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Financial “Reform”: Just Like Health Insurance “Reform”

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Democrats are on pace to waste on of the largest one-party majorities in history.  Given the size of the caucus in each chamber of Congress, most Americans assumed that something would be done to address the multiple crises this country faces.  You do know what happens when people assume things, don’t you?  It turns out that old adage was true.  Great and needed reforms have not been the products of this Congress.  Edge-nibbling and incrementalism have been the products instead.

Financial industry reform was supposed to be the next great thing that Congress took up.  It’s desperately needed: thanks to a bunch of billionaires, Wall St. has turned into America’s largest set of casinos.  Unlike the ones found in Las Vegas, these casinos are unregulated and have a more direct impact on Americans’ lives.  Witness the 2008-2010 Great Depression redux if you want an idea of how out of control these banksters have gotten.

I recommend reading a short piece by Les Leopold.  He starts out with (emphasis mine):

Wake up Congress! The financial reform bill you just passed won’t protect us from economic chaos. Why? Because it fails to burst the mother of all bubbles — Wall Street itself.

Despite that simple fact, Americans will start being subjected to pandering politicians selling their “look what we accomplished” bs.  How many will be reelected?  Or, how many will fall to the wave that I see building during this year’s election cycle: Americans want tangible solutions passed.  Politicians might get away for a short while telling us how awesome they are.  What happens when the economy crashes again?  What happens when people realize how little health care insurance legislation accomplishes for them and how much it accomplishes for the failed system?

After a short discussion, Les offers up 5 necessary reforms:

1. Break up the top twenty banks that are too big too fail.

2. Institute a financial transaction tax.

3. Pass a windfall profit tax of 75 percent on Wall Street bonuses and hedge fund income.

4. Raise the marginal tax rate on those earning $3 million or more per year to 70 percent.

5. Ban the sale of complex derivatives to all public entities and pension funds and ban public and pension investments in hedge funds.

To do any of these, however, would require elected officials that have not been thoroughly bought off by the financial industry.  That’s one reason we’re in the mess we’re in.

Those large majorities I started out with won’t last forever.  Congress members are going to want to travel back to their districts and states in a couple of months – which means the time for actual work to get done is quickly dwindling.  What will happen next year when there are even fewer Democrats?  How long will it take to get a meaningful number of solid progressives in place to exert influence?

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