respective fields. I hope you get something out of this. But as I write
I'm listening to the thoughts of some of the 100,000 regular folks from
around the world demonstrating Saturday in the 'Streets of Copenhagen'
the title of today's Democracy Now.. There's nothing like it, and no other
way to get it than listening. Some wonderful music, as well.
Ed
From: "Robert Weissman" <rweissman@citizen.org>
To: <corp-focus@lists.essential.org>
A Little Bit of Wall Street Reform
By Robert Weissman
December 11, 2009
Four hundred forty-two days after Lehman Brothers declared bankruptcy, the
U.S. House of Representatives has finally passed financial reform
legislation.
The long delay between the onset of the financial crisis -- a direct
consequence of a quarter century of deregulation -- and the passage of Wall
Street Reform and Consumer Protection Act of 2009 did not well serve the
cause of reform.
As time passed, public anger over the Wall Street bailout became more
diffuse. And Wall Street relentlessly continued its campaign to undermine
meaningful efforts at reform.
The bill passed today contains some positive measures, but it does not do
nearly enough to rein in the Wall Street banksters. It is wholly
incommensurate with the devastation Wall Street has wreaked across the land
and planet.
Most importantly on the positive side, the bill creates a powerful financial
consumer watchdog agency. Had the Consumer Financial Protection Agency
existed during the go-go years earlier this decade, it could have prevented
millions of consumers from being ripped off -- and protected the banks from
themselves. The financial crisis would have been significantly less severe.
The bill also contains some modestly beneficial provisions establishing
liability for credit ratings firms, regulating derivatives and imposing
leverage limits on the largest institutions. And it includes an important
measure for a comprehensive public auditing of the Federal Reserve.
But there are huge holes in the legislation. Wall Street successfully
maneuvered to keep most of the important big picture reforms off the table.
* The bill does very little to address industry structure. Wall Street and
the big banks engaged in reckless betting under the belief that they were
too big to fail -- that they were protected by a federal backstop. The
biggest banks are now even bigger than they were before the crisis. The
solution to the too-big-to-fail problem is to break up the big banks, so
that the system can absorb their failure. The bill fails to impose limits on
bank size.
Many news accounts misleadingly highlight that the bill gives regulators the
authority to break up big financial institutions. The bill does confer that
authority -- but only upon a finding of a "grave threat to the financial
stability or economy of the United States." It is extraordinarily unlikely
that regulators will ever reach such a finding.
* A related problem is the intermixing of commercial and investment banking
in single firms and resultant excessive risk taking by federal
insurance-backed commercial banks. The bill fails to separate commercial and
investment banking, as the Glass Steagall law did before repeal in 1999, or
otherwise address this problem.
* Financial derivatives and other exotic instruments -- labeled by Warren
Buffett as weapons of financial mass destruction -- fueled the crisis. The
bill contains very modest regulations over financial derivatives but leaves
more than a quarter of the market free from regulation and contains
loopholes to enable another substantial chunk to escape regulatory control.
Even for derivatives covered by the bill, the new rules are very limited.
The bill does not establish a regulated exchange for derivatives trades. It
does not ban financial instruments that do little more than enable
high-stakes gambling. And it does not require the purveyors of derivative
instruments to prove that the benefits of their new products outweigh the
costs and risks to the financial system.
* The bill also fails to tackle seriously the problem of executive and
high-level pay. Wall Street mocks the Congress -- and the American people --
by preparing to pay tens of billions of dollars in bonuses, in the shadow of
a vote on financial regulation and while the financial sector continues to
benefit from trillions of dollars of public supports.
At a minimum, there should be binding rules mandating that bonus pay be tied
to long-term performance. For 2009, there should also be a windfall tax
imposed on Wall Street profits and bonuses.
It's no mystery why this legislation is not stronger. Wall Street spent $5
billion in political investments in the decade before the financial crisis
to obtain deregulation and nonenforcement of existing rules. Despite Wall
Street having crashed the economy, nothing has changed on Capitol Hill. Wall
Street continues to invest heavily in politics and wield enormous influence.
More than 900 former federal employees, including 70 former members of
Congress, are working as lobbyists for the financial services sector this
year. Wall Street has spent more than $40 million on campaign contributions
since November 2008.
But Wall Street was not wholly able to get its way. Leading Wall Street
lobbyists announced at the outset of the legislative process that they
intended to "kill" the Consumer Financial Protection Agency, and they
failed. Now, as the bill heads to the Senate, there is still an opportunity
for a populist upsurge to demand far-reaching controls on Wall Street.
Robert Weissman is president of Public Citizen, <www.citizen.org>.
Focus on the Corporation is distributed to individuals on the listserve
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***
From: zhelp@zcommunications.org
Why ACORN Won
"The U.S. Constitution has prohibited bills of attainder since 1787. U.S.
founders objected to bills of attainder because in England Parliament passed
many such bills against political enemies, used them to throw people in
prison and even execute them without trial."
By Bill Quigley
Quigley's ZSpace Page: Dec 12, 2009
On December 11, 2009, a federal judge ruled that Congress had
unconstitutionally cut off all federal funds to ACORN. The judge issued an
injunction stopping federal authorities from continuing to cut off past,
present and future federal funds to the community organization.
ACORN (Association of Community Organizations for Reform Now) and its allies
in 75 cities will again have access to millions of federal dollars to
counsel people facing foreclosure, seeking IRS tax refunds, and looking for
affordable low cost housing. ACORN, which has received about $54 million in
government grants since 1994, will be able to apply for new federal programs
just like any other organization.
The court ruled that Congress violated the U.S. Constitution "by singling
out ACORN and its affiliates for severe sweeping restrictions" and that such
action constitutes illegal punishment or a "bill of attainder."
What is a bill of attainder? Even most lawyers have no idea. Bills of
attainder are acts of congress which unilaterally punish an individual or
organization. Essentially Congress acts as prosecutor, judge, jury and
executioner.
The U.S. Constitution has prohibited bills of attainder since 1787. U.S.
founders objected to bills of attainder because in England Parliament passed
many such bills against political enemies, used them to throw people in
prison and even execute them without trial.
Congress punished ACORN without even trying to figure out if any laws had
been broken or allowing the 500,000 member organization to defend itself.
What about protecting the taxpayers against fraud? As the court pointed
out, there are many legal ways for the government to investigate and
terminate federal contractors which have been proven to engage in fraud or
illegal activity.
But Congress did not want to wait for trials or proof or to allow ACORN due
process.
Conservatives developed a voting majority and imposed punishment without a
hearing or anything.
ACORN has been a target of right-wing politicians for years. Conservatives
hate ACORN primarily because it registered over two million people to vote
since 2003 and because it has an overwhelming African American, working
class, democratic-voting, membership.
Fox News is obsessed with ACORN. Google Fox News and ACORN and you will
see over two million hits. Google Glenn Beck and ACORN and you get over a
million hits, six hundred thousand for Rush, and three hundred thousand for
Michelle Malkin. Right wing members of Congress accused ACORN of being a
"shell game" using millions of taxpayer dollars "to advertise for a
political candidate" and which "helped President Obama get elected."
After a highly dubious right-wing sting operation in September, the
conservative media machine overran Congress members, including, sadly, many
democrats, and passed the bill of attainder cutting off all federal funds to
ACORN and any affiliates, subsidiaries and allies.
Most Congress reps knew full well this was an illegal bill of attainder as
it was pointed out in the debates and even by the Congressional Research
Office, but voted to let it go through anyway. Representatives Nadler and
Grayson and Senator Leahy, among others, repeatedly pointed out that this
was unconstitutional. Democrats who voted for the bill of attainder
included many who had sought and received help from ACORN members in the
past. They have some explaining to do.
Progressives who remained silent while the nation's largest low income
African American community organization was under attack also should
re-think their lack of support. Did anyone think that if the right-wingers
took down Van Jones and ACORN they would stop there? What is ahead? Surely
the conservative opponents of ACORN will continue to bloviate and continue
to try to put ACORN out of business. There will likely be fights galore.
But with this ruling the fights will be a little fairer.
ACORN won this case. The U.S. Supreme Court has called the prohibition of
congressional bills of attainder a "bulwark against tyranny." Here the
bulwark against tyranny worked to stop the right-wing smear machine.
But the rule of law won too. And all of us and Congress have again been
taught a valuable lesson - there are no shortcuts when it comes to following
the Constitution.
Bill is legal director of the Center for Constitutional Rights and one of
the team who represented ACORN in their successful federal constitutional
challenge. You can read the opinion at www.crrjustice.org or contact Bill
at quigley77@gmail.com
From: Z Net - The Spirit Of Resistance Lives
http://www.zcommunications.org/zspace/commentaries/4074
Commentaries: http://www.zcommunications.org/zspace/commentaries/
Comment: http://www.zcommunications.org/zspace/commentaries/4074#AddComment
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