When Wall Street Ate Main Street

The Bull

In 2008, simply put, Wall Street ate Main Street. House were foreclosed upon left and right, massive layoffs rippled throughout the country, and big business was deemed 'too big to fail' and was fed until fat upon the American tax payer's dollars. Now, almost two years later with unemployment rates still hovering at or near 10 percent and with little of the Wall Street Bailout money having any effect on everyday America, we want to ensure that this never happens again. We have looked into the bulls horns once; we will not do so again. Yet for the second time this week Senate republicans halted the democrats Wall Street Reform Bill before it could reach open debate. Democrats cry 'foul' and scream 'obstructionist' at the their republican counterparts (and even one of their own). Is it just 'the politics of no' reasserting itself in the petty politics to which we have grown all to accustom, or is it something more?

The Horns

This bill has been the brainchild of Senators Christopher Dodd (D- CT) and Richard Shelby (R- Alabama) for most of this session and until recently it seemed both sides were getting along. That was until Senator Harry Reid (D-NV) decided to bring the unfinished bill to open debate. If this seems complete illogical to anyone, that's because it is. Why would anyone want to interfere in negotiations that both sides agreed were going well and was close to a settlement? Simple really, Reid is in a fight for his political life and he knows that if he passes wall street reform of any kind, it will definitely benefit his re-election campaign battle (a battle he is losing if I may point out). Way to play petty politics with such an important matter Mr. Majority leader, we appreciate it so much.

The battle has been fierce with Republicans and even one Senate democrat denying Reid his victory in a 57-41 vote, denying him the necessary 60 votes. They wish to wait until the negotiations have been finished and the bill properly constructed. Formerly the battle raged over the billion bank liquidation fund. This provision was to provide a trust of money that large corporations could pay into in order to use it at a latter date to save themselves from failure. This sounded too much like the previous bailouts for the Senate Republicans (or my) tastes. They fought that battle and won, succeeding in having it removed from the bill and the White House claiming it as no real loss. Basically agreeing it was unnecessary right? Just checking.

The next battle, which isn't completely finished, has been the fight over the consumer regulatory agency designed to guard against unfair credit charges and other issues. However, Republicans and even the lone Democrat (George Vinovich D- OH) wonder how far and powerful will this agency could become. They fear it could interfere in free market principles and chase investors away from America causing an economic backlash. A deal does seem close however and it seems that this could be worked out soon.

However, the last and most controversial issue is that of the derivative. A derivative for those who don't know, is a bet of sorts against ones property value or stock in order to increase gains made when that goal or value is reached. This has been identified as one of the biggest causes for the 2008 Wall Street tumble because this process leads to bad investments and even worse investing practices. Both sides agree that action is needed to reign in these confusing and dangerous trades, yet the question again lies in the scope. How much is too much? How much is too little? My suggestion is find a middle ground. Don't completely obliterate the derivative trade but make it a little harder to obtain and set strict limits on what and where derivatives can be used. Play it smart, every market has an equilibrium so find the middle ground in this problem too. Personally I think all of our Senator's could use a refresher course in economics.

A Matador in Sight?

Sadly, no. President Obama has attempted to play the caped crusader and tame the bull but he has been no more able than anyone else in his administration or Congress. His constant campaigning has changed from health care to wall street without skipping a beat, yet seems even more lackluster than before. His Treasurer is no were to be found, as usual, and no one has stepped up in his absence. I think that's because this issue runs too deep and there is a need for more than just one matador. I believe that only true bipartisanship can fix this issue and that in this case it can be accomplished. If only Harry Reid had left things alone... I hope he loses his re-election bid. Just saying. Idiot!

Later,
Cody

(Photo: Courtesy of Freakingnews.com)