Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
Will Biden’s Neo-Populist Economic Doctrine Support Gold? - 25th Sep 21
Markets Deflationary Winds Howling - 25th Sep 21
Crude Oil Price Piercing the Sky: Where Will We See the Black Gold by Xmas? - 25th Sep 21
Cryptocurrency policy choices and consequences - 25th Sep 21
The Next Emma Raducanu UK Tennis Star Pleasing the Crowds at Millhouses Park Sheffield - 25th Sep 21
Stock Market Rescued by the Fed Again? - 24th Sep 21
Are Amazon Best Cheap Memory Foam Mattresses Any good? Bedzonline £69 4ft Small Double ECO Example - 24th Sep 21
Evergrande not a Minsky Moment - 24th Sep 21
UK Energy Firms Scamming Customers Out of Their Best Fixed Rate Gas Tariffs - 23rd Sep 21
Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Should School Children be Jabbed with Pfizer Covid-19 Vaccine To Foster Herd Immunity? - UK - 23rd Sep 21
HOW TO SAVE MONEY ON CAR INSURANCE - 23rd Sep 21
Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
Trading Crude Oil ETFs in Foreign Currencies: What to Focus On - 22nd Sep 21
URGENT - Crypto-trader event - 'Bitcoin... back to $65,000?' - 22nd Sep 21
Stock Market Time to Buy the Dip? - 22nd Sep 21
US Dollar Bears Are Fresh Out of Honey Pots - 22nd Sep 21
MetaTrader 5 Features Every Trader Should Know - 22nd Sep 21
Evergrande China's Lehman's Moment, Tip of the Ice Berg in Financial Crisis 2.0 - 21st Sep 21
The Fed Is Playing The Biggest Game Of Chicken In History - 21st Sep 21
Focus on Stock Market Short-term Cycle - 21st Sep 21
Lands End Cornwall In VR360 - UK Holidays, Staycations - 21st Sep 21
Stock Market FOMO Hits September CRASH Brick Wall - Dow Trend Forecast 2021 Review - 20th Sep 21
Two Huge, Overlooked Drains on Global Silver Supplies - 20th Sep 21
Gold gets hammered but Copper fails to seize the moment - 20th Sep 21
New arms race and nuclear risks could spell End to the Asian Century - 20th Sep 21
Stock Market FOMO Hits September Brick Wall - Dow Trend Forecast 2021 Review - 19th Sep 21
Dow Forecasting Neural Nets, Crossing the Rubicon With Three High Risk Chinese Tech Stocks - 18th Sep 21
If Post-1971 Monetary System Is Bad, Why Isn’t Gold Higher? - 18th Sep 21
Stock Market Shaking Off the Taper Blues - 18th Sep 21
So... This Happened! One Crypto Goes From "Little-Known" -to- "Top 10" in 6 Weeks - 18th Sep 21
Why a Financial Markets "Panic" May Be Just Around the Corner - 18th Sep 21
An Update on the End of College… and a New Way to Profit - 16th Sep 21
What Kind of Support and Services Can Your Accountant Provide? Your Main Questions Answered - 16th Sep 21
Consistent performance makes waste a good place to buy stocks - 16th Sep 21
Dow Stock Market Trend Forecasting Neural Nets Pattern Recognition - 15th Sep 21
Eurozone Impact on Gold: The ECB and the Phantom Taper - 15th Sep 21
Fed To Taper into Weakening Economy - 15th Sep 21
Gold Miners: Last of the Summer Wine - 15th Sep 21
How does product development affect a company’s market value? - 15th Sep 21
Types of Investment Property to Become Familiar with - 15th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

U.S. Politicians Engaged in Ongoing Sabotage Of Financial Reform

Politics / Market Regulation Jun 10, 2011 - 04:44 AM GMT

By: Danny_Schechter

Politics

Best Financial Markets Analysis ArticleSome years back Thomas Franck nailed it in his book, “The Wrecking Crew.” It was subtitled “How Conservatives Rule” and showed how narrow self-interest and well practiced cynicism in the service of partisan warfare has crippled our political system resulting in a deep paralysis despite the threat of a collapse.

I call it sabotage, a tactic that goes way back and involves deliberate effort to insure that reforms are effectively undermined.


When the book came out, Publishers Weekly praised it and criticized it in the same breath, writing, “Frank paints a complex and conspiracy-ridden picture that illuminates the sinister and controversial practices of the Republican Party in the 20th and 21st centuries. While Frank's assessments and interpretations of key events, players and party doctrines is accurate and justifiable, his overwhelming blame of the Republican Party as the source of everything that's wrong with this county and as the emblem of self-destructing government denies the Democrats and the citizenry their roles in a decaying democracy”

How true! They didn’t quibble with his findings,  calling them “accurate and justifiable,” but also note that political labels are often poor guides to understanding how this game operates.

That’s because politics is no longer, if it ever was, a game played just by politicians. Politics is now an industry that plays itself out in an arena of the seen and unseen.

Today, the hatchets are out to torpedo needed financial reforms in a bill that has already been neutered and nit-picked, trimmed, sliced and diced by what’s called legislative compromise.

A Congressional style Seal Team Six has been assembled and is ready to pounce against the new enemy—financial reform. There is no corporate privilege or malevolent bank practice that the lobbyists will not defend in the name of fostering economic growth.

One juicy sex scandal involving one or more pols gets more ink than all the investigations of how special interests, well paid lobbyists, billionaire funders, think-tank gun-slingers and slippery lawyers for hire operate to serve the status quo and stop even mild reforms that might cost the industries they work for money or influence.  They are no reforms they won’t endlessly amend into oblivion.

First, they commission bogus and selective studies to “prove” why reforms need to be “reformed” their way. Then, with PR and complicit media, they orchestrate coverage to sell their policies. They start with something thing small like protections for debit cards and then escalate a full-scale war.

Thanks to the Democratic majority in the Senate, an attempt to delay rules governing what banks and credit card companies can charge for retailers to process cards was voted down, with the NY Times noting that this war will continue, “Even with the defeat, the vote represented a remarkable come-from-behind lobbying campaign by banks to recover from the drubbing they took during the anti-Wall Street atmosphere that pervaded last year.”

A day later, the knives were out for the new Consumer Protection bureau with a major campaign targeting Harvard Law Professor Elizabeth Warren who first proposed the agency and was considered the most qualified to lead it. She was then demonized by the industry and the right---and now the Obama Administration seems ready to abandon her, rather than fight for her.

Four years ago, the markets melted down sparking a global crisis.  The bailouts followed and a bank-led “recovery” helped many banks recover. Unemployment and foreclosures stayed high. Growth seized up. The crisis continues.

What to do?

There were several schools of thought.

The Administration locked itself into an alliance with Wall Street. They killed proposals for structural reform and restraints on private economic power. They are gambling on a turnaround—their version of faith-based politics—even as jobs are not coming back.

In short they have no answers and are not prepared to fight any messy battles with the real power structure. In the name of pragmatism, they are betrayed their own campaign compromises and tacked right to out Republican the Republicans.

They call it “triangulation.” Their critics call it a sell-out although, what’s left of the left was quickly left out.

The Republicans retreated into simplistic ideologies, blaming everything on Democrats and   government spending. They began fueling a scare about the deficit the way their predecessors raved against the Red Menace.

They have no answers either.

In the Congress, the wise men came up with a financial reform called Dodd-Frank, after stripping it of any radicalism, they offered up some pragmatic measures to increase regulation and try to force the finance industry to act responsibly with more transparency and accountability.  The bill explicitly rejected proposes for any and all international standards.

Dodd-Frank passed, but then the real bargaining began on what the new rules should be. The finance industry mounted a lobbying force of 25 high-powered lawyers and consultants for every member of Congress. The deliberations moved out of public view and into the corridors and closed clubs in Washington.

The predictable result has now surfaced in the New York Times:

“Nearly one year after Congress passed financial changes to rein in the banking sector, more than two dozen of the legislation’s rules are behind schedule, and no end to the wrangling over details is in sight.

The delays come as regulators extend public comment periods on the rules, and as some on Wall Street and in Congress resist the changes. One result may be that many new safeguards do not take hold in earnest before the next election, an outcome that could open the door for newly elected officials to back away from the overhaul.

The respected blog Naked Capitalism has followed this in excruciating detail

Concluded Richard Smith, a London based capital markets IT Specialist:

“So where does that leave us with our shadow banking reforms? Well, we have a modest tweak to bank capital requirements, of unknown efficacy. The mountain has labored, and brought forth a mouse.

Or you might prefer to pursue the anaconda/rabbit imagery to a physiologically realistic conclusion.”

(Translation: The snake swallowed the rabbit.)

Yves Smith, the editor of the blog is not surprised, suggesting this was the outcome that was always intended: To kill the bill by appearing to “strengthen” it.

So where are we? Nowhere, or perhaps it’s even worse than that. Many in the public backed the reforms including protections of consumers. They think it is being enacted.

When the next market crash occurs, as many insiders fear it will, they will realize how they were played, but then it will be too late.

Are we condemned for more of this rollercoaster ride to the apocalypse?

Smith seems disgusted, pointing out that even these tepid reforms emerged from a “weak analysis of the causes of the crash, some disjointed looking proposals, some mild BS. Kind of picking at the problem, with lobbyists at the ready.

But what is the result of nine months’ thought and some horse-trading with concerned Congressmen, juggling lobbyists and angry voters? “

What, indeed! We can see where all this is headed. We will find out soon enough if the predications of a possible “great, great depression” come to pass.

The problem is that while many see, the logic of an illogical system, so intricately sabotaged from within, it is set up to make almost impossible to stop the train wreck.

On this, the press is largely missing following the semen, not the money.

The astute economics editor of the Guardian, Larry Eliot sees only one possible way to stop this disaster in the making.

“Policy, as ever, is geared towards growth because the great existential fear of the Federal Reserve, the Treasury and whoever occupies the White House is a return to the 1930s. Back then; the economic malaise could be largely attributed to deflationary economic policies that deepened the recession caused by the popping of the 1920s share market bubble. The feeble response to today's growth medicine suggests the US is structurally far weaker than it was in the 1930s. (Emphasis mine)

To tackle these weaknesses it must break finance's stranglehold over the economy and boost ordinary families' spending power to cut their reliance on debt.

Can we break finance’s stranglehold over the economy if these issues displace the sex scandal of the week, as the real threat to our future. Can we identify and stop the saboteurs?

We keep reading about the Arab Spring, but not the American winter.

News Dissector Danny Schechters film and book Disinformation. For more information, Http://www.plunderhecrimeofourtime.com.

    News Dissector Danny Schechter has made a film and written a book on the “Crime Of Our Time.” (News Dissector.com/plunder.) Comments to dissector@mediachannel.org

    © 2011 Copyright Danny Schechter - All Rights Reserved
    Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in