THE GOP PLAN TO GO EASY ON WALL STREET…. After Democrats successfully passed Wall Street reform earlier this year, it’s time for the next step: implementing financial regulatory changes, adding stability to the system. Emboldened congressional Republicans, who made no secret of their fealty to Wall Street lobbyists, hope to block all progress.
The legislation requires regulators to write hundreds of rules to put the law into effect. To their credit, regulatory agencies have begun that process with a sense of mission and depth of expertise that was missing in the years before the financial crisis.
In particular, the Securities and Exchange Commission and the Commodity Futures Trading Commission — which share the all-important regulation of the multitrillion-dollar derivatives market — have proposed rules that are tough and sophisticated. The new Consumer Financial Protection Bureau is ramping up. The Financial Stability Oversight Council, led by the Treasury secretary, will report in January on how to implement the “Volcker rule” to restrict proprietary trading by banks.
The process is painstaking, and the outcome is uncertain. But progress is being made — and the House Republican leaders want none of that.
The incoming GOP chairman of the House Financial Services Committee believes federal policymakers and regulators exist “to serve the banks.” The incoming House Majority Whip has told the Securities and Exchange Commission implementing safeguards would be bad for the economy. An incoming committee chairman with jurisdiction over derivatives has warned officials not to be too strict when it comes to rules on derivatives speculation. The entire caucus is committed to weakening the Consumer Financial Protection Bureau, which exists to protect consumers.
There’s also talk of House Republicans cutting funding to the Securities and Exchange Commission and the Commodity Futures Trading Commission, which are responsible for putting many new regulations in place, unless the agencies agree to go easy on the industry, the way the GOP demands.
And as if the party’s intentions weren’t quite obvious enough, this should eliminate any ambiguities: “A few days ago, incoming Agriculture Chairman Rep. Frank Lucas (R-OK) announced the hire of Ryan McKee as the senior staffer to oversee the Commodity Futures Trading Commission. McKee is currently a lobbyist working for the U.S. Chamber of Commerce’s division dedicated to deregulating complex derivatives products.”
The New York Times‘ editorial added, “In a recent interview on CNBC, the next House majority leader, Eric Cantor of Virginia, said the American people want and expect Republicans to cut off financing for Dodd-Frank, adding that the law is a job killer. Could he be more wrong? Americans’ concern about financial reform is that it is too weak, not too strong. They are furious at the banks, whose recklessness has led to crisis and recession — and high unemployment.”
Yes, but those same Americans just elected a new House majority practically desperate to do the bidding of the same bankers, bailed out Wall Street executives, and hedge fund managers that caused a global financial meltdown.
The public says they’re disgusted with the industry and want stricter safeguards to protect consumers, but nevertheless backed candidates who have every intention of doing the exact opposite.
Nice job, midterm voters.