On Wall Street Reform, Who Will Republicans Listen To?
Driven by recklessness and greed, Wall Street bankers plunged the world economy into the worst recession in a generation, causing millions of workers to lose their jobs. Americans are crying out for reform that brings accountability and transparency into the financial system, and makes Wall Street pay. Meanwhile, greedy CEOs on Wall Street are fighting to hold on to the same casino system that rewards lost bets with bailouts and bonuses.
With the first vote on Wall Street reform scheduled this evening, Americans are asking, "Who will the Republicans listen to?"
The American People Want Leaders To Hold Wall Street Accountable
Two-thirds of Americans support stricter federal regulation of banks and other financial institutions, and by a double-digit margin the public trusts President Obama above the Republicans in Congress to handle the issue - a caution flag for the GOP in an election year.
The public supports reform overall by 65-31 percent, a broad margin that's been steady since mid-winter, and favors Obama over the Republicans in trust to handle it by 52-35 percent, a 17-point advantage for the president in this new ABC News/Washington Post poll.
Consumer Federation Of America:
A poll by the Consumer Federation of America (CFA) underscores the public's demand for an agency, independent of Wall Street pressures, tasked with looking out for consumers and holding big banks and credit card companies accountable.
The poll found that 62% of Americans support the creation of a "new federal agency to protect consumers who purchase banking and other financial services." Only 34% opposed such a plan.
Additionally, CFA found that a whopping 85% believe "consumers need more effective protections against unfair and deceptive practices by banks and other financial institutions."
A Harris Poll found that 82% of Americans believe "Wall Street should be subject to tougher regulations." The poll also found that 66% agree that "most people on Wall Street would be willing to break the law if they believed they could make a lot of money and get away with it."
Wall Street Bankers Want To Continue Their Reckless Behavior
Two days before President Barack Obama called on Wall Street titans to ask their lobbyists to stand down in the fight over financial regulation reforms, JP Morgan mobilized its entire New York workforce to join the battle.
On Tuesday, it dispatched an e-mail on the reform package the Senate is considering to 30,000 employees, noting sections it liked and those it didn't, including a tough proposal to overhaul the way banks handle derivatives.
Assessing the battle to overhaul the nation's financial regulations recently, Jamie Dimon, the chief executive of JPMorgan Chase, left no doubt about the consequences if Congress cracked down on his bank's immense business in derivatives.
"It will be negative," he said. "Depending on the real detail, it could be $700 million or a couple billion dollars."
With so much money at stake, it is not surprising that more than 1,500 lobbyists, executives, bankers and others have made their way to the Senate committee that on Wednesday will take up legislation to rein in derivatives, the complex securities at the heart of the financial crisis, the billion-dollar bank bailouts and the fraud case filed last week against Goldman Sachs.
Financiers, lawyers, traders and accountants gathered this week at the annual International Swaps and Derivatives Association conference here to discuss "Collateralization and Netting - the Impact" and "Systemic Risk: Advances and Challenges in the Wake of the Crisis."
By Thursday night they needed to put out of their minds the specter of sweeping legislation to regulate the derivatives.
[...]
During more sober and somber conditions at the conference at the posh Fairmont hotel on Nob Hill the next morning, some of these people confessed that they were in fact very nervous about the future of the derivatives industry.
The drive to bring a bill to the Senate floor that will set tighter guidelines around derivatives trading has left many spooked, but largely unapologetic. Politicians want derivatives swapped in a more open fashion that resembles the way people exchange stocks, bonds and pork belly futures. "Generally speaking, there is a push against what the legislators are trying to do," said Masaya Yamashiro, a vice president at Sumitomo Trust and Banking. "But, obviously, something went wrong to an extent."
Republicans Have Teamed Up With Wall Street To Obstruct Reform
But it's unlikely that rallying cry will spark much of a popular uprising against the financial regulation reform legislation. If anything, it underscores the inability of the Big Banks and their allies to latch onto a phrase or argument that could resonate with the public and provide the industry's Republican defenders with the leverage to reverse the momentum in the regulation fight.
During the health care debate, GOP opponents withstood accusations of becoming the 'Party of No' and charges that they were denying coverage to children because they could see palpable support for their position in the screaming protesters at town hall meetings and the tanking poll numbers of Obama and health-care supporters.
About 25 Wall Street executives, many of them hedge fund managers, sat down for a private meeting Thursday afternoon with two of the most powerful Republican lawmakers in Congress: Senate minority leader Mitch McConnell of Kentucky, and John Cornyn, the senior senator from Texas who runs the National Republican Senatorial Committee, one of the primary fundraising arms of the Republican Party.
The stated topic of the meeting: The Financial reform bill being sponsored by Senator Chris Dodd, the Democrat and chairman of the senate banking committee. Both McConnell and Cornyn listened to numerous complaints the executives have with the bill.
[...]
[Sens. McConnell and Cornyn] also said that they have a shot at taking control of the House by adding 40 additional seats to their current total. In New York State alone, the senators predicted a six-seat pickup.
But in order to assure those gains, and add even more, McConnell and Cornyn made it clear they need Wall Street's help. "There was no arm twisting but they did say that we should feel uncomfortable living in any country where one party has unfettered ability to pass anything including health care and anything else President Obama dreams up," said another executive who was present.
Republicans are stepping up their campaign to win donations from Wall Street, trying to capitalize on an increasing sense of regret among executives at big financial institutions for backing Democrats in 2008.
In discussions with Wall Street executives, Republicans are striving to make the case that they are banks' best hope of preventing President Barack Obama and congressional Democrats from cracking down on Wall Street.
GOP strategists hope to benefit from the reaction to the White House's populist rhetoric and proposals, which range from sharp critiques of bonuses to a tax on big Wall Street banks, caps on executive pay and curbs on business practices deemed too risky.
