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WALL STREET VERSUS AMERICA – THE REGULATORY BATTLE

June 3, 2013

WALL STREET VERSUS AMERICA – THE REGULATORY BATTLE

Even the most benign government ever created is typically maligned by those within its reaches who disagree with its policies, edicts etc. You and I do not like to be told what we must do by someone else, especially if it costs money (see taxes, set-back building provisions for lots etc. – the list is endless). All of us have a streak of the libertarian Wild West in our makeup, some more than others. We do not necessarily disagree with bills and ordinances when presented or even after crafted into law; we save our venom for the day when such laws are to be implemented if they appear to be contrary either to our specific interests or to the interests of a group with which we are affiliated (e.g., a shareholder in a corporation where a statute or an amendment to one threatens to increase the corporation’s taxes, remove its loopholes or is otherwise perceived to be aimed against “the free market” or “business” or some other such cover for a continuation of the status quo –  a status quo the statute was designed to change – presumably for the greater good). We have several weapons at our disposal:  judicial intervention, threats to politicians etc. Those socialists aren’t going to tell us what we must do. . . .

Broad-based statutes borne out of a need for reform of large interest groups are rarely sufficient unto themselves. With congressional approval and the president’s signature, the fun has just begun. Such Acts have to be fleshed out into everyday dos and don’ts and other such procedural requirements in order to reflect congressional intent, so the particular agency charged with regulation under such legislation holds hearings and invites those interested and/or affected by the Act’s provisions as fleshed out into rules and regulations to testify, submit memoranda etc. So far, so good; the democratic process is alive and well. After everyone has had a say, the rules and regulations are adopted in final form.

Then came Dodd-Frank, a law purporting to regulate an arrogant and libertarian Wall Street, a Wall Street just fresh from a credit derivative crapshoot that brought the world to a near depression (and a bailout from you and me). If there ever was an industry that demonstrably needed regulation (with our survival as a nation at stake), it was the financial sector.

With Clinton’s earlier and catastrophic signature on the repeal of Glass-Steagall (the Depression era law that segregated commercial from investment banking) on the advice of Greenspan and Rubin and other Wall Street denizens past and present), the stage was set for universal disaster, and it was narrowly averted. Dodd-Frank, among other things, was designed to end such exposure to disaster for America. No longer were we to be exposed to a depression, especially with Wall Street’s unfettered use of federally-insured funds. The so-called Volcker Rule was under discussion. The stage was set for reform.

That was three years ago and the rules and regulations fleshing out Dodd-Frank are less than half completed. Why? Why can such an important piece of legislation still be left unimposed on a sector that needs such imposition so badly that (literally) our survival as a viable nation state is at risk in the absence of its imposition? Why and how can Wall Street lobbyists defeat the will of the people as expressed through their elected representatives and leave us vulnerable and at the mercy of Wall Street operatives? Could it be a billion dollars worth of Wall Street lobbying designed to hold up imposition of rules and regulations necessary to the imposition of Dodd-Frank? Are two and two four?

It is the right of any and all who are or may be affected by the adoption of rules and regulations fleshing out statutes to be heard concerning such proposals, and that includes Wall Street. The financial sector is certainly affected by any such proposed rules and regulations under Dodd-Frank and it has a right to be represented and its views known to the regulators-in-waiting, but FOREVER? When does honest appraisal of a statute and its everyday application to the industry to be regulated morph into stalling and delay rather than an honest attempt to fashion rules and regulations that fit congressional intent?

A billion dollars will buy a lot of lobbying, and K Street has to be happy with Wall Street’s largesse. K Street has done a good job; after some three years the rules and regulations proposed under Dodd-Frank are less than half done. We have passed a law, but its effective date (as measured by the adoption of final rules and regulations) is unknown. If this were a legislative act renaming a post office, that would be one thing; but this is an Act that treats a disease that could bring America down. The tail is wagging the dog – Wall Street is running the show and America is a mere spectator. This has to end.

Where is the president in this Wall Street versus America brawl? It appears he is on the side of Wall Street. If not, then why isn’t he cracking the regulatory whip on all concerned to bring adoption of rules and regulations under Dodd-Frank to a conclusion? Are the press corps and other political lackeys going to tell us that he has more pressing problems, like Iran, IRS perfidies etc.?

I have a different view. Syria, Lebanon, Iran and Netanyahu’s mid-eastern adventures will not bring America down. The mess Dodd-Frank proposes to correct WILL OR CAN bring us down, and with our own money! Yet we sleep on obliviously, our fears corralled by Dow and S & P averages on the (Wall Street controlled) business pages and TV and the Fed’s pumping money into bulwarking stock and debt markets (though ostensibly to “fight unemployment”). (I note here in passing that the Dow is at historic highs and that employment is not – so just who is being helped by such pretended policy objectives?)

First things first. We have a common cold in the Mideast and a raging cancer on Wall Street. Which shall we treat first? The aspirin proposed by Wall Street lobbyists won’t get it – we need serious treatment. As things stand today (a status quo which Wall Street approves), we are at risk for more bailouts and world-wide depression and the civil unrest and commotion and fallen regimes that go with it.

I say that that is an emergency. I say that we need to draw a timeline on final adoption of rules and regulations under Dodd-Frank. I say that further delay by Wall Street lobbyists represents a threat to the continuing existence of America as we know it, one in which the financial sector has effectively taken control of not just our money and other resources, but of the mores and institutions of the country itself, since we as a society seem to “follow the money” and be in thrall to those who have acquired much as opposed to a love of country and its fellow citizens expressed in the common good.

What is a concerned citizen to do about this potential for collapse? Call your senators and representatives? At a minimum. Letters to the White House and the would-be regulating agency are also in order as well as letters to the editor to newspapers and magazines and internet sites. Why go to all that trouble? Because every American has a big stake in the outcome of this under-publicized battle for economic and political supremacy in this country and (given the globalization of capital) the world. You have a choice: an institutional perpetuation of greed, or a democracy. I have made my choice. GERALD E

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