Robert Reich: Who needs Republicans when Wall Street has the Democrats?

[marmar]

Why Democrats Can’t be Trusted to Control Wall Street
Friday, May 24, 2013


Who needs Republicans when Wall Street has the Democrats? With the help of congressional Democrats, the Street is rolling back financial reforms enacted after its near meltdown.

According to the New York Times, a bill that’s already moved through the House Financial Services Committee, allowing more of the very kind of derivatives trading (bets on bets) that got the Street into trouble, was drafted by Citigroup — whose recommended language was copied nearly word for word in 70 lines of the 85-line bill.

Where were House Democrats? Right behind it. Rep. Sean Patrick Maloney, Democrat of New York, a major recipient of the Street’s political largesse, co-sponsored it. Most of the Democrats on the Committee, also receiving generous donations from the big banks, voted for it. Rep. Jim Himes, another proponent of the bill and a former banker at Goldman Sachs, now leads the Democrat’s fund-raising effort in the House.

Bob Rubin – co-chair of Goldman before he joined the Clinton White House, and chair of Citigroup’s management committee after he left it – is still influential in the Party, and his protégés are all over the Obama administration. I like Bob personally but I battled his Street-centric views the whole time I served, and soon after I left the administration he persuaded Clinton to support a repeal of the Glass-Steagall Act. .......................(more)

The complete piece is at: http://robertreich.org/post/51226404952

[closeupready]

1. Bill Clinton to Reich: "I don't need a Republican Labor Secretary; I've got you!"

[Octafish]

33. No. Reich makes clear he's a Democrat.

The guy wants to use the powers of government to make life better for ALL Americans, not just the rich and their corporations.

[closeupready]

35. You're a day late and a dollar short, kid.

I think you are the only one in this thread to not get the joke, which is actually pointing out that when it comes to compromising integrity as a Democrat and friend of working people, Reich wrote the book on that when he served Bill Clinton as his labor secretary.

And then he has the audacity to accuse Democrats today of being compromised when he has NEVER admitted that he was wrong about NAFTA, which was probably the most damaging piece of legislation that ever happened to unions.

[Octafish]

36. Thanks for setting me straight on Reich and NAFTA. I thought the topic was Wall Street.

Either way, the rich and their toadies in Washington work to shaft Democrats, working people, the middle class, the poor...

As for being late to the party, I brought up who was responsible and who should pay back the loot in the crisis of 2008. That's when, instead, the Congress and Executive got the taxpayers on the hook for instead of the banksters.

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4055207

The new regulations that are being watered down that Reich is talking about will set th stage for the next round of taxpayer financed bailouts.

Sorry I don't get the joke.

[closeupready]

37. No problem.

You are entitled to have your own opinions about Reich and NAFTA and the price of tea in China.

As for me, I do not respect Reich because he does not respect unions or American workers. Yet here he is, posing as some kind of liberal vanguard who wants to sound the alarm, which I think is the very definition of chutzpah, considering his own history.

I'm done here. Cheers.

[4Q2u2]

2. Pritzker

Look how she was just soft balled in her House hearing. No one even remotely fighting for the "People". This will be a flat out pass here by the Congress to represent us. An anti-union, Sub Prime Mogul and Offshore darling Democrat. How can there even be one, let alone nominate them for anything above Dog Catcher. That she job she did on the Chicago Schools will be taught in all the best Universities on how to boost Charter schools.

[Lasher]

3. He's right.

We didn't learn from the S&L crisis, and we haven't learned from the Great Recession.

[Populist_Prole]

4. Well Reich too has his own skeletons IMO

At least Paul Krugman did a 180 on trade/free-trade and walks the walk now. Reich has always been a avid 3rd-wayer in his views on free-trade/globalism and such. I mean, in the long view, his heart was/is in the right place, but his basic view seems to be that the best way to help the working class and poor is by compensating them on their losses from offshoring through redistribution. That's just too technocratic in that he still can't face facts that trade policy has caused the marginalization of the working class and poor, regardless of how good it can be in a perfect world of economic textbooks.

[closeupready]

6. Perhaps his biggest failing is his inability to say, "I was wrong."

If he could do that on NAFTA and 'free trade' (which is really anti-union trade agreements), then maybe I'd listen to him. He certainly seems to miss the spotlight and respect he enjoyed in the 90's.

But how can people take him seriously if he can't do something as simple as admit that he was wrong about something? Being 100% serious here, he can't do it because he's either really arrogant, or else he still believes what he believed back then (and if so, then he's even more incompetent as a liberal/progressive than I'm giving him credit for).

[Populist_Prole]

7. IMO, that inability is not due to arrogance but to extreme wonkishness on his part

I mean, he is "right", but only in a perfect world. His general egg-headedness is so inveterate that he can't see the futility of getting the 1 percent to pony up to compensate the losers of free trade. They are no more willing to do that than they are willing to give up on the bonaza they reap via labor arbitrage. He may yet get sense knocked into him, alas it'll be a day late and a dollar short.

"In the long run, wer're all dead"

[closeupready]

8. Yeah, that's likely the case. But then again, I'd suggest that

this inability to recognize reality as it is (rather than reality as textbooks or theories claim it SHOULD be) compromises his authority as Someone With Solutions. After all, everyone from Ayn Rand to Ratzinger claimed to have all the answers. Heck, our kids have all the answers. And we see how well their answers work in reality.

Cheers.

[byeya]

12. How can anyone "like" Robert Rubin? Reich had his chance, followed orders, did a little good

but in the end sided with the offshorers and not with the wage earners.

[rhett o rick]

17. So you dont like Reich? What about what he says per this OP? nm

[hay rick]

18. You didn't get the shoot the messenger memo.

Evidently we can't discuss Dems cozying up to Wall Street.

[Populist_Prole]

22. I don't _dislike_ him, I just can't take him seriously

And as such, and to the OP and what he says, it's irrelevant IMO. I don't disagree with his issues in the OP, in fact I strongly agree with them, but it's small potatoes compared to the real issue: The marginalization of the working class due to offshoring. He ( and other 3rd-wayers ) can exhort us all to bail water faster and faster and faster, but fix the damn hole in the boat first. Then we can tweak and fine tune things.

[ProSense]

5. Elizabeth Warren Slams ‘Dangerous’ Legislation That Would Weaken Wall Street Reform

Elizabeth Warren Slams ‘Dangerous’ Legislation That Would Weaken Wall Street Reform

By Travis Waldron

A week after a bipartisan group of lawmakers on the House Financial Services Committee overwhelmingly approved a rollback of certain financial reforms contained in the Dodd-Frank Wall Street Reform Act, one of the Senate’s biggest consumer advocates is pushing back.

Massachusetts Sen. Elizabeth Warren (D) came out swinging against the repeal of new rules meant to regulate derivatives, the complex financial instruments that were at “the center of the storm” that caused the financial crisis. The rules shouldn’t be weakened or repealed just because big banks want to see them eliminated, Warren argued Thursday, The Hill reports:

“The big banks won some battles and lost some battles during the financial regulatory debate in 2009 and 2010, but their tune never changed and their lobbying never let up,” she said. “It is dangerous for Congress to amend the derivatives provisions of the Dodd-Frank Act without at the same time taking accompanying steps to strengthen reform and maintain the law’s equilibrium.”

One rule the package of legislation advanced by the House committee would eliminate is a “push out” provision that would limit derivatives trading at banks that receive federal backing. Similar to the Volcker Rule, another provision Wall Street largely opposes, it is aimed at making taxpayer-backed banks safer to avoid crises similar to the one that thrust the United States into a recession and led to a bailout of major banks in 2008.

Warren isn’t alone in her opposition to the rollback. The Obama administration has long opposed the repeal of the derivatives rules, and former Federal Deposit Insurance Commission chair Sheila Bair has said the swaps and derivatives rules need to be strengthened rather than weakened. Whether the rules will face a repeal vote in the Senate isn’t clear: the House passed similar legislation in 2012, only to see it die in the Senate without a vote.

http://thinkprogress.org/economy/2013/05/17/2029651/elizabeth-warren-slams-dangerous-legislation-that-would-weaken-wall-street-reform/

The House bill has a Senate counterpart.

Senators want exemption to Dodd-Frank swap rules

By Douwe Miedema and Sarah N. Lynch

WASHINGTON (Reuters) - A bipartisan group of 12 senators is seeking to exempt non-financial companies from new rules to make banking safer, breathing new life into efforts to reduce the scope of the Dodd-Frank overhaul of Wall Street.

The plans are squarely at odds with a warning from Treasury Secretary Jack Lew, who urged the Republican-controlled House of Representatives this week not to make any changes to the broad law drawn up after the 2007-09 credit meltdown.

"These reforms should not be weakened or repealed," Lew said in a letter to Representative Jeb Hensarling, chairman of the House Committee on Financial Services, referring to a raft of bills the panel has since adopted.

Now two senators have introduced a proposal to exempt companies using derivatives to protect against losses - and not to speculate on markets - from rules that would require them to pay high safety margins.

- more -

http://www.reuters.com/article/2013/05/08/us-swap-rules-senate-idUSBRE94716P20130508

Senators Introduce Bipartisan Legislation to Help Ag Producers, Small Businesses Manage Their Risk

(U.S. SENATE) - U.S. Senators Mike Johanns (R-Neb.) and Jon Tester (D-Mont.) are leading a bipartisan group of Senators in introducing a bill to clarify the exemption for farmers, ranchers, manufacturers and small businesses from margin requirements included in the Dodd-Frank financial legislation. These exempted groups, known as end-users, use derivatives to manage their risk and insure against extreme price fluctuations for commodities and inputs - like seed and fertilizer - critical to their business operations.

Joining Johanns and Tester to introduce the bill are Senators Roy Blunt (R-Mo.), Mike Crapo (R-Idaho), Joe Donnelly (D-Ind.), Kay Hagan (D-N.C.), Heidi Heitkamp (D-N.D.), Amy Klobuchar (D-Minn.), Jerry Moran (R-Kan.), Richard Shelby (R-Ala.), Pat Toomey (R-Pa.), and Mark Warner (D-Va.).

The bill introduced by the senators is identical to H.R. 634, which today unanimously passed the House of Representatives' Financial Services Committee. It clarifies current law by making explicit that commercial end-users are not subject to costly margin requirements, consistent with Congress' intent in Dodd-Frank.

- more -

http://www.tester.senate.gov/?p=press_release&id=2889

[AnotherMcIntosh]

9. Robert Reich would have more credibility if he would publicly come out in opposition to NAFTA.

[rhett o rick]

19. We get it that you dont like Reich. What do you think of the OP? nm

[AnotherMcIntosh]

23. Reich is right. But, IMO, he would have more credibility if he would now publicly oppose NAFTA.

I am far from saying that he is a hyprocrate, although I wish that he had not been a NAFTA cheerleader.

The fact that Congressional Democrats are acting on behalf of Wall Street and pushing back the modest reforms needs to be said. And certainly Reich has more standing than the average citizen. Good for him. But unlike Bill Clinton who admitted in his autobiography that he was wrong re the AWB, Reich - I believe - has never admitted that he was wrong on NAFTA. Sending jobs to foreign countries is still destroying this country and Reich might do us all some good if this former proponent would admit that.

When you say, "We get it that you dont like Reich," no you don't. It's not that I dislike Reich. It is that I dislike what NAFTA has done to this country. If, by some remote chance that he reads DU, maybe he would speak up and influence some corporate leaders who could be in a position to do something about it.

[bhikkhu]

26. Economists like trade

...and much of what "NAFTA has done to this country" is actually what technology and automation has done to this country. Which is eliminated jobs and reduced costs. Not to be an apologist for economists, as I think they are all basically wrong in their calculations when it comes to resource depletion, and climate change is much more important in the long run than GDP growth...but they do favor trade as a basic economic stimulus.

In any case, according to this (and there have been various studies arriving at various similar numbers) http://sent2null.blogspot.com/2011/09/us-job-losses-automation-is-culprit-not.html about 88% of job losses in the relevant time period were the replacement of people by machines. About 12% was outsourcing.

Both lead to people without incomes, of course. The second one is easy - you just have to close the borders, wave the flag and hate foreigners. Everybody knows how to do that. The first one though, which has made by far the biggest impact, I've not heard any very good suggestions about what to do. My own suggestion to my kids is to make sure they take school seriously, as it is one big competitive world lately.

[AnotherMcIntosh]

27. Your suggestion is to take school seriously?

The the idea of getting a education was a good suggestion for many since the 1600's. The Quakers may have started that. The relatively recent idea of getting a college degree (and even more recent idea of equating a degree with education) has also worked for many.

But now, just as no one thought that we would see a housing bubble, we are now seeing a college-degree bubble.

Here's one source:


It's still a good idea to get an education and learn from experiences, but it is a mistake to overlook the bubble.

You sound like you appreciate studies and numbers. However, you are wrong is saying "The second one is easy - you just have to close the borders, wave the flag and hate foreigners." You make it sound like everyone who doesn't accept your let's-do-nothing position is a jingoistic bigot. You say, "hate foreigners." That's not a solution. That's just a strawman for those who engage in dichotomized thinking and will not seriously consider alternative solutions. It is far from a serious position when you and others want to avoid "hating foreigners" but will buy clothing from corporations who exploit destitute children making gym shoes, i-pads, and clothing in places like Bangladesh.

[duffyduff]

31. Baloney. Automation has NOTHING to do with this. This is more globalist propaganda.

We have Washington policies that have directly destroyed this economy in order to enrich the few.

Stop with peddling discredited and debunked garbage.

[bhikkhu]

32. How dicredited and debunked?

Manufacturing jobs have been in decline for over a century. The "march of progress" has been led by technological advances, automation, and computerization. For the most part this involves replacing human labor. This has accelerated over the last couple of decades.

I'm not saying that there have been no job losses due to globalization and outsourcing, but that those losses are a small percentage (about 10-15%) of the total job losses. If that's been "debunked" somewhere, please point me to the research or the data.

[Dragonfli]

21. Who needed Reagan when Wall St had Clinton? He supported as bad back then, I agree, but

I hope this is more a reflection of learning hard lessons from his past mistakes rather than hypocrisy, but who knows anymore. I agree with the points he made here, can only guess about sincerity and am merely grateful he raised them.

[AnotherMcIntosh]

24. I'm glad that he is raising the points. I would also be happy if he would take a stand against NAFTA

[Dragonfli]

25. He owes us that much at the very least, it would also add to whatever credibility

he may have left from those dark times when our party joined the corporate first gang.

There are modern trade agreements already signed that are just as bad, and worse ones all but guaranteed a signing after closed negotiations are completed.

I would also like to see an apology from Bob Rubin, Lawrence Summers and Bill Clinton for their part in deregulation that led to the recent financial collapse, So far, they are covered in teflon by those that like more Goldman Sachs Alumni in the current administration.

http://www.motherjones.com/politics/1999/11/robert-rubin-rewrites-rules

[pansypoo53219]

10. democrats sold their soul for a seat a the table under voodoo economics.

plus wall street BOUGHT them.

[xchrom]

11. Du rec. Nt

[merrily]

13. The Robert Reich who worked for Clinton? That Reich?

[rhett o rick]

20. Do you disagree with the OP or not? nm

[msongs]

14. attack the messenger and ignore the content. bush policies under new management nt

[ProSense]

15. Another

"attack the messenger and ignore the content. bush policies under new management"

...one-liner FAIL. The first line of the OP:

Who needs Republicans when Wall Street has the Democrats? With the help of congressional Democrats, the Street is rolling back financial reforms enacted after its near meltdown.

Guess who implemented those "financial reforms"?

Hint it wasn't Bush: http://www.democraticunderground.com/?com=view_post&forum=1002&pid=2896060

[Cleita]

16. K&R

[tomp]

28. well, to actually answer his question (though it should be obvious)...

....(and may even be being implied)--the powers-that-be need the republicans AND the democrats. without each party blaming the other, the people would understand there is really only one party. the role of the democrats is to make the people think they have a friend in government, that there is a balance to the openly reactionary republicans. THAT is american politics in a nutshell. neither party serves the vast majority of americans. the whole game is to cover that up. this is why true progressives need to break from the democratic party--to show the country the difference.

[markiv]

29. he's right on this one, but he's a hypocrite

with a notorious history of being both for and against labor

[gulliver]

30. Fight it in Republicans and it will disappear from Democrats

Attacking Democrats for "non-Progressive" behavior is pointless and stupid. All it does is set us back. Reich has to put food on the table, so every once in a while he chooses a title and subject that appeals to simplistic "hit bad thing with stick and make go away" types. That's what this article is.

[Octafish]

34. Corruption I mean De-Regulation is Buy-Partisan

What Reich wants to make clear is who will pick up the tab for the next wave of Banksters: We the People.

[limpyhobbler]

38. K&R nt