IS THIS AN AGE OF FINANCIAL REFORM OR PLUNDER WITHOUT END?
Will All The Financial Reforms Lead to Change or Just Prop Up the Status Quo?
By Danny Schechter
New York, New York: It is almost axiomatic to argue that renewal comes out of chaos. And reform and change are born in crisis.
The financial meltdown of 1907 led to the formation of the Federal Reserve Bank. The Crash of ’29 ushered in the New Deal, the FDIC, the SEC, and The Glass Steagall Act etc. Even the disaster at Enron permitted new statutes requiring more transparency like Sarbanes Oxley. And now this greatest of great recessions is leading to a new wave of financial regulation. The public is already said to believe recovery is just around the next corner.
So, relax we are told, read your history books and recognize that disruptions of the established order lead inexorably to the measures to fix it, to stabilize it, to restore it, to renew confidence, to get the economic engines going again. So what if it takes money? Sure it will be expensive, but what’s a few trillion between friends?
President Barack Obama has already warned us that not everything will work out but promised you can trust his team will do its best. Some progressives see this crisis as a time to push a reform agenda but few organizations have engaged these issues directly.
So far, the winds of reform, however mild, are blowing, and some think, blowing up a storm. The Credit Card Bill has passed, never mind that it doesn’t cap interest rates or go into effect for a year. A new financial fraud bill was passed mandating an investigation by Congress. Said Obama: “the commission was important so that we make sure a crisis like this never happens again."
So far so good, or so it appears.
Scratch deeper and you find questions and contradictions that make you wonder if any of this is really about change, or just restoring a flawed and failed system that has imploded stoking public anger.
When the music stops, who will still be standing and in control?
Let’s start with the Financial Crisis Commission which will emerge from a divided Congress more used to the arts of unprincipled compromise than the unfettered search for truth. As we know from the 911 Commission, bi-partisan panels don’t necessarily find answers to tough questions.
Isaiah Poole contends on Our Future.org that public vigilance is the only guarantee of a process we can believe in.
”What's also clear is that we will have to watch the watchdog. The administration could hamstring this commission with constitutional privilege claims, and Republican appointees could cripple the commission to score political points and protect its Wall Street bankrollers. Finally, a media preoccupied with what it perceives to be sexier issues and weakened in its capacity to do its own investigative journalism could allow the commission's work to fall into obscurity, thus robbing it of its power to drive fundamental reforms. We will have to be ready to push the commission to confront the tough questions; to call out the obstructionists, regardless of who they are; and to amplify the commission's findings as we forge new and better rules for our economy.”
And what of the economic “stabilization” measures that have poured taxpayer money into the coffers if the very institutions that wrecked the economy in the first place? Andy Kroll argues on TomDispatch.com that these measures are a swindle, restoring Wall Street and propping up a broken financial system:
“The legislation's guidelines for crafting the rescue plan were clear: the TARP should protect home values and consumer savings, help citizens keep their homes, and create jobs. Above all, with the government poised to invest hundreds of billions of taxpayer dollars in various financial institutions, the legislation urged the bailout's architects to maximize returns to the American people.
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