by Zach Carter, Media Consortium blogger

Last night, Senate Republicans proved beyond any doubt that when it comes to the economy, they stand with Wall Street and against everybody else. Joined by lone Democrat Sen. Ben Nelson (D-NE), Republicans successfully filibustered the procedural technicality of opening debate on Wall Street reform. It’s an unmistakable ploy to kill the bill and collect campaign cash from bigwig bankers. The coming weeks won’t be pretty.

Republicans are going to be battered by this filibuster. Financial reform is popular, and nobody on Capitol Hill wants to be seen as the agents of Wall Street in Washington come November. Republicans are hoping to rhetorically counter Obama’s proposals, negotiate a fatally weakened reform package, and then vote with Democrats for reform-in-name-only before the elections. But the U.S. financial system is broken and voters know it needs strong medicine.

In a speech last week before Cooper Union Hall in New York City, Obama laid out what’s at stake in the reform fight. Our biggest banks don’t fear failure because they know the government will bail them out in a crisis. As a result, they take massive risks that endanger the economy. Our current regulators ignored predatory lending in order to protect Wall Street profits. To top it off, the risky, multi-trillion-dollar market for derivatives—the financial weapons of mass destruction that brought down AIG—remains beyond the scope of regulatory authority altogether.

Without major changes, the U.S. economy is doomed to repeat the destruction of the past two years. Epic bailouts, consumer predation and heavy job losses will become the new national norm, not just the conditions of a single, terrible crisis. Last night’s Republican-plus-Nelson filibuster was an effort to preserve an unacceptable status quo.

Phony populism

As Matthew Rothschild emphasizes in a podcast for The Progressive, Wall Street Republicans have been spreading all kinds of crazy lies about Obama’s reform legislation. While the legislation that cleared the Senate Banking Committee in March isn’t perfect, it isn’t a massive bailout for Wall Street, either. But Senate Minority Leader Mitch McConnell (R-KY) has been making the rounds calling it just that, in a dishonest effort to kill the bill. This is phony populism. McConnell says he’s against bailouts, but his goal is to prevent reform from overturning the current system, which, as we saw in 2008, has bailouts baked in.

While Obama did a good job identifying what’s wrong on Wall Street, the solutions he proposed are either too weak to end abuses, or simply not included in the Wall Street reform bill in its current form. Obama’s initial proposal for a new Consumer Financial Protection Agency was great, but Sen. Chris Dodd (D-CT) watered down in the Senate Banking Committee to appease Republicans. The same thing happened to Obama’s proposal to fix the wild market for derivatives, the financial weapons of mass destruction that brought down AIG.

How to make reform a reality

As Sarah Ludwig of the Neighborhood Economic Development Advocacy Program (NEDAP) emphasizes in an interview with GRITtv’s Laura Flanders, most of the reforms currently under consideration are a “good first step.” That is to say they are useful and productive—but not enough to fundamentally change the way Wall Street does business.

Fortunately, there are several amendments that can fix these shortcomings, most notably the SAFE Banking Act, introduced by Sens. Sherrod Brown (D-OH) and Ted Kaufman (D-DE). As Peter Rothberg emphasizes for The Nation, the amendment would force our largest banks to split up into institutions that could fail without jeopardizing the broader economy. It would also place a hard cap on the total amount that banks could bet in the financial markets.

Those amendments, of course, can only be added to the bill if Republicans allow debate on financial reform to begin. Progressives should be fighting hard to make sure that the break-up-the-banks measure is included in the bill that the Senate eventually votes on. And as Rothberg notes, there will be plenty of opportunities to do so this week. Protests calling for Major Wall Street reform have been organized all over the country. On Tuesday, protesters will speak out against predatory banking behemoth Wells Fargo in San Francisco. On Wednesday, they will target too-big-to-fail titan Bank of America in Charlotte, N.C. On Thursday, reformers will march straight into the lion’s den on Wall Street itself to demand change. It’s called the Showdown in America, and you can find out more here.

It’s only just begun—but how did we get here in the first place?

But whatever happens with this bill, the fight to rein in Wall Street is just beginning. As Robert Kuttner emphasizes for AlterNet, President Franklin Delano Roosevelt had no shortage of verve for Wall Street reform, but it still took him seven years to enact all of the New Deal banking laws. And as Simon Johnson and James Kwak detail for The American Prospect, reining in Wall Street means overturning the ideology that has dominated the halls of power in Washington, D.C. for three decades.

Since the Reagan era, politicians from both political parties have sincerely believed that what is good for Wall Street is good for America. The subprime mortgage monstrosity and Great Crash of 2008 put cracks in the foundation of that ideology. But the process of demolishing it may very well take longer than the legislative cycle that will end with the November elections.

Even if we do get a strong bill—one that breaks up the biggest banks, bans them from placing risky bets in the derivatives and securities markets and establishes a new Consumer Financial Protection Agency—other important aspects of the financial sector will need to be addressed in other legislation. Hedge funds, whose pivotal role in the crisis is only now being identified, will need to be reined in. Rating agencies, who actively fueled the subprime bubble, and whose business models are founded on conflicts of interest, must be restructured. The future of Fannie Mae and Freddie Mac must be decided. Families across the country still need foreclosure relief.

We need a strong Wall Street reform bill. There is no excuse for any politician from either party to be standing with bigwig bankers against the rest of the country. And with two-thirds of the nation supporting reform, any political party that throws in its lot with Wall Street will pay a major price come November. No amount of Wall Street campaign cash can counter the voter outrage over bank bailouts and bonuses. There’s no way to know when Republicans will come to their senses, but whatever happens this week, there will still be much work to do this year and the next.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Crossposted from Hillbilly Report.

One way you can tell whether something is a good idea is to see exactly who opposes it so vehemently. On the Public Option you see the Corprorate Republican Party and their enablers in the Democratic Party opposing it and trying to get Corporate Welfare which asks the shrinking middle-class to sacrifice. Likewise, now that new regulations are being discussed on the folks that irresponsibly crashed our economy into a ditch and got bailed out by the outgoing Bush Administration while the rest of us suffered, the Chamber of Commerce is fighting it tooth and nail.

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On the morning Client #9 was trysting in DC with Ashley Alexandra Dupre in exchange for $4,000 an hour, The Washington Post published a guest column by Gov. Eliot Spitzer.  See the Washington Post, February, 14, 2008.
http://www.washingtonpost.com/wp-dyn/con tent/article/2008/02/13/AR2008021302783. html
Spitzer described how the Bush administration prohibited the states from protecting consumers from predatory lending.  I will not repeat what he said, just go read it.

Ameriquest was one of the worst of the predatory lenders, and its owner Roland Arnall made a billion dollars committing tens of thousands, if not hundreds of thousands, of frauds and thefts in a predatory lending racketeering enterprise that dwarfs anything that had gone before it.  Ameriquest was sued by the states' attorneys general and he settled for several hundred million dollars.  If you have the time, read the InnerCityPress notes - http://www.innercitypress.org/ameriquest .html

It should also be noted that Arnall gave millions and millions of his stolen dollars to the Republicans.  See the wiki. http://en.wikipedia.org/wiki/Roland_Arna ll In return Bush named Arnall our ambassador to the Netherlands.  After reading Spitzer's article several times, one has to wonder-does this, or does this not, make Bush and his cronies active participants in the predatory lending industry, its chief enablers?  Are they not also criminals just like Arnall was?  Didn't their interference with state enforcement lead to the meltdown of the financial sector?  Was the timing of Spitzer's outing too convenient?  Did Client #9 really screw things up because now no one is paying attention to what he said, and the implications of what he said?  Didn't Bush, personally, cause the meltdown of the economy?

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While out on the campaign trail in South Carolina on Thursday, Senator Edwards won two key endorsements, the first from  the Communications Workers of America of the early primary state of Nevada, with the second from notable social activist, Harry Belafonte.

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"Elizabeth and I are deeply saddened by today's senseless violence in Omaha. Our thoughts and prayers are with the victims and their families and with the community as it begins to deal with the aftermath of this tragedy." - John Edwards

Here at Edwards Evening News, our hearts go out to those families as well.

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