Democrats in Washington, fresh from their conquest of the health industry, are now greedily eyeing another power grab on Wall Street. After all, why should they stop with just 17 percent of the economy?
At issue is legislation crafted by Rep. Barney Frank (D-Fannie Mae) and Sen. Chris Dodd (D-Countrywide) that would ramp up regulations of financial firms in an effort -- so Democrats claim -- to avoid a recurrence of the collapse and ensuing bailouts of 2008. The bill is scheduled for a first test vote Monday.
As The Wall Street Journal reports, "The legislation would grant the federal government the power to seize teetering financial giants and dismantle them the same way the Federal Deposit Insurance Corporation now can seize failing banks. It would create a new financial consumer regulator, would boost the strength and budget of the Securities and Exchange Commission [SEC] and would impose new transparency rules on the trading of derivatives, the complex financial instruments that helped bankrupt Lehman Brothers and nearly wipe out American International Group and Merrill Lynch."
On Thursday, Barack Obama, who has never held a real job, declared, "Now, there is a legitimate debate taking place about how best to ensure taxpayers are held harmless in this process. But what is not legitimate is to suggest that we're enabling or encouraging future taxpayer bailouts, as some have claimed. That may make for a good sound bite, but it's not factually accurate. In fact, the system as it stands is what led to a series of massive, costly taxpayer bailouts. Only with reform can we avoid a similar outcome in the future. A vote for reform is a vote to put a stop to taxpayer-funded bailouts. That's the truth."
On the contrary, Investor's Business Daily notes, "[T]he bill institutionalizes the doctrine of 'too big to fail,' a major reason why American taxpayers will be paying off the $700 billion TARP bailout fund for decades to come. Under Dodd's bill, every financial institution that might have a 'systemic' impact if it failed would be given the too-big-to-fail treatment. This is an invitation to bailouts without end."
The bailout trough would be filled with money from a new bank tax, which, in the end, would be paid by consumers.
In light of this regulatory effort, it's almost too obvious to point out the convenient timing of the SEC's mortgage-related fraud charges against financial giant Goldman Sachs -- charges leveled just as the Frank-n-Dodd monster bill was set to take the spotlight. Never let a crisis go to waste...
"The timing was perfect," said Sen. Dick Durbin (D-IL). "We're about to take up the financial regulatory reform bill. The banks are saying, 'Oh, this is totally unnecessary. We have everything worked out.' Now we find out the Securities and Exchange Commission has stepped up and charged Goldman Sachs, one of the biggest, with involvement in some trading that really turns out to be very suspicious." Barney Frank, chairman of the House Financial Services Committee, added that the fraud charge "reinforces the need for much of what we were doing."
Naturally, the White House and the SEC deny collusion, but the SEC commissioners brought the lawsuit on a 3-2 partisan vote, signaling that evidence may be thin.
None of this is to say that Wall Street is opposed to Democrat regulation. In fact, these crony "capitalists" are lobbying (and paying) to get the field tilted in their favor. As one candid financial services lobbyist put it, "Obtaining a carve-out isn't rocket science. Just give Chairman Dodd and Chuck Schumer a s---load of money."
Obama took $994,795 from Goldman for his 2008 campaign, as well as $701,290 from Citigroup, $695,132 from JP Morgan Chase, and $514,881 from Morgan Stanley. (John McCain's biggest donor among this Big Four was Citigroup, which gave him $322,051.) Obama has numerous other ties with Goldman. Also, while Goldman lawyers negotiated with the SEC, its Chief Executive, Lloyd Blankfein, visited the White House four times.
Thus, this financial "reform" bill is like every other big government power grab in the last two years. The goal is to further the Left's agenda, and to reward Democrat constituents, who, these days, include the very Wall Street "fat cats" that Obama has been cynically denouncing. Besides, the root of all these problems was, and is, government itself, starting with the subprime mortgage mess, and the subsequent collapse of Fannie Mae and Freddie Mac. Why are they not covered by this so-called reform?
If You Aren't Willing To Keep Fighting, You Need To Rethink Your Future! Call Your Senators And Representatives!!!