It has become all too clear that Wall Street's unregulated, casino-style gambling with exotic financial instruments enriched an elite few at the cost of an economic crash that harmed most Americans, went global and nearly threw the world into another Great Depression. The crisis that ensued occurred when George W. Bush held the White House and Republicans held control of the Senate, and it was stanched by bailouts that were initiated by the Republicans who controlled Washington at the time.
So it defies logic and reason that the Republican bloc in the Senate -- now the minority due largely to the financial debacle that happened on their watch -- is now filibustering to block the financial reform bill that is designed to prevent such a financial meltdown from happening again.
It is even more stupefying that they are claiming the bill would cause more bailouts, when it would do the very opposite.
But that is exactly what they are doing, while acting as if the bill is misconceived and would make matters worse. They voted on Wednesday for the third straight day to keep the bill from coming to the floor for full debate by delivering another solid, lock-step vote to sustain the 40-vote margin needed to hold their filibuster in place.
The continuing filibuster against financial reform by the party-of-nope is playing out against the background grilling elsewhere in a Senate committee chamber of Goldman Sachs' executives who have been charged with fraud by the Securities and Exchange Commission. Those charges arise from one of the most egregious examples of Wall Street's financial mugging of investors in the run-up to the financial implosion in the fall of 2008.
The SEC claims that Goldman Sachs, the iconic Wall Street investment bank that came out of the financial crash on top, made billions by custom-designing and selling esoteric toxic mortgage securities that were designed to fail, and then betting against these very securities along with a privy hedge fund manager, John Paulson, who made $3.7 billion in 2007.
Goldman Sachs has declared its innocence. It justified its highly leveraged bets against the securities it had sold its clients as "risk protection." That's a dubious claim on its face. It didn't inform its clients -- insurance companies and pension plans -- that it would bet against their purchase of its own securities. If that claim could conceivably protect the bank from fraud charges, it's all the more reason to tighten regulation and improve transparency and oversight of trading tactics and capital reserve requirements for banks that engage in market trading, particularly in derivatives and similar investments.
Wall Street's seemingly unethical and insider dealing is also ample reason to require other proposed areas of regulatory reform, specifically including a $50 billion bailout reserve to be established by assessments on investment banks. Republicans make the incredible claim that such a fund would produce more taxpayer bailouts.
That's ridiculous. Together with other regulatory reforms, it would protect taxpayers from paying for bailouts by requiring banks to finance any bailout that might be needed. That seems feasible: the nation's bill so far is $87 billion after banks' reimbursements.
The reform bill would also provide authorize Treasury to break up banking conglomerates from becoming too big to be allowed to fail, and it would establish a Consumer Financial Protection Agency to establish and police fair rules for financial services and
Republican obstructionist can claim that the bill is not as good as it could be. But the way to fix that is to allow the bill to come to the floor for the formal amendment process, and to publicly offer amendments.
In reality, Republicans are stalling debate on the bill through a filibuster simply because it gives them some behind-the-scenes leverage to force compromises that please the banking lobby. But such compromises obviously can't stand the light of day in open debates and the amendment process; otherwise they would let the bill come to the floor.