The Big Question: How many votes will financial reform get?


Robert Weissman, president of Public Citizen, said:

Odds are good that the Wall Street reform bill is going to pass with strong bipartisan support. If Senator Shelby votes yes, there will be 75 votes in favor.

The reason why is simple.

"You've got an environment, six months before an election, where politicians are acting like politicians," Sam Geduldig, a financial lobbyist and former Republican staffer, told the Washington Post last week. "They are viewing any vote as a potential campaign ad. And that might not be good for any of us."

By "us," Geduldig means industry lobbyists, of course. "Politicians being politicians," also known as being responsive to overwhelming public sentiment that runs contrary to powerful corporate interests, is good for the cause of Wall Street reform.

Of course, it's possible that politicians revert to the norm, in which case the bill will pass with something closer to 60 votes, with only a few senators crossing party lines (possibly in both directions).

If you go with the assumption that the bill will ultimately pass, more vital than the final vote count is the result on amendments. Wall Street and the big banks won a huge 33-61 vote last Thursday, with the Senate voting down the Brown-Levin amendment to break up the banks.

One of the biggest remaining votes related to industry structure and power is the Merkley-Levin amendment, to strengthen the Volcker Rule provision in the bill. It would ensure commercial banks stop betting on the equity, bond and derivatives markets; prevent banks from running their own hedge funds; make large, non-bank financial companies hold more capital against the risk of loss on speculative bets; and prohibit Goldman Sachs-style conflicts of interest, with firms betting against securities they sold to clients.

The outcome of Merkley-Levin is truly up for grabs, and a test of whether politicians will side with the constituents or their Wall Street donors.

Peter Navarro, professor of economics and public policy at U.C. Irvine, said:

Before our august senators go to piously pass a bill in excess of 1500 pages, it is worth noting that the whole financial crisis would have been avoided if we simply had a Federal Reserve that followed a rules-based monetary policy and a regulation that required homebuyers to put 20% down. Occam’s razor…




Justin Raimondo, editorial director of Antiwar.com, said:

If I were among the Washington elite, I wouldn't worry about this one: I'm sure Goldman Sachs has the cash to buy off anyone who opposes the Permanent Bailout masquerading as "financial reform." While the rest of us struggle with a rapidly collapsing economy, and the hyper-inflation to come, the Capitol Hill crowd will simply release their golden parachutes and float effortlessly to the ground.



 
Michael J. Wilson,
Legislative Director of  Americans for Democratic Action, said:

At this rate, it looks to be a whole bunch.  But it really depends on how well the left-right coalition holds up against the forces of the institutional middle: moderate Senators of both parties, Wall Street, the Fed and, most importantly, the White House.  The left-right activists properly see the current financial crisis as an opportunity to address some rotten aspects of the system that were allowed during the previous Administration, such as the Fed’s quasi-public, quasi-private status that invites conflicts of interest. (For instance, there are too many private bankers sitting on the Fed’s Open Market Committee that set government policy on interest rates.)  The institutional middle’s agenda is simple: don’t spook the markets.

What’s fascinating about financial reform is that it’s where the two ends of the political spectrum bend to (a bit suspiciously, perhaps) meet up.  Witness the co-sponsorship of a bill to audit the Fed by Vermont’s Senator Bernie Sanders and the Texan Representative Ron Paul – arguably political opposites.

Odd ideological coalitions aside, the vote will be a real test for the Democratic Party.  Today’s Dems have little in common with the slave-holding, free-trade southerners from 150 years ago.  The American political deck has been shuffled several times since then.  But the one continuous theme throughout the Party’s history has been hostility towards the big money boys in New York.  This week’s vote will reveal how deeply that anti-Wall Street streak still runs in Democratic veins.

 

John F. McManus, President of The John Birch Society, said:

Sad to say, it will probably attract enough support in the Senate to be enacted.
 
The kind of financial reform our country needs is to get the government out of so many areas where it doesn't belong.  One good example of government being where it doesn't belong is Fannie Mae and Freddie Mac whose "magnificent" performance has now led to $145 billion in bailouts paid for by taxpayers.  Neither of these two mortgage giants should have been created in the first place.
 
Giving more taxpayer money to already failed entities makes no sense whatsoever - unless the goal is to have government run everything.
 
One good question about the financial reform is, "How much will this cost taxpayers?"  I don't expect to hear any frank answers, even from Barney "Frank."
 

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