Moon – you are absolutely right about the political donors hiding behind LLCs and corporations. However, even those must register with state and other authorities and leave a trail. Problem is that most people don’t take the time to do that research – until now. You would be amazed at what I’m digging up in public records. Anyway, I’m trained as an analyst and enjoy this sort of thing. Let’s hold off on that until we get closer to the election next year.

I remember days long ago in graduate school and elsewhere when Republicans and Democrats debated fervently over issues but in the end they remained friends and both tried to achieve what they considered best for the nation. They compromised to accomplish positive things. In grad school, there was a fellow who always took the liberal side of things and I was known as the conservative. We used to attract a crowd when we started discussing things, and others would chime in as well. In the end, we all had dinner, drinks or whatever and stayed friends no matter how much we disagreed. No enemies at the pub regardless of political persuasion!

Those were the days of Buckley and Galbraith, Reagan and O’Neill. What happened to us? Now the idea is to defeat the other party even if they are trying to do something you know is good. I miss the old times.

I very much support whatever Dodd gives us to strengthen consumer protection and to hold all financials institutions, banks and non-banks to a standard.

I don’t care who stops corruption, democrat or republican.

vpap is a good thing. Unfortunately people hide behind corporations and other such entities.

I suppose all I could think as I read your post is what on earth was the Supreme Court thinking. I believe things will get worse instead of better.

I just saw this. I don’t believe any of what I said was directed at you. We do disagree but I don’t believe there has been any fire, brimstone or gunfire involved.

What’s interesting and very telling (and don’t take this in a negative way) is that you admit that the central thesis is weak (alignment of wall street and main street) and then in the next few paragraphs you don’t really provide any support for how a fix would really fix anything. You even admit that it won’t really fix anything as the issue really boils down to politics and electing the right people to work the issue.

That’s one of the problems I have with Dodd or anyone else trying to ‘fix’ the fiscal issue that we have. There really isn’t a target other than ‘to fix the fiscal mess’ and when you get into the details they suddenly become very murky or scary. The idea of a Consumer Protection Agency scares the crap out of me. If it were not only to create policy but to enforce it; holy hell is that a bad idea. Could we really trust so few fingers in the pies of every American? Wow that’s amazingly scary.

I respect that you have a solid grasp of many diverse issues (you can look me up in VPAP! ) but I believe that atleast your arguement needs to be refined to win over skeptics. I don’t really trust the govt to fix this issue as when was the last time you saw the govt run a profit on anything.

A great deal of the financial regulation we had, for example Glass-Steagal as I described in the original post, was eliminated under Clinton and Bush. I don’t think that either of those Presidents took office with the intent of dismantling our financial regulatory structure. The problem is that both succumbed to the increasing influence of money and campaign contributions in our political system. Both paid homage to the purse-strings of big financial corporations. For example, Gramm-Leach-Bliley came about as a result of Sandy Weill’s lobbying and campaign contributions (to members of both parties) to allow him to combine Citicorp, Traveler’s and other financial companies into the monstrosity we know as Citigroup, which was one of the culprits in the recent financial collapse.

Solving the problem? How do we reform our political system to make our elected representatives accountable to us, the middle-class and majority of our electorate, rather than the big-money interests? For now, the best I can come up with is to watch carefully who is taking money from whom and vote out elected officials who betray us in the service of their paymasters. I’m open to your ideas and those of any other Americans who care about the direction this nation is going.

As an aside, the issue of money in politics is critical locally as well. One of my favorite web sites is http://www.vpap.org. I’m doing a lot of research there (and of other campaign finance filings) and of other sources, and will have a lot more to say about that as the 2011 BOCS election draws near.

Moral hazard is another vital issue also. I agree with the maxim that if an organization is too big to fail, it is also too big to exist. However, this gets us back to the problem of the influence of money in politics. For example, Citigroup should have never come into existence. Its component corporations should have remained separate entities. We’re back to the same problem. How can citizens make their elected officials responsive to them rather than people like Sandy Weill? Where is a trustbuster like Teddy Roosevelt when need him?

Will the interests of wall street ever align with those of the middle class? Will the legislation achieve that? You use that as the central thesis for your arguement so – how do you see us getting to that end-goal?

How do we manage the moral hazard of not allowing companies to fail and bailing them out with taxpayer funds?

Before we go any farther, however, let’s be clear that the debate over financial reform and enacting smart regulations is separate from the debate over health care. The two are completely different issues. You can oppose Obama’s health care plans and support consumer protection in financial services.

Let’s look at two examples. First, the proposed legislation attempts to require stockbrokers and insurance agents to act in the best interests of their clients. Many of them are good people who do that anyway. However, many do not. Most people would be surprised to learn that no such consumer protection exists now.

The Investment Advisors Act of 1940 includes a loophole that has never been fixed and provides only for a vague “suitability” requirement when brokers sell a financial product to a consumer. This language is so weak that brokers can only be brought to justice in the most egregious circumstances. The “suitability” requirement stands in stark contrast to the “fiduciary” requirement that applies to true financial advisors. A fiduciary is required to act in their clients’ best interests at all times, as is a lawyer, doctor or other professional a consumer might hire. Dodd’s bill would eliminate the distinction and apply the fiduciary standard to everyone offering financial advice and other services. Big firms such as Morgan Stanley Smith Barney and Merrill Lynch are adamantly opposing this legislation because it would increase their costs and make them liable when their “advisors” do not act in their clients’ best interests.

See the WP article at the following link http://www.washingtonpost.com/wp-dyn/content/article/2010/03/06/AR2010030602078.html. See also the testimony of the Financial Planning Coalition at this link http://www.cfp.net/downloads/Coalition_HFSC_Testimony.pdf

Second, among other things, the legislation would enact stronger protections for consumers against abuses by banks, credit card companies and other lenders. This industry is not a free market. It is composed of a small number of huge corporations that have the resources to lobby Congress to get their way. It is not competitive and competition alone will not solve these problems. Who has not suffered by abuses from these companies and how can anyone oppose sensible consumer protections?

Third, one of the most serious problems that not even the Dodd legislation addresses, is the combination of commercial banking and speculative finance under the same roof. After the financial market crash of 1929 and the early 30s, Congress passed the Glass-Steagall Act in 1933, along with Federal Deposit Insurance. This legislation prevented banks from taking our deposits to the casino, and created deposit insurance to revive confidence in the financial system.

In one of the worst pieces of legislation in history, Congress approved and President Clinton signed the bi-partisan Gramm-Leach-Bliley Act (GLBA) in 1999. GLBA effectively killed Glass-Steagal and allowed firms to engage in all sorts of financial activity, conservative and risky. The results of GLBA bore full fruit in our recent financial market collapse as the financial corporations took outlandish risks and lost. When their bets paid off, they pocketed the profits. When the whole house of cards starting falling apart in 2008, consumers and taxpayers paid the price. They claimed they were “too big to fail” and that we had to bail them out. Heads, they win. Tails, consumers and taxpayers lose.

We need urgently a reenactment of Glass-Steagall in some form. However, absolutely nothing has been done to stop the sort of risky behavior that was a major part of the recent collapse. Financial corporations, including banks, are still dealing in credit derivatives, hedge funds, and everything else that helped bring on the collapse. Their senior management is still taking home ridiculous compensation, paid for by their customers and stockholders. Politicians continue to receive huge contributions to keep the entire mess unchanged. This is not a free market and we are setting the stage for a repeat performance of the same crisis.

I’ve been a Republican my entire life and urge my fellow Republicans to get on board with sensible regulation and reform that works in the interests of middle-class America, investors and consumers.

And yeah, I know, if I don’t like it I can leave. Sounds like shades of other blogs.

That was when all I said was that I didn’t trust Dodd at this point.

What has Mr. Dodd stood for all these 36 years? He caroused with Kennedy in bars in the 1980′s including what sounded like some odd behavior involving a waitress. I will grant you I agree with him on some social issues and some I don’t.

But the things that had to do with Fannie Mae and Freddie Mac, the things about Countrywide and other banking issues do not engender my trust. And by the way, the NY Fed could have done more than just “you shouldn’t do that”. They either ignored or did not do what they were responsible in some ways.