Despite what you may have read, seen or heard in the MSM, or from members of the Senate and administration, the Restoring American Financial Stability Act, designed to regulate the worst abuses and crimes committed on Wall Street that led to the Great Recession, is a gutted, toothless, spineless piece of legislation, masking as something entirely different. Don't believe me? Check out the latest from Matt Taibbi in Rolling Stone.
On the plus side, the bill will rein in some forms of predatory lending, and contains a historic decision to audit the Fed.It should be noted, however, that the audit is a one-off, dealing only with the years 2008 to the present, and at the completion of the audit, the books are to be sealed again from public scrutiny forever.
But the larger, more important stuff – breaking up banks that grow Too Big to Fail, requiring financial giants to pay upfront for their own bailouts, forcing the derivatives market into the light of day – probably won't happen in any meaningful way. The Senate is designed to function as a kind of ongoing negotiation between public sentiment and large financial interests, an endless tug of war in which senators maneuver to strike a delicate mathematical balance between votes and access to campaign cash.Taibbi's expose is another astonishing, inside look at how the crimes on Wall Street continue to go unpunished, and how the Street itself continues to dictate to the politicians in D.C. exactly what it will and won't stand for.
The problem is that sometimes, when things get really broken, the very concept of a middle ground between real people and corrupt special interests becomes a grotesque fallacy. In times like this, we need our politicians not to bridge a gap but to choose sides and fight. In this historic battle over finance reform, when we had a once-in-a-generation chance to halt the worst abuses on Wall Street, many senators made the right choice. In the end, however, the ones who mattered most picked wrong – and a war that once looked winnable will continue to drag on for years, creating more havoc and destroying more lives before it is over.
As Taibbi notes, when such divergent groups as the Huffington Post readers and the Tea Party activists are all in bed together, desiring real financial, regulatory reform, the only people not for it are on Wall Street.
And the "great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money" that is Wall Street, is winning the war.