by Jeff Sovern
Isn’t it great that Occupy Wall Street is pretty much over? Though the truth is in some ways, they did us a favor. You know how a magician will gesture wildly with his left hand so you ignore what he’s doing with his right? Well, Occupy was like the magician’s left hand. We need people to ignore what’s happening in Washington—the magician’s right hand--and because people are more interested in demonstrations than the details of government, they’re overlooked what really counts. And, unlike the magician, we didn’t even have to do anything to make it happen. It’s as if the audience distracted itself. Plus, the occasional bad behavior of the Occupy folks and second-guessing the authorities shifted attention from us too.
What matters, of course, is that we pull the fangs of the Dodd-Frank Act. Take the Consumer Financial Protection Bureau. If it makes good on the goal of protecting consumers—from us--it may reduce our profits. So far, though, the strategy that we and Congressional Republicans are pursuing to cripple it is working beautifully, and most people haven’t even noticed.
I particularly like what we’re calling commonsense proposals to increase accountability. Congress originally arranged for the Bureau’s funding to be independent of the annual appropriations cycle, just other bank regulators. So we’re arguing for accountability by saying the Bureau ought to get funding from congressional appropriations. That way, we can lobby every year to have its budget cut unless it does what we want. It’s the same strategy Fannie Mae used to get power over its regulator. Sure, Fannie and Freddie Mac ended up being so poorly regulated they needed a bailout of $160 billion or so, but in the meantime, they made tons of money for the people running them.
We’re also saying we can increase accountability by changing the Bureau’s leadership from a single director to a five-member commission. Don’t you love the idea of increasing accountability by having decisions made by a three-member majority instead of one person? As if three people represent the public so much better than one. The bill the Republican-controlled House passed says no more than two commissioners can be from the same party, and one commissioner has to be from the Federal Reserve. That would be the same Fed that got the power to stop predatory lending in 1994, but didn’t use it until after the subprime crisis hit. I don’t think we have to worry about them stopping us from making profits. The House bill provides for accountability, all right; accountability to us. Definitely not to the 99%. It gives us a pretty good shot at either capturing the Bureau, or paralyzing it. Either way, the Bureau doesn’t hurt our profits.
The beauty part is that the Democrats will never agree to this. So we’ve disarmed the Bureau. The Bureau has only limited powers until a director is confirmed, and we’re using the Democrats’ refusal to agree to our “commonsense proposals to increase accountability” to justify blocking confirmation of a director. They didn’t have the votes to defeat a filibuster on the director the other day in the vote nobody noticed, and they can’t compromise without undermining the Bureau. Too bad, so sad. Life is full of pain.
And the long run is even brighter. Next time there’s a big consumer protection problem or bailout, we’ll be able to say we tried more regulation, and it didn’t work, so now let’s go for less regulation. Maybe we’ll be able to get rid of the Bureau.
We have only two things to worry about. One is that the president makes a recess appointment of Cordray and it sticks. The other is that the Occupy guys start paying attention to what’s going on in Washington and protest against that. It would be as if the magician’s left hand pointed to his right. But especially now that Occupy is just about done, that will never happen.
Isn’t it great that Occupy Wall Street is pretty much over? Though the truth is in some ways, they did us a favor. You know how a magician will gesture wildly with his left hand so you ignore what he’s doing with his right? Well, Occupy was like the magician’s left hand. We need people to ignore what’s happening in Washington—the magician’s right hand--and because people are more interested in demonstrations than the details of government, they’re overlooked what really counts. And, unlike the magician, we didn’t even have to do anything to make it happen. It’s as if the audience distracted itself. Plus, the occasional bad behavior of the Occupy folks and second-guessing the authorities shifted attention from us too.
What matters, of course, is that we pull the fangs of the Dodd-Frank Act. Take the Consumer Financial Protection Bureau. If it makes good on the goal of protecting consumers—from us--it may reduce our profits. So far, though, the strategy that we and Congressional Republicans are pursuing to cripple it is working beautifully, and most people haven’t even noticed.
I particularly like what we’re calling commonsense proposals to increase accountability. Congress originally arranged for the Bureau’s funding to be independent of the annual appropriations cycle, just other bank regulators. So we’re arguing for accountability by saying the Bureau ought to get funding from congressional appropriations. That way, we can lobby every year to have its budget cut unless it does what we want. It’s the same strategy Fannie Mae used to get power over its regulator. Sure, Fannie and Freddie Mac ended up being so poorly regulated they needed a bailout of $160 billion or so, but in the meantime, they made tons of money for the people running them.
We’re also saying we can increase accountability by changing the Bureau’s leadership from a single director to a five-member commission. Don’t you love the idea of increasing accountability by having decisions made by a three-member majority instead of one person? As if three people represent the public so much better than one. The bill the Republican-controlled House passed says no more than two commissioners can be from the same party, and one commissioner has to be from the Federal Reserve. That would be the same Fed that got the power to stop predatory lending in 1994, but didn’t use it until after the subprime crisis hit. I don’t think we have to worry about them stopping us from making profits. The House bill provides for accountability, all right; accountability to us. Definitely not to the 99%. It gives us a pretty good shot at either capturing the Bureau, or paralyzing it. Either way, the Bureau doesn’t hurt our profits.
The beauty part is that the Democrats will never agree to this. So we’ve disarmed the Bureau. The Bureau has only limited powers until a director is confirmed, and we’re using the Democrats’ refusal to agree to our “commonsense proposals to increase accountability” to justify blocking confirmation of a director. They didn’t have the votes to defeat a filibuster on the director the other day in the vote nobody noticed, and they can’t compromise without undermining the Bureau. Too bad, so sad. Life is full of pain.
And the long run is even brighter. Next time there’s a big consumer protection problem or bailout, we’ll be able to say we tried more regulation, and it didn’t work, so now let’s go for less regulation. Maybe we’ll be able to get rid of the Bureau.
We have only two things to worry about. One is that the president makes a recess appointment of Cordray and it sticks. The other is that the Occupy guys start paying attention to what’s going on in Washington and protest against that. It would be as if the magician’s left hand pointed to his right. But especially now that Occupy is just about done, that will never happen.
It is in fact interesting that people's attention is attracted but what is noisy and disturbing and not but what is important. That's the way it is. It's like in the hospital, medical staff runs to the person who is screaming and not necesseraly towards the one who is really suffering but calm.
Posted by: Non profit credit help program | Friday, July 27, 2012 at 12:11 PM
anyone who thinks OWS is "over" is seriously out of the loop.
it takes a little time for a movement to form. this one is not going away.
it will confront these issues. the more advantage the bankers try to take, the more they destroy the economy, the worse people's living and working conditions and unemployment gets, the more OWS will grow. the bankers don't seem to realize that OWS is feeding on their greed and turning it into power. the more their greed grows, the more power the people will show up with. and it will be at the perfect time.
the bankers don't care what destruction they have wrought in the society that nurtured and raised them. they should be praying now that the nonviolence and respect for others that OWS carries as its primary ethos prevails, or there shall be violence and hell to pay--for all.
Posted by: aletheia33 | Wednesday, January 04, 2012 at 02:12 PM
In my entire lifetime of 60 years, I have never witnessed another appointment that was more intensely lobbied for by the general public than that of Elizabeth Warren to head the Consumer Financial Protection Bureau. And yet you claim what? That we weren't paying attention?
No, paying attention to Washington doesn't work anymore. Washington must be replaced. Occupy Wall Street may not be the ones to do this, but for the time being, they are the only game in town, because they are the only ones who are trying. All of the rest is simply content for cable TV news and other clown shows.
Posted by: Benedict@Large | Wednesday, January 04, 2012 at 08:31 AM
Were it so easy to attribute all of the Congressional misdeeds to the distraction of OWS. The reality is that Congress was doing just fine at protecting its funding sources before the movement started. The Congress & the GOP have become pros at obfuscation.
Yes, I am lumping the Dems in with the GOP. How many straight party votes were there is either house? If the Dems had voted as a block, perhaps there would have been better transparency to the public. With mixed votes neither side could claim it was voting to protect us and the U.S.
Even the current rhetoric about the financial mess being Pres. Obama's problem is "bending" reality. Einstein would be proud. This is the "VERY Special Theory of Relativity". Sure Obama is now President so he can be blamed, but remember that Lehman failed BEFORE the election - just think of the news footage showing John McCain stopping his campaign to go to D.C. to see if he could help fix the problem (remember the "Keating 5").
It was reported that the auto finance and credit card industries spent more than $50M to get the Bankruptcy laws changed in 2005. How much was it worth the so-called banking industry to scuttle any attempts to bridle it? What's worse, is that there were so many new ideologues, who would have paid their entire salary (first year only) to have the ability to have the business of the Congress come to a screeching halt - Fed Debt Ceiling, Fed spending bills, Healthcare, Banking Reform (at least define what a bank is - Lehman wasn't nor is Goldman Sachs or other such entities), Consumer Protection, and other "For The Public Good" programs. Oh, and they also were the - "well heck, just stop federal spending on everything except keeping those furrin' outsiders outside. After all, this Country is for us Americans - natives to this Country - OOPS!!"
Yes, OWS was a distraction but mainly because it and they had no stated or even hinted-at goal. Disrupt stock trading? Make millionaires pay more tax? Stop the War sorry, my age is showing)? Move to full employment? Well, maybe it was to promote the outdoors like camping and littering?
As usual Mr. Sovern has hit a sore subject. Unfortunately reality often is just that.
Richard Isacoff
rii@isacofflaw.com
Posted by: riisacoff | Tuesday, January 03, 2012 at 10:04 AM