Dear Matt Taibbi, Dodd-Frank is meaningful reform

[ProSense]

People like Matt Taibbi continue to misrepresent the bill with statements like this:

<...>

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 story of how the last real shot at reining in Wall Street got routed tells you everything you need to know about how, and on whose behalf, our government works. It was Congress at its most cowardly, deceptive best, with both parties teaming up to subject reform to death by a thousand paper cuts – with the worst cuts coming, literally, in the final moments before the bill's passage.

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.

<...>

Really?

So these things are not "meaningful reform":

• Regulating the credit ratings agencies by revoking the exemption granted under the Securities Act of 1933
  
  
• Reinstating Glass-Steagall via the Volcker Rule
  
  
• Establishing a first-ever consumer protection bureau
  
  
• Closing loopholes that will benefit consumers and farmers around the world
  
  
• Implementing the most significant financial regulatory reforms since the 1930

[Bluenorthwest]

1. What exactly are 'people like Matt Taibi?'

I know who he is, but who are 'people like him'? What's with that verbiage?

[ProSense]

2. It means people who continue to misrepresent the bill.

Is that not clear?

[vi5]

3. I'm confused....

Are the things he says are not in the bill actually in there? If they are, then yes Taibi is lying about the bill and that is wrong.

But if the things he says are not in the bill are in fact you know....not in the bill, then........yeah not so much. Especially if those things are considered 1)Important reforms by anyone with a good degree of economic knowledge and scholarship (not saying Taibi is that but others who are have voiced that concern) and/or 2) having been 2 key things that led to the most recent economic breakdown.

If there's a law that says it's illegal for me to do a particular thing, that is meaningful.
However, if there's another law that says it's legal for me to do this other thing which has the same effect as doing that other thing that was made illegal, then you can call that "meaningful" but that's going to be a pretty subjective definition of "meaningful".

[ProSense]

5. "Are the things he says are not in the bill actually in there?" Let's look at Tabbi's article

Wall Street's Big Win: Finance reform won't stop the high-risk gambling that wrecked the economy - and Republicans aren't the only ones to blame


<...>

It's not that there's nothing good in the bill. In fact, there are many good things in it, even some historic things. Sen. Bernie Sanders and others won a fight to allow Congress to audit the Fed's books for the first time ever. A new Consumer Financial Protection Bureau was created to protect against predatory lending and other abuses. New lending standards will be employed in the mortgage industry; no more meth addicts buying mansions with credit cards. And in perhaps the biggest win of all, there will be new rules forcing some varieties of derivatives – the arcane instruments that Warren Buffett called "financial weapons of mass destruction" – to be traded and cleared on open exchanges, pushing what had been a completely opaque market into the light of day for the first time.

All of this is great, but taken together, these reforms fail to address even a tenth of the real problem. Worse: They fail to even define what the real problem is. Over a long year of feverish lobbying and brutally intense backroom negotiations, a group of D.C. insiders fought over a single question: Just how much of the truth about the financial crisis should we share with the public? Do we admit that control over the economy in the past dec­ade was ceded to a small group of rapacious criminals who to this day are engaged in a mind-­numbing campaign of theft on a global scale? Or do we pretend that, minus a few bumps in the road that have mostly been smoothed out, the clean-hands capitalism of Adam Smith still rules the day in America? In other words, do people need to know the real version, in all its majestic whorebotchery, or can we get away with some bullshit cover story?

<...>

That's the gist of the first seven paragraphs. Then he goes on to make the case as to why despite these "good" things, the bill is "worse" for not having addressed the problem. His case is built on a loophole in the Volcker Rule and his claim about the Lincoln provision, which are the focus of the rest of the article. He concludes:

Without the Volcker rule and the ­Lincoln rule, the final version of finance reform is like treating the opportunistic symptoms of AIDS without taking on the virus itself. In a sense, the failure of Congress to treat the disease is a tacit admission that it has no strategy for our economy going forward that doesn't involve continually inflating and reinflating speculative bubbles. Which sucks, because what happened to our economy over the past three years, and is still happening to it now, was not an accident or an oversight, but a sweeping crime wave unleashed by a financial industry gone completely over to the dark side. The bill Congress just passed doesn't go after the criminals where they live, or even make what they're doing a crime; all it does is put a baseball bat under the bed and add an extra lock or two on the doors. It's a hack job, a C-minus effort. See you at the next financial crisis.

This is a complete misrepresentation because both the Volcker Rule and the Lincoln provision are in the bill.

[Bluenorthwest]

7. No, not clear at all. Not at all.

This bill is being misrepresented from both pro and con sides. So I assume you include yourself in that 'people like Matt' bit, because you also spin freely. In politics, everybody does. The dishonest people deny that they do, and claim to hold the only pure version of reality. Just how I see it.

[ProSense]

8. "The dishonest people deny that they do"

"So I assume you include yourself in that 'people like Matt' bit, because you also spin freely. In politics, everybody does. The dishonest people deny that they do..."

Do you include yourself in the "dishonest people"?

I made my case in the OP. You are simply trying to label others dishonest without evidence because you apparently have nothing better to do.

[Name removed]

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[ProSense]

27. Who the hell do you think you are talking to? n/t

[flamingdem]

4. Good info nt

[Yavin4]

6. Matt Taibbi Manipulates His Readers

As do a plethora of Left of center writers these days, all with the intention of doing everything that they can to help bring down the Obama administration.

They're just as bad as Drudge and Fox News.

[ProSense]

11. It's unknown

what some people think distortion is going to accomplish. The President is not going to change his policies because people are distorting them.

It's one thing to say that that something didn't go far enough, and another thing entirely to say it's meaningless or makes the situation worse.

[depakid]

20. "as bad as Drudge and Fox News."

Waah, he criticized Obama! Must.be.fox.news.

[Hello_Kitty]

38. Um, okay.

:tinfoil:

Yeah, maybe YOU need to be drug tested.

[roxiejules]

9. Robert Reich thinks the reform was weak

http://www.bohemian.com/bohemian/07.28.10/news-1030.html

Although the financial reform bill may have clipped some of Goldman's wings—its lucrative derivative business may require Goldman to jettison its status as a bank-holding company and the access to the Fed discount window that comes with it—the main point is that the Goldman settlement reveals everything that's weakest about the financial reform bill.

The American people will continue to have to foot the bill for the mistakes of Wall Street's biggest banks because the legislation does nothing to diminish the economic and political power of these giants. It does not cap their size. It does not resurrect the Glass-Steagall Act that once separated commercial (normal) banking from investment (casino) banking. It does not even link the pay of traders and top executives to long-term performance. In other words, it does nothing to change these banks' basic structure. And for this reason it gives them an implicit federal insurance policy against failure unavailable to smaller banks, thereby adding to their economic and political power in the future.

The bill contains hortatory language but is precariously weak in the details. The so-called Volcker Rule has been watered down and delayed. Blanche Lincoln's important proposal that derivatives be traded in separate entities that aren't subsidized by commercial deposits has been shrunk and compromised. Customized derivates can remain underground. The consumer protection agency has been lodged in the Fed, whose own consumer division failed miserably to protect consumers last time around.

[ProSense]

10. Here's why I don't agree with Reich

On every important issue, the legislation merely passes on to regulators decisions about how to oversee the big banks and treat them if they're behaving badly. But if history proves one lesson, it's that regulators won't and can't. They don't have the resources. They don't have the knowledge. They are staffed by people in their 30s and 40s who are paid a small fraction of what the lawyers working for the banks are paid. Many want and expect better-paying jobs on Wall Street after they leave government, and so are shrink-wrapped in a basic conflict of interest. And the big banks' lawyers and accountants can run circles around them by threatening protracted litigation.

<...>

Make no mistake: as long as there's no fundamental change in the structure of Wall Street—as long as the big banks stay as big and are allowed to grow bigger and have every incentive to invent new financial gimmicks with which to bet other peoples'

The separation of commerical banks from investment banks is no different under the current reform from the separation under Glass-Steagall. If Reich believes the current bill is regulatory, does he also believe that Glass-Steagall was regulatory? What's the difference?

The FDIC's new powers will be no different from the old powers in terms of their ability to enforce them. The notion that somehow regulation is all of a sudden ineffective when the push has been to reverse deregulation, is moving the goal-post. There are things in the bill that will change the structure, which include bringing a lot of the shawdow banking operations into the light for the first time.

[Phx_Dem]

12. +1

[Hawkowl]

13. There is no arguing with you

Those of us who insist that the only meaningful reform is to return markets to a pre-Clinton era of tight regulation which worked for over 50 years-an unprecedented time period in the history of world markets.

And then there is you. Who insist that bit of tinkering around the edges are going to prevent us from sliding into catastrophe. History will prove us right.

The reform was not enough to prevent a few big brokerage houses from literally cornering any market, e.g; oil, wheat, stocks, mortgages etc.-- and destroying it simply to make a few bucks. That is the bottom line. It simply isn't enough and we will all pay for it in the end.

[ProSense]

14. "the only meaningful reform is to return markets to a pre-Clinton era of tight regulation"

Not only does this bill do that, it addresses issues that did not exist when many of the pre-Clinton era regulations were enacted.

Still, can you cite the specific pre-Clinton era regulations you think this bill doesn't address?



Edited for clarity

[Hawkowl]

15. It does not seperate financial entities

Commercial banks can own brokerage houses which can own insurance companies. There is no difference right now. There used to be hard lines between these types of companies and ergo, hard lines between risk tolerances. If Paulson hadn't allowed JP Morgan and Goldman Sachs to become commercial bank holding companies, the Fed would not have been able to guarantee their survival. This is the pinnacle of Too Big Too Fail. This means that the average taxpayer/citizen/bank account holder underwrites the most ludicrous, riskiest financial speculation, no matter how detrimental to the economy as a whole.

[ProSense]

16. "It does not seperate financial entities...This is the pinnacle of Too Big Too Fail." Yes it does,

and Glass-Steagall had nothing to do with too big to fail.

The Volcker Rule, similar to Glass-Steagall, separates commercial banking from investment banking.

[Name removed]

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[ProSense]

18. Actually,

not ignored, and I'm not a guy.

[Milo_Bloom]

31. Linking to your own false statements doesn't make them so.

[ProSense]

30. "Taibbi addresses each of the reforms that NonSense claims proves it is meaningful"

Where are you, name-calling is all you have?

[Name removed]

32. Deleted message

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[ProSense]

33. I was lying by expressing my opinion?

"Just making sure no one takes this NonSense seriously."

What's your badge made of?

[Name removed]

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[ProSense]

36. Can you point to where

Taibbi addresses the repeal of Rule 436g or the agricultural commodities loophole?

In fact, isn't Taibbi's claim that the bill doesn't include the following provisions a distortion:

Without the Volcker rule and the ­Lincoln rule, the final version of finance reform is like treating the opportunistic symptoms of AIDS without taking on the virus itself...It's a hack job, a C-minus effort. See you at the next financial crisis.

That's his conclusion.

[Milo_Bloom]

37. Not a distortion in the LEAST

He discusses the LOOPHOLES that render the provisions WORTHLESS.

In discussing the enactment of the Vokler rule, which you FALSELY claim Taibbi said wasn't in the bill, he discusses the LOOPHOLE...

"In a neat trick, Schumer's crew agreed to keep the exemption at three percent – but they raised the limit dramatically by making it three percent of something else. Instead of being pegged to a bank's "tangible equity," the exemption would now be calculated based on a financial firm's "Tier 1" capital – a far bigger pool of money that includes a bank's common shares and deferred-tax assets instead of just preferred shares. In real terms, banks could now put up to 40 percent more into high-risk investments. "

he then goes on to discuss Lincoln...

"The new deal allowed banks to keep their derivatives desks by moving them into subsidiary units and exempted whole classes of derivatives from regulation: interest-rate swaps (the culprits in disasters like Greece and Orange County), foreign-exchange swaps (which helped trigger a global crash after Long Term Capital Management imploded in 1998), cleared credit-default swaps (a big contributor to the AIG collapse) and currency swaps (also involved in the Greece mess). "About 90 percent of the derivatives market was exempted," says Greenberger."


His ACTUAL conclusion is... "The systematic gutting of both the Lincoln rule and the Volcker rule in the final days before the passage of Dodd-Frank was especially painful, in part, because so many other crucial reforms that would have spoken directly to the Big Fraud had already been whitewashed out of the bill. "

This is EXACTLY what is wrong with politics in this country today... people are so desperate to defend their side and have a "win" that they will lie, distort and rewrite reality and take pieces of an article and try to disprove paragraph 3, while ignoring paragraphs 1-2 and 4-10.

[depakid]

19. ....

:rofl:

This is lamest hit piece and THE lamest talking points you've ever posted- and that's saying something.

(and btw: Taibbi didn't say there was nothing in the bill- only just that it failed rather spectacularly to address (or to use his words even define) the major problems.

This quote pretty much sums it up:

Obama and the Democrats boasted that the bill is the "toughest financial reform since the ones we created in the aftermath of the Great Depression" – a claim that would maybe be more impressive if Congress had passed any financial reforms since the Great Depression, or at least any that didn't specifically involve radically undoing the Depression-era laws.

[ProSense]

21. "This is lamest hit piece and THE lamest talking points you've ever posted"

Hit piece? Who was it a hit on? Taibbi?

Are you implying that no one should disagree with him and state why?

[depakid]

22. You said it!

and btw: Glass-Steagall hasn't been "reinstated" although it could have been (Hell, it's only 40 pages).

[brentspeak]

23. Not mentioned by the OP: FinReg will allow banks until 2022 to comply with Volcker Rule

http://www.bloomberg.com/news/2010-06-29/volcker-rule-may-give-goldman-sachs-citigroup-until-2022-to-curb-funds.html

Goldman Sachs Group Inc. and Citigroup Inc. are among U.S. banks that may have as long as a dozen years to cut stakes in in-house hedge funds and private- equity units under a regulatory revamp agreed to last week.

Rules curbing banks’ investments in their own funds would take effect 15 months to two years after a law is passed, according to the bill. Banks would have two years to comply, with the potential for three one-year extensions after that. They could seek another five years for “illiquid” funds such as private equity or real estate, said Lawrence Kaplan, an attorney at Paul, Hastings, Janofsky & Walker LLP in Washington.

Giving banks until 2022 to fully implement the so-called Volcker rule is an accommodation for Wall Street in what President Barack Obama called the toughest financial reforms since the 1930s. The Glass-Steagall Act of 1933 forced commercial banks such as what is now JPMorgan Chase & Co. to shed their investment-banking units in less than two years.

[donheld]

24. Glad to unrecommend once again

[ProSense]

28. Fine, I'll explain again why his article is bogus.

Wall Street's Big Win: Finance reform won't stop the high-risk gambling that wrecked the economy - and Republicans aren't the only ones to blame


<...>

It's not that there's nothing good in the bill. In fact, there are many good things in it, even some historic things. Sen. Bernie Sanders and others won a fight to allow Congress to audit the Fed's books for the first time ever. A new Consumer Financial Protection Bureau was created to protect against predatory lending and other abuses. New lending standards will be employed in the mortgage industry; no more meth addicts buying mansions with credit cards. And in perhaps the biggest win of all, there will be new rules forcing some varieties of derivatives – the arcane instruments that Warren Buffett called "financial weapons of mass destruction" – to be traded and cleared on open exchanges, pushing what had been a completely opaque market into the light of day for the first time.

All of this is great, but taken together, these reforms fail to address even a tenth of the real problem. Worse: They fail to even define what the real problem is. Over a long year of feverish lobbying and brutally intense backroom negotiations, a group of D.C. insiders fought over a single question: Just how much of the truth about the financial crisis should we share with the public? Do we admit that control over the economy in the past dec­ade was ceded to a small group of rapacious criminals who to this day are engaged in a mind-­numbing campaign of theft on a global scale? Or do we pretend that, minus a few bumps in the road that have mostly been smoothed out, the clean-hands capitalism of Adam Smith still rules the day in America? In other words, do people need to know the real version, in all its majestic whorebotchery, or can we get away with some bullshit cover story?

<...>

That's the gist of the first seven paragraphs. Then he goes on to make the case as to why despite these "good" things, the bill is "worse" for not having addressed the problem. His case is built on a loophole in the Volcker Rule and his claim about the Lincoln provision, which are the focus of the rest of the article. He concludes:

Without the Volcker rule and the ­Lincoln rule, the final version of finance reform is like treating the opportunistic symptoms of AIDS without taking on the virus itself. In a sense, the failure of Congress to treat the disease is a tacit admission that it has no strategy for our economy going forward that doesn't involve continually inflating and reinflating speculative bubbles. Which sucks, because what happened to our economy over the past three years, and is still happening to it now, was not an accident or an oversight, but a sweeping crime wave unleashed by a financial industry gone completely over to the dark side. The bill Congress just passed doesn't go after the criminals where they live, or even make what they're doing a crime; all it does is put a baseball bat under the bed and add an extra lock or two on the doors. It's a hack job, a C-minus effort. See you at the next financial crisis.

This is a complete misrepresentation because both the Volcker Rule and the Lincoln provision are in the bill.

[Vinca]

25. Matt Taibbi understands the banking system and scandal

better than 99.9% of our elected officials. He's spot on. Taxpayers are still on the hook when it all goes to hell again and according to people like Elizabeth Warren, it's only a matter of time.

[ProSense]

29. Well, "people like Elizabeth Warren"

do not agree with Taibbi.

[Name removed]

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[Milo_Bloom]

40. Another distortion?

Nothing in the linked article disagrees with what Taibbi wrote.

You REALLY should read the links you post before posting them to prove a point.

[Milo_Bloom]

34. ProSense distorts the truth again?

Amazingly this poster doesn't seem to want to mention this line from the article, "It's not that there's nothing good in the bill. In fact, there are many good things in it, even some historic things."

The rest of this paragraph, Taibbi discusses exactly the items that this OP claims are ignored in the article.

Taibbi then goes on to explain, in great detail, exactly why these "meaningful reforms" become meaningless in the grand scheme or as Taibbi puts it, "All of this is great, but taken together, these reforms fail to address even a tenth of the real problem. Worse: They fail to even define what the real problem is."

Make sure you read the entire original article so you can see exactly what this poster is trying to claim vs REALITY.

[Name removed]

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