Tag Archives: Adam Sorensen

FinReg Soon To Be More Than Just A Wonky Blogger’s Twitter Tag

The round-up with Max Fisher at The Atlantic

Adam Sorensen at Swampland at Time:

By a 60-39 vote Thursday, the Senate passed legislation that re-calibrates the flow of capital through the American financial sector and provides new powers to the regulatory regime that oversees it. The final bill is the culmination of a near two-year effort launched after 2008’s Wall Street crisis thrust the nation into recession and marks the most comprehensive changes to government’s oversight of banks since the Great Depression. When Obama signs it into law next week, financial reform will join health care and the stimulus in the ranks of major Democratic initiatives enacted by the 111th Congress and boldface bullet-points on the president’s resume.

Peter Suderman at Reason:

In a victory for the hordes of Washington politicians who have been deeply committed to doing something about Wall Street (regardless of whether that something was likely to be effective), the Senate voted 60 to 38 to move forward with a significant overhaul of the nation’s financial regulations. Three of those votes came from moderate Republicans, including Cosmo-pinup Scott Brown, who, after demanding that Democrats remove a tax on banks (and replace the revenue with TARP revenue that was intended to be used to reduce the deficit), gave the bill his blessing. As predicted, once Brown came around, fellow GOP squishes centrists Olympia Snowe and Susan Collins followed. No longer just a guy with a truck, he’s now a guy with a truck who decides whether or not to massively increase the power of federal regulators over the nation’s banking system.

Annie Lowrey at The Washington Independent:

The final bill, more than 2,300 pages in length, directs regulators to create 533 rules, according to the Chamber of Commerce. The bill contains three central provisions. First, it provides the government with new powers to identify risky banking institutions and to shutter them before they harm the broader financial system, via a new systemic regulator. Henry Paulson, the Treasury Secretary under President Bush when the financial crisis first hit, lauded the provision this week. “We would have loved to have something like this for Lehman Brothers. There’s no doubt about it,” he told The New York Times, referring to the investment bank that collapsed, destabilizing the country’s financial system and contributing to the credit crunch. Democrats say this provision ends “too big to fail,” by providing the government with a way of shutting down failing banks, reassuring counterparties and containing any sense of panic.

Second, the Dodd-Frank bill makes banks less dangerous, forcing them to keep more capital on hand, banning them from making risky trades on their own behalf and keeping them from investing heavily in vehicles like hedge funds. “[The bill] places some limits on the size of banks and the kinds of risks that banking institutions can take,” President Obama told an audience of Wall Street workers this spring, speaking at Cooper Union in Manhattan. “This will not only safeguard our system against crises, this will also make our system stronger and more competitive by instilling confidence here at home and across the globe. Markets depend on that confidence. By enacting these reforms, we’ll help ensure that our financial system — and our economy — continues to be the envy of the world.”

Finally, it creates a new consumer financial protection bureau, which will have the power to create and enforce new rules regarding financial products like home-equity loans and credit cards. “Consumers finally will have a cop on the beat … that will monitor the market and write and enforce the rules,” said Susan Weinstock, the financial reform campaign director for the Consumer Federation of America. “The Wild West for financial products and services is coming to an end. Consumers will now have a bureau that will clear out the tricks and traps in financial products and services that have harmed so many Americans.”

Nicole Gelinas at The Corner:

A couple of hours before the Senate narrowly passed the Dodd-Frank fin-reg bill today, Sen. Chris Dodd, one of the bill’s two namesakes, spoke some common sense on the Senate floor:

We can’t legislate wisdom or passion. We can’t legislate competency.

Dodd did not allow this point of truth to inform the bill that he helped write, though.

The financial system’s failures made themselves obvious starting in 2007 in part because legislators and regulators thought that they could conjure up on command not only wisdom and competence but omniscience.

In the years leading up to the financial crisis, regulators allowed financial firms such as AIG to create derivatives that evaded the old-fashioned limits on borrowing and trading. The people in charge figured that the financial guys had figured out every angle and made these things perfectly safe.

Regulators, too, allowed banks to borrow far more than old-fashioned rules would have allowed on mortgage-related securities and other instruments rated AAA — because competent people had determined that such securities could never fail.

Finally, regulators allowed people to buy houses with no money down — even though we learned in the 1920s that it’s not a good idea to let people borrow limitlessly to speculate that the price of something will continue to rise.

The lesson to be learned here is that we need borrowing and trading rules that apply to everyone and everything for those times when bankers, regulators, and tens of millions of ordinary Americans aren’t right.

The bill offers no evidence that anyone in Congress has learned this lesson.

Just over a hundred years ago, the United States led the world in terms of rethinking how big business worked – and when the power of such firms should be constrained. In retrospect, the breakthrough legislation – not just for the US, but also internationally – was the Sherman Antitrust Act of 1890.

The Dodd-Frank Financial Reform Bill, which is about to pass the US Senate, does something similar – and long overdue – for banking.

Prior to 1890, big business was widely regarded as more efficient and generally more modern than small business. Most people saw the consolidation of smaller firms into fewer, large firms as a stabilizing development that rewarded success and allowed for further productive investment. The creation of America as a major economic power, after all, was made possible by giant steel mills, integrated railway systems, and the mobilization of enormous energy reserves through such ventures as Standard Oil.

But ever-bigger business also had a profound social impact, and here the ledger entries were not all in the positive column. The people who ran big business were often unscrupulous, and in some cases used their dominant market position to drive out their competitors – enabling the surviving firms subsequently to restrict supply and raise prices.

There was dominance, to be sure, in the local and regional markets of mid-nineteenth-century America, but nothing like what developed in the 50 years that followed. Big business brought major productivity improvements, but it also increased the power of private companies to act in ways that were injurious to the broader marketplace – and to society.

The Sherman Act itself did not change this situation overnight, but, once President Theodore Roosevelt decided to take up the cause, it became a powerful tool that could be used to break up industrial and transportation monopolies. By doing so, Roosevelt and those who followed in his footsteps shifted the consensus.

[…]

Why are these antitrust tools not used against today’s megabanks, which have become so powerful that they can sway legislation and regulation massively in their favor, while also receiving generous taxpayer-financed bailouts as needed?

The answer is that the kind of power that big banks wield today is very different from what was imagined by the Sherman Act’s drafters – or by the people who shaped its application in the early years of the twentieth century. The banks do not have monopoly pricing power in the traditional sense, and their market share – at the national level – is lower than what would trigger an antitrust investigation in the non-financial sectors.

Effective size caps on banks were imposed by the banking reforms of the 1930’s, and there was an effort to maintain such restrictions in the Riegle-Neal Act of 1994. But all of these limitations fell by the wayside during the wholesale deregulation of the past 15 years.

Now, however, a new form of antitrust arrives – in the form of the Kanjorski Amendment, whose language was embedded in the Dodd-Frank bill. Once the bill becomes law, federal regulators will have the right and the responsibility to limit the scope of big banks and, as necessary, break them up when they pose a “grave risk” to financial stability.

This is not a theoretical possibility – such risks manifested themselves quite clearly in late 2008 and into early 2009. It remains uncertain, of course, whether the regulators would actually take such steps. But, as Representative Paul Kanjorski, the main force behind the provision, recently put it, “The key lesson of the last decade is that financial regulators must use their powers, rather than coddle industry interests.”

And Kanjorski probably is right that not much would be required. “If just one regulator uses these extraordinary powers [to break up too-big-to-fail banks] just once,” he says, “it will send a powerful message,” one that would “significantly reform how all financial services firms behave forever more.”

Regulators can do a great deal, but they need political direction from the highest level in order to make genuine progress. Teddy Roosevelt, of course, preferred to “Speak softly and carry a big stick.” The Kanjorski Amendment is a very big stick. Who will pick it up?

Brian Beutler at Talking Points Memo:

They’re not campaigning on it in earnest — at least not yet — but Republican leaders say that, given the power, they would like to do away with Wall Street reform much like they have already discussed repealing health care reform.

“I think it ought to be repealed,” said House Minority Leader John Boehner, in response to a question from TPMDC, at his weekly press conference this morning.

One of his top lieutenants, Republican Conference Chair Mike Pence agrees. “We hope [the Senate vote] falters so we can start over,” Pence told TPMDC yesterday. “I think the reason you’re not hearing talk about efforts to repeal the permanent bailout authority is because the bill hasn’t passed yet.”

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Filed under Economics, Legislation Pending, The Crisis

Rainy Days, Nicknames, And Arkansas Democratic Politics

This post will be updated later, obviously.

Politico:

Just four states go to the polls Tuesday, but together they cast a long shadow.

It’s the biggest single-day primary so far in 2010, and the outcomes in a handful of key races will provide the clearest indication yet of the depth and intensity of the anti-incumbent fever that is shaping the midterm elections.

The most closely watched battles will be in Pennsylvania, where Democratic Sen. Arlen Specter is in serious danger of losing the seat he has held for three decades to two-term Rep. Joe Sestak, and in Arkansas, where Democratic Sen. Blanche Lincoln is seeking to fend off Lt. Gov. Bill Halter.

Kentucky’s GOP Senate race is expected to provide a measure of grassroots conservative populist strength — not to mention anti-establishment sentiment — with party favorite Secretary of State Trey Grayson playing the unexpected role of underdog in his matchup against tea party-backed physician Rand Paul.

The western Pennsylvania-based special election for the seat of the late Democratic Rep. John Murtha, meanwhile, will provide a crucial barometer of the popularity of President Barack Obama’s ambitious Democratic agenda.

And that’s not all. The primary-day agenda also includes a slate of notable House primaries in Pennsylvania, while in Arkansas, where three of the state’s four congressmen are not seeking reelection, voters will select nominees in three open-seat races.

When it comes to politics, the media always prefer a big meta- story that includes controversy, consequences, and implications. It’s so much easier on the headline writers. So for Tuesday’s primaries, they’d like to see any of the following stories: “Unions Assert Muscle.” Or “Incumbents Thrown Overboard.” Or perhaps “Tea Party Wins Big,” and even “Obama Rebuked.”

It’s more likely to be some murkier mix. But even before the results are in, some trends and lessons are clearly evident.

• “I can win” is not a good message. Neither is “He can win.”

Pennsylvania Sen. Arlen Specter did something unheard of for a politician. He told the truth. He admitted the obvious when he switched parties. He didn’t say the party had left him. He didn’t say it was a matter of principle. He said the polls suggested he was more likely to get reelected if he became a Democrat. So he did. You could hear the subsequent collective groan from the political-consultant community. Specter may as well have printed bumper stickers that said, “It’s not about you. It’s about me.”

And then Team Obama did the same thing by endorsing Specter with a “He can win” strategy and message. Threw principle out the window because they thought Specter had a better shot to beat the Republican nominee Pat Toomey.

But now it appears Specter may be upset in the primary by Rep. Joe Sestak. Oops. Good chance Specter will pay the price for making the race about his hopes rather than the voters’.

Greg Sargent:

A quick report from the field in Pennsylvania.

Voter turnout is light in virtually all parts of the state, particularly in Philadelphia, the office of the Secretary of State confirms, developments that are likely to favor Joe Sestak.

Arlen Specter needs high turnout because his supporters are thought to be less enthusiastic, while Sestak’s are more motivated. Specter particularly is counting on high turnout in Philly.

But Charlie Young, a spokesman for the Secretary of State, says turnout in the state, where the weather is bad today, is low.

“It’s relatively light, with some higher concentrations out in the areas that have the special election for Murtha’s seat,” he says, referring to the battle for Pennsylvania’s 12th district in the southwestern part of the state.

Philadelphia’s turnout, he says, is even lighter. “There are no lines anywhere,” he says.

This is born out by an official with a major union backing Specter, who says union hands doing get-out-the-vote work are reporting back that “turnout is abysmal.”

“People aren’t fired up about Specter,” the official conceded. “It’s low statewide, and then in Philly it especially sucks.”

Marc Ambinder:

Democrats and Republicans say their early canvassing returns in Pennsylvania’s 12th CD show a very tight race, and that makes Republicans more anxious than Democrats. Democrats say they’re hitting their targets.

And they’re still sending out memos pointing to Republicans who say that the race ought to be a GOP win — something the Democrats would NOT do if they weren’t seeing the numbers. Remember, both parties have sophisticated boiler room operations and have volunteers checking voter lists in sample precincts … and they feed this data into a computer and out pops various projections of turnout.

Across Pennsylvania, it’s raining. Turnout, according to Democrats, is “abysmal” in Philadelphia, which is difficult news for Sen. Arlen Specter. Right now, Mayor Michael Nutter and Governor Ed Rendell are doing the TV/Radio rounds to try and open the floodgates.

At this point, both sides believe that Blanche Lincoln won’t have enough votes to avoid a run-off in Arkansas. The AP seems to be doing a better job of finding Bill Halter voters to quote, but that could be a function of their activist disposition. Lincoln has historically had a good, if understated ground game. But labor has imported a massive one.

No one is seeing anything in Kentucky that would change minds about the expected outcome on the Republican side of the ledger.

Adam Sorensen at Swampland at Time:

As you probably know, Trey Grayson is running for Senate in Kentucky. What you might not know is that “Trey” isn’t actually his name. It’s just a handle given to the third in a line of Charles Merwin Graysons. Far from frowning on pseudonymous politicians, the Bluegrass State allows candidates to designate a nickname to run on the official ballot.

Our colleague Feifei Sun points me in the direction of the down-ballot candidate rolls and the fabulous treasure trove of monikers therein. The nicknames run the gamut from zoological — Dale “Frog” Ford for sheriff, Steve “Farm Dog” Farmer for magistrate, William “Turkey” Thomason for mayor and Shawn “Squid” Rye for county commissioner — to culinary — Jerry “Peanuts” Gaines for sheriff, TP “Puddin” Scott for magistrate, Eddie “Popcorn” Brown for constable and Jeff “Buttermilk” Mountjoy for jailer — and the outright bizarre — John “Hermanator” Kirk for sheriff, Ancel “Hard Rock” Smith for assemblyman and, perhaps tragically, Mike “Need Kidney” Sittason for surveyor.

UPDATE #2: Sestak wins. Allah Pundit

UPDATE #3: Jonathan Martin & Charles Mahtesian in Politico

Steve Benen

Jules Crittenden

Atrios

Marc Ambinder

Daniel Larison

Glen Bolger

John McCormack at The Weekly Standard

UPDATE #4: Nate Silver

Michael Barone at The Washington Examiner

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Filed under Political Figures, Politics

“Remember, Remember The Fifth Of November”

Jon Ward at The Daily Caller:

The Republican Governor’s Association put out a video Friday that is a pretty slick piece of work.

It’s basically an 80-second movie trailer that casts President Obama as the villain of modern American politics, with Nancy Pelosi and Harry Reid as his sidekick and henchman.

But it’s a pretty impressive piece of multimedia, especially since conservatives are generally thought of as being pretty lame in that realm. The music, editing, pacing and graphics are top notch. And an RGA spokesman told me they did it all in house with young RGA staff.

Micheal Scherer at Swampland at Time:

A few years back, two left-leaning writers, Andy and Lana Wachowski, adapted the story of Guy Fawkes, a Catholic radical who is remembered primarily for his failed attempt, on November 5, 1605, to blow up the Houses of Parliament and kill King James I. The Wachowski brothers movie, V for Vendetta, made Fawkes the hero and presented the British crown as an oppressive dictatorship that was meant to echo, at least in technique, certain aspects of the administration of George W. Bush, down to the hooded prisoners, the orange jump suits and the unapologetic embrace of harsh interrogation techniques.

The meaning of Fawkes is, of course, not fixed. The Wachowski brothers’ retelling of the Fawkes’ story was later embraced by libertarian supporters of Ron Paul. During the 2008 campaign, “Remember, Remember The Fifth of November” became a rallying cry for Paul boosters, who shared at least some of the revolutionary fire of both Fawkes and the Wachowskis. On November 5, 2007, Guy Fawkes Day, Paul supporters raised more than $4 million online.

Now, the Fawkes mythology has come full circle. The Republican Governors Association has embraced the symbolism of Fawkes, launching a rather striking website, RememberNovember.com, with a video that showcases far more Hollywood savvy than one can usually expect from Republicans. Again, the Fawkes tale has been twisted a bit. This time, President Obama plays the roll of King James, the Democratic leadership is Parliament, and the Republican Party represents the aggrieved Catholic mass.

Allah Pundit:

I was tipped to this, incidentally, by Time magazine, which is pushing the angle that “Remember November” is a deliberate allusion to anti-government British terrorist Guy Fawkes. Which I guess qualifies this as some sort of “dog whistle” to the neo-McVeigh-ish wingnut base or whatever. Unless I missed something, though, there’s nothing in the vid itself nodding at Fawkes; the one and only supposed reference is the name of the website, and even that’s not quite right. The old rhyme about Fawkes is “remember, remember the fifth of November.” If I had to guess why the RGA chose the name they did, I’d inch out on the limb and conjecture that it’s because it rhymes, much like the phrase “We’ll remember in November” that the boss emeritus floated last week. But then, “it rhymes” is a much duller narrative than the GOP playing on “let’s blow up parliament” sentiment. I’d be interested in hearing Barbour’s thoughts on that. If he is purposely alluding to Fawkes, it’s both unwelcome and very politically stupid. Click the image to watch.

Remember November so that we can return America to its founding principles of freedom, personal responsibility and economic liberty. We Remember November so we, our children, and grandchildren can live with the freedoms our founding fathers intended.

You can sign your name to the list here.

UPDATE: The violent left believes the above video is a deliberate allusion to anti-government British terrorist Guy Fawkes.

Scott Johnson at Powerline

Instapundit

Lori Ziganto at Redstate:

Awesome. To me, it brings to mind my new favorite quote from a sign at a recent tea party rally:

“I can see November from my house.”

Well done, RGA. Well done.

Brad DeLong:

Remember, remember the fifth of November: gunpowder, treason and plot.

Remember: Guy Fawkes’s goal was to blow up the legislature of the Kingdom of England–the equivalent of crashing a hijacked jetliner into the Capitol while the House and Senate were in session.

Josh Marshall at Talking Points Memo:

I find this completely bewildering. The Republican Governors Association is embracing the mantle of a 17th century radical who tried but failed to pull off a mass casualty terrorist attack to kill the King of England and all of Parliament. Only now Obama plays the role of James I. Guy Fawkes is their new hero?

Nothing shocks me anymore. But this shocks me.

Dave Noon at Lawyers Guns and Money:

I agree with Josh Marshall that this is pretty shocking, especially coming from people who can be counted on to yowl insanely every time a young poseur is photographed wearing a Che Guevara shirt to an anti-war rally. Never mind that the RGA has its history completely ass-backward; the cry of “WOLVERINES! “Remember November” has nothing to do with keeping Guy Fawkes’ aspirations alive but is, rather, intended to commemorate his execution and remind the English to be alert to treasonous conspirators in their midst.For fuck’s sake. Just imagine if liberals organized their opposition to Republican economic policies by trying to rally their base by commemorating the life and works of Leon Czolgosz.

UPDATE: Adam Sorensen at Swampland at Time

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Filed under History, New Media, Politics