The Stench Of Funny Money
Politico’s Ben White gets his inner Matt Taibbi on and declares that voter don’t understand the nuances behind last week’s $2 billion Big Casino loss from Jaime Dimon and JP Morgan Chase (or the fact that Republicans in Congress fatally weakened the Dodd-Frank legislation), the only thing they understand is that it’s all President Obama’s fault.
Senior administration officials make a nuanced and largely credible case that they pushed for the toughest law they could get through Congress. They say the JPMorgan trades might not have happened if banks were not lobbying like crazy to water down financial reform. And they argue that higher capital requirements mean banks can better handle large losses such as those suffered by JPMorgan. If a giant bank fails now, they say, it will be liquidated without taxpayer support.
Obama campaign officials point out that their presidential opponent, Republican Mitt Romney, wants to get rid of the Dodd-Frank overhaul legislation entirely. They’ve also launched a new assault on Romney’s experience at Bain Capital Monday morning, attacking their opponent with a new ad and website for the job losses and profits he made as a venture capitalist.
But average voters don’t attend Commodities Futures Trading Commission hearings or read comment letters on complex proposals like the Volcker Rule provision in Dodd-Frank that is supposed to ban banks from making such huge bets. Instead, they open newspapers and turn on televisions and see what looks like 2008 all over again.
The irony is of course that the main tool for the President to make that very case is through our political media — of which Politico belongs to — and they’re basically saying “Too Long, Didn’t Read!” on that case. White has a point when he says that a hell of a lot more people need to be doing perp walks, starting with guys like Dimon, Citigroup CEO Vikram Pandit, former Bank of America CEO Ken Lewis, and the entire mortgage divisions of about a dozen major US banks.
But the bottom line is President Obama doesn’t create legislation, Congress does. And Repoublicans in Congress neutered Dodd-Frank into utter uselessness, then made it worse than useless by blocking the appointment of regulators (which could have kept an eye on Dimon’s little operation, for instance). It would be great if Congress had given these regulators the power to put these jagoffs in orange jumpsuits. They didn’t.
You want something stronger than Dodd-Frank that will put the bad guys in the dock? Better stop sending Republicans to Washington then, because they all work for the banking lobbyists.