Americans For Financial Reform

In April 2009, President Obama delivered a speech in which he referred to the Sermon on the Mount to explain the stronger, more just economy he envisioned: “We can’t rebuild this economy on the same pile of sand,” he said. “We must build our house upon a rock.”However the regulatory reforms he presented don’t fully conform to those elegant words. In fact, columnist Joe Nocera accurately described President Obama’s new strategy in the New York Times yesterday: “The Obama plan is little more than an attempt to stick some new regulatory fingers into a very leaky financial dam rather than rebuild the dam itself…. Everywhere you look in the plan, you see the same thing: additional regulation on the margin, but nothing that amounts to a true overhaul.” But, at a time when we’re hard money lenders living amid the blowback of an overgrown financial sector that did much more harm than great, and we’ve seen the failure of a entire model of banking — the Administration has provided some useful reforms. Most promising will be the creation of a Consumer Finance Protection Agency– the brainchild of Elizabeth Warren. But we do not see the type of real revamping that is sorely needed. What we really need now — as Obama himself indicated in April — is a new foundation for a brand new economy. That indicates ensuring — through difficult regulatory reforms that Nocera pointed out would “make some bankers mad” — that we have a monetary sector that’s more responsive to the public interest and the real economy; that is a servant, not master, in the people. That is why it’s so vital that a brand new national coalition of almost 200 state and nearby microdermabrasion machines organizations ranging from financial specialists to community advocates announced its formation this week. Americans for Financial Reform is committed to operating for reforms “that keep people in their homes and prompt smart investment in communities and businesses that create good jobs and strong neighborhoods.” “For too long the big banks have been making their own rules and gambling with your money,” campaign director Heather Booth said. “We’ve come together today to tell them those days are over. The excesses of Wall Street have spilled over into our communities and now our communities are going to take on the fight for real financial reform.” This coalition is impressive — far too numerous powerful groups to name here — it is also timely and critical. At greatest, the prospects for meaningful reform are uncertain, as evident in Senator Dick Durbin’s recent description of Congress: “The banks are the most powerful lobby on Capitol Hill…and frankly they own the place.” Indeed too many banker fingerprints are on the Administration’s new strategy also. Rather than breaking up banks that location our economy at risk by becoming “too large to fail”, those institutions merely get a new name and promises of much more regulation as “Tier 1 Financial Holding Companies”. (Contrast that with Senator Bernie Sanders’ refrain: “If you’re too big to fail, you’re too big to exist.”) Customized derivatives of the AIG selection — which wreaked such havoc all over the globe — will nonetheless be permitted and will nonetheless be challenging to regulate. Lastly, too much energy is centralized within metal detector the Federal Reserve in spite of its recent failures and coziness with the monetary sector it is supposed to watch. As The Nation’s John Nichols wrote, “The Fed is famously unaccountable and resistant to transparency…. What should be obvious to everyone is that Congress needs to get a grip on the Fed — which is structured in a manner so that it faces little or no congressional oversight — before it allows Obama’s proposal to advance.” The banking lobbyists are already lining as much as put the kibosh on the great Consumer Finance Protection Agency proposal with silly proclamations in the exorbitant tankless water heaters expenses it will impose on consumers. With Congress setting a objective for a signed financial regulatory reform bill by the end of the year, the creation of Americans for Monetary Reform comes none too soon. Even when the table is flawed — and the Obama Administration perhaps missed an chance to set it correct — consumers and citizens need a seat there nonetheless. Otherwise, it’s business as usual, and we know just where that leads.