Remember Wall Street Reform?

Ever wonder what happened to the Dodd-Frank Wall Street Reform Bill? Remember when It became effective on July 21? The Democrats hailed it as landmark legislation that was really tough on the big banks and would prevent a repeat of an economic meltdown. The Republicans said it was anti- business and the meltdown was the governments fault anyway. The banks were against it as it would keep them from “providing their creative services to the public and employers.”

In short, all parties put out pure BS. The issues were apparently too complicated for the daily media to be helpful. So it has remained a mystery to most of the public.

Finally on Dec 28, 2010 Business Week has released an article that attempts to put in understandable format what has happened in the bill. It also discusses the politics and lobbying behind the results. A total of 9 journalists from New York and Washington are listed as contributing to the report. We have to be grateful to Business Week for this difficult but very useful task.

The phase “Wall Street Gets Pretty Much What It Wants” is included in the article headline and portends the sinking feeling citizens will feel as they read the article. The Wall Street victory is confirmed by looking at the record profits at the major banks only two years after their mismanagement led to the economic meltdown and to a comment by an ex-Citibank executive.

“We continue to listen to the same people whose errors in judgment were central to the problem,” said John Reed, 71, a former co-chief executive officer of Citigroup Inc., who estimated only 25 percent of needed changes have been enacted.

The article covers almost all the issues that congress talked about but sadly did little when it came time to write the laws. Like the boy that murdered his parents and then asked for mercy because he was an orphan the banks destroyed the economy with bad management and now fight any regulation on the grounds that it would hurt the recovery.

The biggest laugh of all (if it weren’t so pitiful) is that the banks seem to have convinced many congressmen that they are adding value to the economy with their “innovative” instruments.

Read the article and learn what happened to all that big talk after the lobbyists worked over congress. Remember too big to fail, the revolving door, bringing bonuses into line, banning certain derivatives, and walling off risky ventures from government guaranteed funds? The article discusses the politics and final inaction on all of these.

The only pro-citizen event was the establishment of the Consumer Protection Agency as designed by Elizabeth Warren. The banks fought that desperately but seem to have lost.(as of now). I remember a talk show where the banking representative, fresh from helping the industry set a world record for dumb management, said he was worried about her because she didn’t have enough bank management experience.

Please, surely we aren’t so dumb we will let them do it to us again.

The report is certainly discouraging and confirms that we need a complete rethink on the nature of the organizations that this nation uses to manage its financial infra-structure,

Once again, thank you Business Week.