Now would be a good time to phone your Senators’ offices and ask for real oversight in the financial reform bill. Republicans will oppose whatever comes to the floor, of course, because they fear giving Obama a victory, and their nutball base, more than they fear ads making them look chummy with banksters. Since they will vote against the bill anyway, we might as well forget their stupid bad-faith complaints and make the bill as effective as possible.
I don’t understand the issue well enough to tell you exactly what to say. Ezra Klein has some good ideas about derivatives that you can read about here. If any of you have informed advice that can make calls more effective, please (seriously, please) share it in the comments. Your Republican Senators will always appreciate hearing how you feel about their party teabagging the smug pricks who wrecked America.
Switchboard: (202) 224-3121
Guide for first-timers here.
Bob K
OT – Anyone interested in a gig with AP? I think they’re going to have an opening soon. :^)
http://apnews.excite.com/article/20100413/D9F28M2G1.html
Sentient Puddle
My tip on talking points: capital requirements (Ezra summarizes). The Dodd proposal currently doesn’t have any. The House bill has a 15-to-1 leverage requirement. Asking for the House language on this is a pretty simple thing to do.
Tim F.
@Sentient Puddle: Maybe we could ask them to just pass the fucking House bill. Heh.
Linda Featheringill
As I understand financial regulatory reform:
The goals of the financial regulatory reform bills [House and Senate] include
1. Stability of the financial system
2. Regulation of risky instruments [such as derivatives, etc.]
3. Protection of consumers from risky financial products
These are worthy goals. We all want these things.
The points of contention seem to be
1. The effectiveness of steps taken to avoid having to bail out businesses that are “too big to fail”
2. The Federal Reserve emergency lending authority which is perhaps vulnerable to abuse
3. Efforts to regulate executive pay and whether they would be successful or just too intrusive
4. Authority and efficacy of the consumer protection agency, with attention to its independence from the people it is supposed to be regulating
Of these contentious points, (1) and (4) seem to be the most important to me.
In the recent past we were all held up for ransom by companies that were so big they threatened to take us all down with them. Maybe we can avoid that in the future.
The consumer protection agency needs to be fair, independent, and effective. Otherwise, why bother setting it up?
[Really, really open to discussion and/or suggestions.]
Sentient Puddle
@Tim F.: D’oh! Walked right into that one.
More seriously, there’s good stuff in what Dodd has that we want to keep. Here’s a good summary of the pros and cons of the bills, as well as what Obama has proposed. A pretty good top-level summary of all the aspects, as well.
ellaesther
@Sentient Puddle: I’m going to read this and read a bit more and then read more and then make the call.
I agree in theory, but I am far too woefully lacking in what one might call “knowledge” to make an intelligent phone call at this point.
And @Linda Featheringill: Thank you for this, I will start by reading here. (And I finally got back to last night’s open thread kind of late – I hope you saw I thanked you for you kind comments about my post!)
/off to read.
Tim F.
@Sentient Puddle: Do you think that the extra good stuff would fit in a reconciliation package?
Sentient Puddle
@ellaesther: A quick way to summarize that bit of policy is that banks would be required to have some level of capital in reserve for however much they loan out. That way, if there’s a big crash and the bank has a lot of bad outstanding loans, they can get through it at least reasonably well.
The ratio is specifically how much they have to keep in reserve. 15-to-1 means $1 for every $15 loaned out. That’s actually pretty aggressive, but, eh, reasonable considering just how bad the banks fucked up.
Sentient Puddle
@Tim F.: Probably not. In fact, I’m not entirely sure if any part of financial regulation would actually pass reconciliation muster (except maybe windfall taxes).
Isobel
Americans for Financial Reform has a bunch of info, including position papers at ourfinancialsecurity.org
Kyle Schmidt
If you are calling Congressmen please bring up the fact that fraud in unregulated markets has been a significant cause of the financial crisis. The Senate is today holding hearings on WaMu who were creating mortgage backed securities they KNEW would fail and were betting against them to make money. There needs to be regulation of the shadow banking industry as well as resolution authority to break up banks that are too big to fail. More info on financial regulation can be found here.
Camchuck
I consider this a good checklist for financial regulation reform.
Ratings Agencies
Derivatives
Non bank lenders = bank lenders
Leverage limits
TBTF
Fed Reserve authority
Consolidate FinReg agencies
Improve SEC
Compensation incentives
Sloegin
Separate banking and securities bitchez! Glass-Stegall!
Seriously, Maria Cantwell tried to jump start this a while ago, need to send her some constituent love…
schooner
There are a number of great financial and economic blogs that are covering this and making suggestions. I would humbly suggest looking at a few of my favourites that do a good job:
http://baselinescenario.com
http://www.ritholtz.com/blog
http://blogs.reuters.com/felix-salmon
http://www.nakedcapitalism.com/
http://rortybomb.wordpress.com/
They are all worth a read.
EvolutionaryDesign
Sloegin, you beat me to it, but what would be the viability of demanding Glass-Steagall be reinstated?
Sentient Puddle
Reinstating Glass-Steagall would be good, but not enough. Decoupling savings from investment banking would deal a nice blow to Too Big To Fail and make “shadow banking” much more difficult because investment banks don’t have all kinds of easy capital to do crazy shit with. But Glass-Steagall has one big blind spot: widespread banking failures. We all know one giant bank failing will take down the economy with it, but a bunch of small banks going under will be rather devastating as well. Glass-Steagall can’t do anything about this (see also: S&L crisis of the late 80s).
And that’s just Too Big To Fail. Glass-Steagall won’t discourage banks from doing the “stupid shit” mentioned above, and I think that’s the more important part. The cynical take is that if you take away the easy capital from investment banks, they’ll eventually find some other way to get access to easy capital, do the stupid shit, and bring down the economy again. If you remove the stupid shit from the equation, you’ve solved a lot of headaches.
But this is a thread about calling senators, not for me to wonk out. I’ll shut up now.
Xecky Gilchrist
My senator is Orrin Hatch. I don’t think calling him would do any good even if he bothered to have people answering the phone.
ThatLeftTurnInABQ
Can we boil this down a bit, or prioritize issues, or something? Even just here on this little old blog the messaging on this topic is so all-over-the-map that I have difficulty imagining the folks on the other end of the phone having any take away other than “we hate banks“, which is good as far as it goes, but the GOP has aleady figured out how to put ice skates on that message and make it do a triple-Luntz.
Perhaps “It’s the leverage, stupid” is too simplistic, but something quick and easy to remember is needed fast or the GOP is going to run rings around the Dems on this issue.
Uloborus
I got good ‘ol Mitch. Like with HCR, I don’t *want* him to know what a Democrat thinks is good. But I’m going to read Ezra’s article, ’cause I love being informed and he seems like a very good economist.
Resident Firebagger
You think Barry Wall Street wants real oversight in the financial reform bill? Hahahahahahahahahahahahahahahahahahaha!
lahke
How about telling the congressfolk that lack of financial reform will lead to capital flight? Because I decided to make my next investment in Canada, and I can’t be the only one. All my little US dollars gathered up and ready to go, and then Scott Brown won the election–I realized that not only was Congress NOT going to get to meaningful financial reform, but that voters were buying into the GOP propaganda. If Republicans get their hands on the economy before they get rid of the crazies in their party, our country’s going to pot. Now 10% of my assets are going to be in Montreal, just in case.
Republicans–they think you can tax cut your way to a balanced budget, deregulate your way to financial stability, and, oh yeah, torture your way to safety and security. I don’t understand why people buy this.
Barry Ritholtz
Resident Firebagger: Yes, I do. You are obviously unfamiliar with what I’ve written about the reform that is necessary:
Perhaps you might consider not opining on matters you are
completely unfamiliar with . . .
schooner
@Barry Ritholtz:
I listed your blog and saw his comment, to be honest I thought he was referring to Barry Obama rather than Barry Ritholtz since he didn’t directly address my comment.
If he meant you then he is indeed an idiot.
sparky
@Barry Ritholtz: hey! thanks for showing up here. as you and others have repeatedly observed, the game afoot is to give the appearance of significant restructuring of the markets, including the shadow system, while actually letting the same game continue. the Ds have figured out that they only need put up a show of opposition to the status quo, which then gives the Rs something to oppose, though in real terms both understand this as political theatre.
edit: it’s a rather stunning display of how much of a one-party system we have in this country when the “opposition” party claims that fake reforms go too far. if they really wanted votes rather than cash, they could have advocated for some kind of reform. but, like the Ds, the cash is more important. astounding, really. perhaps this is what it was like in the reign of Louis XIV–courtiers could argue over costumes while the peasants starved.
to throw a match onto the fire, i submit that this dance of fake, symbolic “change” will be exactly the same kind of fake change that we have otherwise been treated to in this country since 2009. the oligarchy will continue its business unmolested by us peasants, who will have a shiny bauble to play with.
it just sucks living in a one-party oligarchy state these days. at least the older versions of the oligarchy had the sense to restrain the looting a bit more. damn the oligarchic boomers to…some place where they can find out what it’s like to be under the thumb of corrupt institutions run by imbeciles.