in Matt Taibbi's piece on Wall Street "reform."
Some excerpts:
Dodd-Frank was never going to be a meaningful reform unless these two fateful Clinton-era laws – commercial banks gambling with taxpayer money, and unregulated derivatives being traded in the dark – were reversed...
...The first of the two final battles coalesced around an effort by Sens. Carl Levin of Michigan and Jeff Merkley of Oregon to implement the so-called "Volcker rule," a proposal designed to restore the firewall between investment houses and commercial banks. At the heart of Merkley-Levin was one key section: a ban on proprietary trading.
If Obama's team had had their way, last month's debate over the Volcker rule would never have happened. When the original version of the finance- reform bill passed the House last fall – heavily influenced by treasury secretary and noted pencil-necked Wall Street stooge Timothy Geithner – it contained no attempt to ban banks with federally insured deposits from engaging in prop trading. But that changed when Scott Brown, the Tea Party darling from Massachusetts, blindsided the Democrats by wresting away the seat of deceased liberal icon Ted Kennedy. With voters seething over Wall Street's rampant thievery and fraud, the Democrats suddenly got religion about reckless gambling by the financial industry.
Brown won his election on January 19th; just two days later, on January 21st, President Obama pulled a 180 and announced his support for the Volcker rule. It was a "complete change of policy – a fundamental shift," observed Simon Johnson, an MIT economist and noted financial analyst.
This was clearly the administration's attempt to get back on the right side of populist anger at Wall Street. So when Merkley and Levin took up the job of transforming Volcker's proposal into legislative reality, they assumed the Democratic leadership would be on their side.
It didn't work out that way. The counter attack began in May, when the Republicans objected to Merkley-Levin and invoked the Senate's unanimous-consent rule, by which no amendment comes to the floor unless all 100 members agree to let it be voted on. That left the Volcker rule in legislative purgatory right up to the initial Senate vote on the bill. In interviews, the soft-spoken, gregarious Merkley steadfastly refuses to point the finger at the Democratic leadership for failing to break the legislative logjam. But reading between the lines, it's obvious that he and Levin were on their own – no one with any juice in the key committees lifted a finger to help them. The two senators were like underage geeks who'd been told by Majority Leader Harry Reid that they had to come up with their own keg if they wanted to come to the party.
But come up with a keg they did. On the week of the first Senate vote, Merkley's staffers pored over Senate procedural rules and discovered an arcane clause that allowed them to attach their proposal to an amendment by Republican Sam Brownback of Kansas designed to exempt auto dealers from regulation by the new Consumer Financial Protection Bureau. The Brownback amendment had already been approved for a vote, so once Merkley's people used the remora-fish tactic of sticking to Brownback, there was seemingly no way to prevent Merkley-Levin from going to a vote.
Or so they thought. "We were plumbing the inner rules of the Senate," Merkley says. One of those rules is that when you attach your amendment to another, your measure has to be "germane" to the amendment you're attaching it to. Since Merkley-Levin's ban on prop trading and Brownback's auto-dealer exemption were completely different, this was not a simple thing to accomplish. So Merkley and Levin personally trekked down to one of the more obscure offices in the congressional complex.
"Carl Levin and I went on a trip down to the parliamentarian's office, where I'd never been," Merkley says. "They briefed us on what it took, and the team set about to make it work."
From there, Merkley and Levin hit the phones to lobby other members, including Republicans. Right up to the final vote on May 20th, they thought they had a real shot. "I got the sense that we might pick up quite a few Republican votes," says Merkley. "It was starting to look pretty good."
But that very fact that the Merkley-Levin amendment had such momentum is ultimately what did it in. "What killed us," says Merkley, "was that it was looking pretty good."
What happened next was a prime example of the basic con of congressional politics. Throughout the debate over finance reform, Democrats had sold the public on the idea that it was the Republicans who were killing progressive initiatives. In reality, Republican and Democratic leaders were working together with industry insiders and deep-pocketed lobbyists to prevent rogue members like Merkley and Levin from effecting real change. In public, the parties stage a show of bitter bipartisan stalemate. But when the cameras are off, they fuck like crazed weasels in heat.
With Merkley-Levin looking like a good bet to pass, the Republicans pulled a dual-suicide maneuver. Brownback withdrew his auto-dealer exemption, which instantly killed the ban on prop trading. What Merkley and Levin didn't know was that Brownback had worked out an agreement with the Democratic leadership to surreptitiously restore his auto-dealer exemption later on, when the final bill was reconciled with the House version. In other words, Democratic leaders had teamed up with Republicans behind closed doors to double- cross Merkley and Levin.
Much more (starting on page 2):
http://www.rollingstone.com/politics/news/17390/188551?RS_show_page=1
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