FINANCIAL “REFORM” Passes House Update: Dems Water Down Bill Further To Win Passage

June 30th, 2010 - by: danny

June 30: REPUBLICANS FORCE COMPROMISE: NOW WILL FINANCIAL “REFORM” BILL PASS?”

This afternoon, it did pass the House.

The Washington Post reports:

The House on Wednesday overwhelmingly passed far-reaching new financial regulations, but Senate leaders postponed a similar vote on the bill, preventing the landmark legislation from reaching President Obama’s desk until at least mid-July.

CreditWritedowns carries an analysis By Annaly Capital Management

“The death of Senator Robert Byrd (“an institution within an institution” is what President Obama called him) may be the butterfly wings that alter the financial landscape of the United States. Without him, it is not entirely clear whether there are 60 votes to pass the financial regulatory reform bill. For example, Scott Brown, who voted for the Senate version of the bill, may vote against the final version because of the bank tax; Feingold and Cantwell may not vote for it because they don’t think the bill is tough enough; and the other Republican Senators who voted with the majority on the Senate bill, including the twin Maine senators, are also back in play. So if the votes break according to party lines, it won’t pass. ”

So what did the Dems do? They changed the bill:

Financial Times: US lawmakers scrapped a proposed $19bn bank fee on Tuesday night as Democrats struggled to secure sufficient votes to pass the Wall Street reform bill.

The Hill reports they were “forced to do it.” “Democrats were forced to rewrite part of the Wall Street overhaul bill on Tuesday after objections from Republicans threatened to scuttle the legislation.”

According to the Boston Globe, Senator Scott Brown of Massachusetts played the key role: ”

WASHINGTON – Senator Scott Brown yesterday forced Democrats to remove a $19 billion tax on big banks and hedge funds from the proposed Wall Street regulatory overhaul, the second time the Massachusetts Republican has used his pivotal role in the Senate to influence the legislation in favor of major financial institutions.

After Brown threatened in writing yesterday to oppose the package unless the $19 billion tax was eliminated, House and Senate lawmakers reconvened late yesterday and agreed on a new way to pay for the additional regulatory oversight in the sweeping legislation, which is intended to help prevent another economic crisis like the 2008 market meltdown.

Instead of the tax, Congress would use $11 billion in funds from the 2008 bank bailout, combined with a small increase in bank fees paid to the Federal Deposit Insurance Corp. (DS: That falls short of $19 Billion according to my math.)

MEANWHILE: RECESSION DEEPENS, MARKET DROPS, CONFIDENCE DIPS–A Time For A Hug?

The Washington Posts carries a study about the state of the economy:

“The recession has directly hit more than half of the nation’s working adults, pushing them into unemployment, pay cuts, reduced hours at work or part-time jobs, according to a new Pew Research Center survey.

The economic shock has jolted many Americans into a new, more austere reality, which is likely to have lasting consequences for an economy fueled mostly by consumer spending. More than six in 10 Americans say they have cut down on borrowing and spending, the survey found.

The reason: Nearly half of the survey’s respondents say they are in worse financial shape as a result of the downturn, which destroyed 20 percent of Americans’ wealth.”

And who is going to fix it? The NY Times doubts that the private sector can or will:

” In cutting spending to rein in deficits, governments are effectively betting that the private sector can make up for lost stimulus spending – and the markets are skeptical.”

Speaking of markets: The Dow plunged 286 points yesterday in a major sell-off.

AP analysis: “Investors have been so burned by the financial crisis of 2008-09 that they fear any hint of a slowdown means the economy will start tanking again.”

Paul Farrell offers and analysis on Marketwatch: “tragically for future generations of Americans the guidance system of capitalism’s Invisible Hand has been replaced by the guiding hand of Wall Street: With no public conscience, no soul, no ethics, no moral values, nothing other than the addict’s obsession to get as rich as possible, fast as possible.”

And what about international cooperation in this age of globalization.

It’s not happening, writes economist Simon Johnson on Baseline Scenario:

“It’s the responsibility of government to make the world financial system less dangerous. Judging from the G20 summit this weekend, we are making no progress at all in that direction.

Consumer Confidence DIPS:

AP: Americans, worried about jobs and the sluggish economic recovery, had another relapse in confidence, causing a widely watched barometer to tumble in June.

The Conference Board, a private research group based in New York, said Tuesday that its Consumer Confidence Index dropped almost 10 points to 52.9, down from the revised 62.7 in May. Economists surveyed by Thomson Reuters had been expecting the reading to dip slightly to 62.8.

Joe Bageant : America’s Totalitarian Democracy and the Politics of Plunder

The uniformity on Planet Norte is striking. Each person is a unit, installed in life support boxes in the suburbs and cities; all are fed, clothed by the same closed-loop corporate industrial system. Everywhere you look, inhabitants are plugged in at the brainstem to screens downloading their state approved daily consciousness updates.

In Italy and elsewhere, there’s a new service being offered to the stressed: FREE HUGS.

For more on the crisis as a criminal enterprise, see PLUNDER THE CRIME OF OUR TIME (plunderthecrimeofourtime.com)

I was interviewed yesterday about financial crimes by Laura Flanders on GRIT TV. See my take.

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