if you ever read a progressive article), were in agreement on this bill being a great one. Read and see that, or not. Either way the FACTS stand. Contrary to the very typical Fox-News LIES and out-of-context example you embellish to suite corporate agendas (again) here http://www.huffingtonpost.com/2010/07/15/wall-street-reform-clears_n_647393.html

    But since bad news sells more than good (especially when seasoned with provocative lies) to those conditioned by Fox (so-called) News to ignore reality, you and your Tea Party will continue to forge ahead, proudly ignorant, and complicit in economic suicide via sloppy biased reporting. But take this with you http://www.businessweek.com/magazine/content/10_16/b4174028669540.htm
    STEEL ADMITS GOP IS EXTREMELY RACIST http://www.huffingtonpost.com/2010/04/22/michael-steele-for-decade_n_547702.html?ref=twitter

  • Todd Curl says:

    Thanks for the comment Patty. My premonitions came true unfortunately as the Administration was proclaiming this the biggest reform since the Great Depression. I don’t know whether to laugh or scream as crap like this gets hailed as a victory for us. We can’t blame this on Bush or the Republicans this time around — it’s all on the Dems who might as well drop the platitudes and just and put an ‘R’ after their names, or ‘c’ for corporation or corrupt as that’s what they and their GOP brethren are good for; but hey, maybe we’ll get a 25 cent increase in minimum wage during Obama’s term — all our troubles will be over. Mmmmm…Corporate Kool-Aide tastes yummy 🙂

  • Patty says:

    A great post Todd. Very sad to know we’ve bene sold out by Democrats. Corporate Owned Democrats.

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