Will Obama's Quest For Illusory Bipartisanship Manage To Screw Up Financial Services Reform As badly As Healthcare Reform?

When I woke up yesterday, the first thing I heard was someone on CNN babbling about how a former Obama political advisor was predicting the Democrats would be slaughtered in November. It was Steve Hildebrand, and here's the quote:

I think that there is a real shot we [Democrats] are going to get slaughtered in elections this fall if we aren't leading the efforts to reform Washington. We campaigned in '06 and '08, and if voters don't see that change, we haven't lived up to that promise.

Sounds reasonable. The healthcare reform bill is a guaranteed disaster because Obama-- so pointlessly eager for a bipartisan patina on the legislation-- compromised away everything that would have made it worth fighting for. You have a raging religious fanatic, Bart Stupak, sensing weakness and deciding to use the nation's healthcare as an opportunity to turn back the clock on women's choice. [Please support his primary opponent, Connie Saltonstall.] And now you have progressives (like Mike Capuano and Hispanic members, for example), who have been made to eat shit all through this whole repulsive process, ready to just say no (along with lobbyist-owned Democrats, like Suzanne Kosmas and John Adler, and natural-born reactionaries, i.e., Blue Dogs).

But healthcare reform isn't the only desperately needed reform that Obama's incompetent team has bungled. We might as well have had the GOP in charge for all that's been accomplished-- next to nothing substantive-- on reining in Wall Street. If there's one thing people hate as much as the Inside the Beltway crowd, it's the Wall Street crowd. And there's plenty-- even short of setting up a guillotine on the corner of Wall and Broad-- that could have been done.

Obviously this can't all be blamed on Obama. The massive endemic corruption of our campaign financing system makes it next to impossible for cowardly career politicians to take on the banksters-- not that the Republicans or Blue Dogs even want to, since their entire philosophy of conservative governance is that our "betters" (rich people) should be calling the shots.

Again, Obama and the Democrats were so eager to work with their sworn enemies-- and, more important, the sworn enemies of reform-- in making it look like they were crafting a bipartisan bill that the whole effort was doomed from the git-go. The conservatives in the Senate, and their masters in the banks, would never agree to anything that would shave a dime off their ill-gotten gains. Yesterday, even financial industry dupe, Chris Dodd, chair of the Banking Committee, finally gave up working with the saboteurs. Supposedly he'll be presenting a bill-- one in which he'll just compromise and water down himself-- on Monday without any further input from foot-dragging Corky (R-TN) who had replaced knuckle-dragging Shelby as the GOP "negotiator." Will there even be a much-needed independent consumer protection agency?

Dodd said he is concerned that the chance for reform will dwindle as memories fade of the near-meltdown of the financial system in 2008... The main sticking point has been the Obama administration's controversial proposal to create an independent consumer protection agency. Republicans have opposed the measure and the financial industry has lobbied furiously against such an agency.

Democrats appear to have relented in an effort to win bipartisan support for the agency. The latest proposal would place the agency within the Federal Reserve, as long as it is given an independent head, independent funding, and rule-making and enforcement powers.

Other elements that appear likely to be included in Dodd's reform bill will be giving the government so-called "resolution authority," the power to wind down large failing firms in an effort to avoid a repeat of the "too big to fail" problems that led to the government's massive bailout of major Wall Street banks.

Dodd is also set to propose a systemic risk council, chaired by the Treasury Secretary, to monitor the nation's economy for possible threats to its stability. The oversight of the nation's biggest banks with assets of more than $100 billion appears likely to remain with the Federal Reserve.

Another element of the reform movement will be an effort to monitor the over-the-counter derivatives market, including the credit-default swaps that played such a pivotal role in the downfall of insurance giant AIG.