Ryan Grim of the http://www.huffingtonpost.com wrote an easily understandable column on the status of the current Financial Regulation Bill. The key provision holding back the bill is the Senator Blanche Lincoln provision which forces Banks to spin off the Swaps Trading division accounting for about 10 percent of the profits of Goldman Sachs and JP Morgan Chase. (Bloomberg) Barney Frank (D-MA) whose Finance committee has a large number of conservative Democrats placed there by former Wall Street very successful trader, Rahm Emanuel, Chief of Staff for President Obama when he was the top advisor to House Speaker Nancy Pelosi.
Pelosi made a donation of $23 million to the Democratic Campaign Contribution Committee which helps, but corporate contributions will overwhelm all races. Bills to soften the Supreme Court's blatant attempt to stack our elections in favor of corporations and the wealthy even more, Roberts is showing his true radical right color with the unfortunate gift of gab and fake comradeship.
We already know that all the troubles that President Obama is trying to solve mostly came from the policies of the Bush Cheney 8 years damaging both our economy where job growth was slow except for the financial sector, lobbyists against regulations were put in charge of all the Regulatory Agencies including the FDA, FCC, SEC and Minerals Management. Bush and Cheney also place many of the boys and girls into the Civil Service so if a Democrat is chosen President, they could serve to gum up the works.
With essentially 100 percent of the Senate Republicans preventing a vote on all bills of consequence has made it quite difficult for Obama to institute reforms. We also have a crooked corporate Supreme Court which broke 100 years of precedent and now allow the well financed corporations to openly or not put any amount of money into both Republican and Democratic candidates which explains many of the contents of the finance bill.
Even though the Republicans are working behind to scenes to kill the bill, if the 60 votes can be “bought”, I suspect more Republicans will have to vote for the bill if they are up for reelection in 2010.
Dylan Ratigan who worked on Wall Street, Bloomberg, and CNBC before his MSNBC stint has been the most virulent opponent of the Obama administration from the far left. So he used selective data fro the Grim column to condemn the Democrats. Isn’t propaganda wonderful. Hitler used it well, Wilson used it well, and corporations have used it the best ever.
Wikipedia: "Orwellian" describes the situation, idea, or societal condition that George Orwell identified as being destructive to the welfare of a free society. It connotes an attitude and a policy of control by propaganda, surveillance, misinformation, denial of truth, and manipulation of the past, including the "unperson" — a person whose past existence is expunged from the public record and memory, practiced by modern repressive governments. Often, this includes the circumstances depicted in his novels, particularly Nineteen Eighty-Four.
Orwell's ideas about personal freedom and state authority developed when he was a British colonial administrator in Burma. He was fascinated by the effect of colonialism on the individual person, requiring acceptance of the idea that the colonialist oppressor exists only for the good of the oppressed person and people.
There has also been a great deal of discourse on the possibility that Orwell galvanized his ideas of oppression during his experience, and his subsequent writings in the English press, in Spain. Orwell was a member of the POUM militia and suffered suppression and escaped arrest by the Comintern faction working within the Republican Government. Following his escape he made a strong case for defending the Spanish revolution from the Communists there, and the misinformation in the press at home. During this period he formed strong ideas about the reportage of events, and their context in his own ideas of imperialism and democracy.
This often brought him into conflict with literary peers such as W.H. Auden and Stephen Spender[1].
In 1940 he engaged himself in the practise of supporting mis-information for a revolutionary purpose with the The Lion and the Unicorn: Socialism and the English Genius. A counter-point to his previous work, immediately after his return from Spain, Homage to Catalonia. Homage was elementary in Orwell's definition of the process of truth-power connection and its relevance to ideas of freedom versus authority, whereas Lion & Unicorn was a formative piece of 'propaganda'. The narrative of the two is one that informed Orwell's later works such as Nineteen Eighty-Four and Animal Farm. … http://en.wikipedia.org/wiki/Orwellian
Jim Kawakami, June 24, 2010, http://jimboguy.blogspot.com
The long-awaited showdown between banks and Sen. Blanche Lincoln over her derivatives reform section of the Wall Street bill begins Thursday. The conference committee will consider an offer made by the House to amend Senate legislation that forces banks to spin off their swaps desk and separately capitalize that operation, while also bringing the business out into the open, requiring derivatives to be cleared and traded on exchanges.
However, one analyst identified an end-run the House may be attempting. Section 754 of the offer advanced by House Financial Services chairman Barney Frank (D-Mass.) says that "the Bank Holding Company Act of 1956 is amended by striking 'commodities activities' each place it appears and inserting 'commodities and swap activities,' which would make the swaps desks a 'functionally regulated subsidiary.'"
That would mean that a bank getting taxpayer assistance through the Federal Reserve window would still be required to spin off its swaps desk, but it could maintain it within a separate section of the bank holding company that isn't getting government assistance. "This is not as strong as a complete spinoff, but it still will have positive implications for the derivatives markets in the medium to long term," Adam White, director of research at White Knight Research & Trading, told HuffPost. White is a backer of Lincoln's original language.
The improvement would come because the big banks currently have a major competitive advantage in the swaps business: Everyone knows that they're "too big to fail," so that if they don't have the capital to pay off a losing bet, the government will step in and their counterparties will be paid. The smart move, then, is to trade with such banks. If the swaps desk were no longer part of the bank itself, but rather part of the bank holding company, the chance of a bailout is diminished, White said.
The Senate, however, has the upper hand, because its derivatives section is in the base bill. Both chambers would need to agree to the changes in order for the base bill to be tossed out.
If the Senate accepts the House changes, however, one of two things will happen, said Michael Greenberger, a University of Maryland professor and the former head of the Commodity Futures Trading Commission's Division of Trading and Markets. "Either we're going to have a bill that's regulation in name only or we going to have no regulation, which means no consumer protection infrastructure, no resolution authority and the whole of the benefits the reform provides," said Greenberger, who said he generally concurred with White's overall analysis, which can be found at the bottom of this story. Greenberger reasoned that if the House goes to far in weakening the derivatives portion, progressives in the Senate will vote against the bill on final passage, dooming it and the reform within it.
The House weakens the Senate legislation in a variety of ways that would lead to fewer trades being cleared and lower capital requirements. In many ways, said Greenberger, the House offer is even weaker than the version passed in December by the lower chamber.
Heather Booth, the head of Americans for Financial Reform, which is fighting for a strong bill, said that her organization believes Frank and Agriculture Committee chairman Collin Peterson (D-Minn.) do want tough reform, but are battling against the power Wall Street wields in the House. "We think Chairman Frank is trying to fight for strong reform and Chairman Collin Peterson is trying to fight for reform and they understand the riskiness of these speculative trades, and are very knowledgeable and very committed," but, she added: "For a variety of reasons, we think the Senate offer is much stronger than the House."
The House effort to gut Lincoln's reform is so extreme, said Greenberger, that enough progressives in the Senate would abandon the bill on a final vote and bring down reform altogether. Progressives often cave to centrist compromise under the reasoning that something is better than nothing. Covering some people with health insurance is, for instance, better than covering no people. But when it comes to Wall Street reform, something isn't always better than nothing. If the reform isn't tough enough and the same practices are allowed to continue through a variety of loopholes, the risk to the system and the size of the financial catastrophe that could occur may be no greater and no less with reform than without. The shame, said Greenberger, would be to lose valuable reforms such as the consumer financial protection bureau. But without real derivatives reform, he said, the country could experience another financial panic, leading to taxpayer bailouts, in as little as six months.
"It's one issue after the other where loopholes are created in an attempt to make the system unworkable and overly lax," Greenberger said. The argument that tough reform will send the derivatives business overseas is a false one, said Greenberger, speaking by phone from London where, he noted, our allies are crafting legislation much tougher on derivatives than the U.S. is even contemplating. "Germany is outright banning these risky products. The Asian countries, since the financial crisis in the nineties, are adamantly opposed," he said. "There's no place for Wall Street to go." He added that traders would pay a much higher tax rate anywhere else.
And if they do find somewhere to take explosively risky activity, he said, that's all for the better. "Better to have that kind of nuclear explosive activity take place abroad than the United States. The Europeans and the Asians are on to this and they're simply not going to allow it," he said. New York Democrats who worry about lost tax revenue are experiencing the "phenomenon of amnesia," apparently forgetting the huge holes slashed in state revenue by the 2008 financial crisis and the economic devastation it left in its wake. http://www.huffingtonpost.com/2010/06/23/final-derivatives-showdown_n_623573.html
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