Shortly after casting a vote against ending debate on the Senate’s financial regulatory reform legislation, Sen. Russ Feingold issued a statement outlining why he cast his vote against ending debate:
“After thirty years of giving in to the wishes of Wall Street lobbyists, Congress needs to finally enact tough reforms to prevent Wall Street from driving our economy into the ditch again. We need to eliminate the risk posed to our economy by ‘too big to fail’ financial firms and to reinstate the protective firewalls between Main Street banks and Wall Street firms. Unfortunately, these key reforms are not included in the bill. The test for this legislation is a simple one – whether it will prevent another financial crisis. As the bill stands, it fails that test. Ending debate on the bill is finishing before the job is done.”
In a speech Sen. Feingold delivered on the floor of the Senate on May 6, 2010, he outlined both his concerns about financial regulatory reform as well as his test for the bill – whether or not it will prevent another financial crisis. Here’s Sen. Feingold’s remarks on May 6:
But this runs contrary to the narrative that Feingold is beholden to Reid and Pelosi. In light, the GOP cannot possibly continue to push that lie.
el-oh-el
First of all, I’m so sick to death of the whole “Wall Street vs. Main Street” false dichotomy. It’s just become such a buzzword, tops on the list of phrases all politicians must use right now to elicit the desired response – to be divisive and to pass blame along to some while absolving others. It’s not the least bit useful of helpful to actually solving anything. Fact is there were plenty of “Main Street” banks motivated by greed to play fast & loose and plenty of solid “Wall Street” firms that were fiscally responsible – that honored their fiduciary duties as they always have. But that doesn’t make for a 10-second soundbite or further any agendas.
I think Feingold makes a lot of good points, blaming the politicians for not doing their job. The fact of the matter is “Wall Street” was out in front of a lot of this, trying to fix it only to be ignored by the regulators. I still remember reading many articles and editorials in the Wall Street Journal criticizing Fannie & Freddie accepting sub-prime loans. They predicted the inevitable result long before it finally happened but the politicians responsible for oversight stuck their fingers in their ears and said,
Ultimately this all really has little to do with the finance industry at all, it’s just another manifestation of the same underlying problem. Whatever the industry or location, Congress treats their favorites differently. Whether it’s pork for their district or looking the other way or passing favorable legislation for their pet industries and donors, their corruption was what allowed it to happen.
But despite being on the right track now, wher e was Senator Feingold when his corrupt colleagues (including Wisconsin’s own Herb Kohl) on the Senate Banking Committee did nothing to reign it the “evil Wall Street firms”?
Wow, what a maverick, he voted against ending debate, thats bold!
When the vote comes on the actual bill the blowhard will still vote with the rest of the democrats.
Since he’s been a part of Congress for the last 10+ years is he admitting that he also gave in to Wall Street lobbyists?
Term limits are long overdue, the entire U.S. Congress needs to be replaced with people who actually represent the wishes of the public instead of do nothing political posturing.
I should also add, that I think Feingold is a little too concerned with too big to fail, that Gramm’s ’99 reforms are so heavily to blame or that bringing back Glass-Steagall will magically fix anything. It all plays well with the consolidation is always bad, simplistic view of things but things just aren’t that simple.
There are efficiencies with consolidation, and it can be done to improve service for customers and reduce costs without disastrous consequences. When there is something that isn’t absolutely right or wrong, but just depends on the manner it’s done, we don’t make it illegal, we make doing it the wrong manner illegal. Not to mention, the world is a very different place than it was in 1933. I’ve worked in the financial services industry in one way shape or form for about 20 years. If you think you can draw a bring line between investment, insurance and banking products, you’re absolutely crazy. Tell me how a money market account that allows check writing is in different in any real way from a high end savings account. Banks have offered investment accounts, and administered retirement accounts for years. It’s not really any different than the cable/phone/Internet services. Cable began offering intenent over their lines as did the phone companies. Now that speeds are improving, cable wants to compete with the phone companies and offer VoIP, phone companies are offering TV over their IP connections. The old lines that made those cross-overs illegal were just idiotic and in no one’s best interests. It’s not the consolidation that is bad – it’s when consolidation leads to lack of competition & choices. That’s just not the case in the financial services industry.
Finally, back to too big to fail. Personally, I’ve always hated it, but begrudgingly accepted the general principle in some rare cases. The last few years have convinced me that it the practice and very words need to be completely eradicated because our politicians can’t be trusted to actually limit it to the rare cases. Sure we can forcefully restrict the size of companies, but that doesn’t at all mean they won’t still be bailed out – still considered too big to fail by the politicians who may well have been elected on the backs of contributions from that company. And the biggest problem of all, is that perception matters more than anything else. If a company believes the government will be there to bail them out, then they’re going to act accordingly and the size of the company is really irrelevant. There was absolutely no reason to bail out GM. Yes people would have been out of jobs but that’s the case with each of the thousands of companies that go under every day and some percentage of them would have been put back to work – along with many other assets of the company – at companies much more productive and efficient. This is why entitlement is so destructive. When you believe you’re entitled, behavior changes for the worse. Necessitating intervention. Furthering the attitude of entitlement.
“There are efficiencies with consolidation, and it can be done to improve service for customers and reduce costs without disastrous consequences.”
Consolidation provides reduced costs and improved service? I thought competition and the free marketplace provided for that?
btw: Banks are like communication companies? well if ATT stops providing U-verse service in Milwaukee I might lose connectivity for a day or so, but my retirement accounts won’t get wiped out…and I probably won’t lose my job because of it.
Way to miss the point. Consolidation can be done in a manner that benefits consumers – that doesn’t mean it always is. The act in and of itself is neither good nor bad – and blanket statements about it always being bad are a sign of an immature or incapable mind. Punching somebody is a fine example. We’re walking down the street & I punch somebody, it’s wrong & I should be charged with assault. I walk up to someone committing a crime, say attacking somebody else and my same action are now justified and actually a benefit to society.
btw: that wooshing sound was the point about banking and financial services no longer being black and white just like telephone and cable services flying right over your head. The idea that the Gramm Act suddenly opened the floodgates is just not accurate. The market had changed and banks were offering investments and investment companies were offering deposit accounts for years – water was pouring over dam already. Certainly there’s a good argument to be made that better oversight & and some restrictions need to be in place – but the idea that we can magically revert to the rules that worked in 1933 is just plain laughable. We have products they would never even have imagined – where appropriately used, most of them can be very effective had helping a person achieve their risk and investment objectives. Now suitability – that’s a difficult issue. Though it’s worth noting, it’s hard to imagine a government agency doing the job anywhere near as effective as the investment industry’s own, self-regulated arm (FINRA).
Although it was rewarding to once again provoke your favorite whooshing sound retort, I must apologize for failing to include the sarcasm icon in my original reply.
Although I question governments efficacy as a regulator in many cases (particularly their reticence to divorce themselves from undue influences by the regulated), it is inevitable that ‘self regulating arms’ succumb to self interest.
Didn’t realize I had a favorite retort, but thanks for letting me know that.
No, it’s not inevitable. And absolute, overgeneralizatons aren’t going to win you many arguments. The structure of FINRA with doing front line regulation, oversight & enforcement with the big stick of the SEC behind for conduct that crosses over to criminal has been really effective for decades.