Can You Trust That Slimy Crew Around Obama To REALLY Take On Wall Street?

So many people-- and everywhere in the world-- had so much hope for Barack Obama, who, after all, had sold himself as the candidate of hope, not just here, but everywhere. Sharp observers, though, noted that his first high level appointment, sleazy political hack (and Wall Street insider) Rahm Emanuel as his Chief of Staff, could only result in a quick end to any hopes for change. He followed up with fellow Wall Street shills Lawrence Summers and Tim Geithner. Are they as bad as Republican appointments? Emanuel and Summers certainly are. Geithner's defenders call him a "technocrat" who isn't really corrupt. Thank Heaven for small favors-- even if the results are the same. Obama needs to shed this crap-- and fast-- if he's going to be able to start regaining any kind of political momentum and credibility.

Yesterday he came on all populist-- despite having ridden into the White House on $42,326,380 in campaign contributions (the most of any candidate in history) from the Finance/Insurance/Real Estate sector, which preferred him over McCain ($33,424,521) and Hillary Clinton ($29,787,616). Can we expect Obama and his Wall Street posse to act in the nation's best interests against the banksters when he's consumed with a tough re-election campaign and the money it will cost to run it? The NY Times, I think naively, holds out some promise he'll be listening to more Paul Volcker-- Elizabeth Warren would be even better-- and less Emanuel/Summers/Geithner.

The tougher approach to financial regulation that President Obama outlined on Thursday reflected a changed political climate, the rebound in big banks’ fortunes after their taxpayer bailout and a shift in power within the administration away from those who had been seen as most sympathetic to Wall Street.

In calling for new limits on the size of big banks and their ability to make risky bets, Mr. Obama was throwing a public punch at Wall Street for the third time in a week, underscoring the imperative for him and his party to strike a more populist tone, especially after the Republican victory Tuesday in the Massachusetts Senate race.

In announcing his proposals Thursday at the White House, Mr. Obama said if the financial industry wanted a fight over new restrictions, it was a fight he was ready to have.

I'll keep an open mind. Meanwhile, I'll be working to elect real progressives over reactionaries-- from either party. Obama may be standing in front of a mirror practicing looking and sounding like a populist, Blue America backed candidates like Marcy Winograd, Jennifer Brunner, Doug Tudor and Regina Thomas, to name a few, are populists... without prompting. It's in their DNA. And last night I got a note from the outsider Democratic candidate in North Carolina, Secretary of State Elaine Marshall, who's running against the hand-picked good old boy DSCC choice. Marshall's ideas for financial reform include ideas Obama would do well to take a look out from an outside the bubble perspective.

“As Secretary of State in North Carolina, one of my duties is overseeing investment securities in the state. We are responsible for protecting investors by investigating people who offer securities and the securities themselves. Unfortunately, in recent years, we have been busier than I would like to be.

“The uptick in the reports of fraud and scams corresponds with the deregulation of the financial industry, beginning in the late 1990s. While many of these problems have come from Madoff‐style Ponzi schemes orchestrated by scam artists, others have come from ostensibly reputable Wall Street firms misleading investors and misrepresenting products. In the past year, we have had to reach settlements with large national banks to recover $340 million for North Carolina consumers.

“The reckless behavior of these firms is indicative of the atmosphere that created the current financial crisis. The Wall Street bankers emphasized short‐term profits with little regard for the financial wellbeing of their investors and less regard for the truth. Unfortunately, after a year of multi‐billion dollar bailouts nationally and crackdowns locally, those bankers are still playing by the same rules.

“After receiving bailout funds, most Wall Street banks invested them for quick profits to pay off the debt instead of lending to businesses to help the overall economy. Now, Wall Streeters are patting themselves on the back with record bonuses once again.

“In this environment, Congress should be clamoring to enact common sense regulations that protect consumers and prevent the risky lending that brought the country to brink of economic collapse. However, the same forces that put so much energy into derailing healthcare reform are taking aim at financial reform. But now, it’s the financial lobby instead of the insurance lobby.

“It’s time for Washington to get some backbone and stand up for consumers, not powerful financial interests.

“First, Congress needs to protect consumers with a Consumer Financial Protection Agency. Currently, banks and financial institutions set the rules and parameters for financial products, often leaving buyers at the mercy of fine print and legal loopholes that benefit the companies. The new agency should add simplicity and transparency to financial transactions because consumers deserve to know the risks of purchasing a product.

“Second, we need to recoup the money we gave banks to keep them afloat and discourage them from taking such risks again. A tax on the mega‐banks would serve as a fee to cover their implicit designation of “too big to fail.” Revenue from the fee should go toward paying down the deficit, much of which has been accumulated because to the current financial situation.

“Which brings us to the third point of reform: No bank should be “too big to fail.” The designation gives the institutions a government safety net that, over time, may well encourage risky behavior. Re‐enacting the consumer protections that were stripped away with the repeal of the Depression Era Glass‐Steagall Act in 1999 would be a step in the right direction. The Act separated commercial and investment banks and insurance companies, and its repeal has been cited as one of the causes of current financial crisis.

“The financial industry will resist these and any other reforms with expensive ad campaigns and scare tactics. Congress needs show some leadership and do what’s best for the country not what’s best for the banks. They need to make my job a little easier by preventing frauds and scams through common sense regulations instead of leaving messes for my office to clean up.”

This morning Russ Feingold explained why he's voting against reconfirmation for Ben Bernanke as chairman of the Federal Reserve, something more and more senators are agreeing with:

“A chief responsibility of the Chairman of the Federal Reserve is to ensure a sound financial system. Under the watch of Ben Bernanke, the Federal Reserve permitted grossly irresponsible financial activities that led to the worst financial crisis since the Great Depression. Under Chairman Bernanke’s watch predatory mortgage lending flourished, and ‘too big to fail’ financial giants were permitted to engage in activities that put our nation’s economy at risk. And as it responds to the crisis it helped to usher in, the Federal Reserve under Chairman Bernanke’s leadership continues to resist appropriate efforts to review that response, how taxpayers’ money was being used, and whether it acted appropriately. When the full Senate considers his nomination, I will vote against another term for Chairman Bernanke.”