Remember Reform: Finances And The Street

Seven decades ago, the titans of Wall Street were far less influential a force on the economy of the United States. The stock market crash of October, 1929 traditionally marks the beginning of the Great Depression, but it was a deeply flawed banking system that was the primary agent of misery. The simple truth, lost in all of the partisan revision of history, is that it was the policies of Franklin Delano Roosevelt that moved the nation out of the Great Depression. He passed a series of programs that put folks back to work, injected capital into the economy, and built a staggering amount of commercial infrastructure still in use today.

F.D.R. also passed a series of regulatory regimes that kept the capital markets and banking systems from blowing themselves up for the remainder of the century. Only the savings and loan industry, exempted from much of the reforms of the 1930’s, suffered a major setback. Then, many of these reforms and safeguards were rolled back. Beginning in the late 1990’s, first Clinton then Bush pushed to allow capital markets unlimited abilities to take on and share risk. The Rand/Greenspan mantra, “markets can regulate themselves” was the standard the securities regulators lived by in the first decade of the 21st Century. The results proved that time and history hadn’t taught Wall Street any lessons of restraint or common sense.

It seemed a no-brainer that Congress would substantially re-regulate the insurance and investment banking marketplace, but Congressional Republicans had vowed to block all legislative initiatives pushed by the President, and they held firm. Financial reform, like every other piece of legislation in the last two years, had to clear the unprecedented legislative hurdle of finding 60 senators to approve cloture. Just like health care reform, cap and trade, and the stimulus, financial reform would not be allowed to come to an up or down, democratic vote. The most amazing legislative accomplishment of the last two years, built on the backs of working voters assaulted by Wall Street, was the Republicans’ success at turning the United States into a super-majority rule nation without the need for a constitutional amendment.

The weapons in the conservative arsenal were, by the time of the reform debate, familiar to the nation. Financial reform was “socialist”, “fascist”, or part of “Obama’s Muslim plot”. The details of the debate were largely obscured by the nonsense perpetrated by the Tea Party and other shadowy conservative media whores. Glenn Beck, in his unrelenting ignorance, was moved to call F.D.R. an “evil man”, and dug up pseudo-experts who rolled out the claim that the New Deal policies that ended the Depression were failures. On the liberal edge of the conservative mainstream media, pontificating pundits railed against the Obama Administration in advance…just in case the former Clinton officials in the Treasury were ready to hijack reform for their own Wall Street ambitions.

Through all of this turmoil, and in spite of all of the backroom back-stabbings, a bill was somehow passed. Like health reform and the stimulus, it was far from perfect. The new law, however, was able to streamline the byzantine regulatory structure and provide, for the first time, a consumer-centered voice at the highest levels of government. The aim of this legislation; force lenders and allied businesses to be clear, detailed, and honest in their communications and so pave the way for Americans to better use personal responsibility to avoid future crashes. Work was done in the bill limiting the risk exposure that firms would be allowed to assume, and requirements for the self-funding of asset crashes should limit the effects of “too big to fail”.

Americans will note that, after all of the reform bills and bailouts, our nation still has privately owned and operated auto makers, banks, and health care providers. We can also note that most of the bailout funds have been repaid (although the opportunity costs of lending below market by the taxpayer can never be recouped). The finance reform bill, passed during an election year by legislators who are largely running scared, stands as an example of the best we can hope for in this political climate. If the American voter aspires to more from Congress, then they must stand up and accept honest promises from their representatives, and vote in every election.

We have this tendency of voting for the person most able to convince us that fairy tales do come true; we can have lower taxes, normal services, and balanced budgets; the market can take of itself and the average worker will share in the rewards; where we have problems in our nation, it is they and them who are the problem. We should never settle, but it is important to acknowledge when progress is made. Finance reform stands as another important accomplishment of this Administration and Congress, so go to the polls on Tuesday and acknowledge the work.

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Animated Balls: Election 2012

Episode 1: It's Hard to Choose Just One

Episode 2: Occupy Wall Street

Episode 3: 999! The Cain Train to Prosperity

Episode 4: Small Government

Episode 5: Newt is Forgiven

Episode 6: A Candidate with Big Balls

Episode 7: Why We Must Elect Rick!

Episode 8: Don't Make Me Use the "S" Word!

Episode 9: Santorum & Obamaville

Episode 10: Settle for Mitt!

Episode 12: Austerity and Obama's Debt!

Episode 13: From My Cold, Dead Hands!

Episode 14: Ryan is a Bold Choice for VP!

Episode 15: Mitt Romney's Taxes

Episode 16: Mitt & Me; 2 Peas in a Pod!

Episode 17: Mitt and the 47%

Episode 18: The PA Voter ID Law

Episode 19: The Boss is Running!

Episode 20: Benghazi Has Legs

Episode 21: Grover, the NRA, and the GOP

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