Slick and oily—banks crush regulatory reform

While we helplessly await the verdict from Mother Nature on how many decades or centuries it will take to restore the Gulf of Mexico after BP’s assault on it, the news is not good in one area wholly under the control of human agency—the financial system—where the limp controls to be applied to the behemoths who destroyed 8 million jobs are being finalized.

‘Reconciliation’ is the process by which differing House and Senate versions are merged into one, and it is a lobbyist’s paradise as they can get their paid lackeys in Congress to slip in favorable language. But the raw material contained in the bills to rein in the big banks was never adequate, and the final result is likely to be more window-dressing than true protections against another collapse.

Despite the bizarre spectacle of Wall Street now getting pissed off at Obama, essentially for ruffling their feathers with no permanent impact, nothing coming out of the dysfunctional legislative branch will seriously impede the ongoing takeover of the commanding heights of the world economy by the parasitic banks.

It’s amazing how Obama and his party never miss an opportunity to bobble every powerful circumstance handed to them on a silver tray. What more propitious moment have we had in recent history to slap some serious restrictions on the cancerous banks and restore the role of finance to its rightful and boring role in support of business activity, instead of a giant gambling playground for the testosterone-impaired.

Reform of the deadly derivatives casino, spearheaded by the unlikely senator from Wal-Mart, Blanche Lincoln, refuses to die despite the indifference and lack of support from the White House, which saved its energy to block the Brown-Kaufman amendment that would have broken up the six biggest banks and then bragged about it.

Simon Johnson at The Baseline Scenario describes how Obama, while appearing less a handmaiden of Wall Street than his Republican predecessors, does their job, and some would argue, does it better for being less obvious:

‘Simply claiming that the president is “tough” on big banks simply will not wash. There are too many facts, too much accumulated evidence, pointing exactly the other way. The president signed off on the most generous and least conditional bailout in world financial history. This is now widely understood. The administration has scrambled to create some political cover in terms of “reform”—but the lack of substance here is already clear to people who follow it closely, and public perceptions will shift quickly’.