What Financial Crisis? Wall Street and Washington collude to sabotage meaningful financial reform

[marmar]

from OnTheCommons.org:



What Financial Crisis?
Wall Street and Washington collude to sabotage meaningful financial reform.

By David Bollier


The koan for our times might be: How can there be a devastating financial crash that produces no serious financial reform? Like all koans, this one is instructive because it forces us to contemplate the deeper reality that lies beneath superficial appearances.

In this case, we must confront our assumptions that our elected officials actually represent the people’s interests; that constitutional authority can trump corporate power in practice; and that the public sector and private sector are completely separate. Oh yes, there is one other naïve belief being unmasked — that Barack Obama is an FDR or Lincoln for our time.

These truths are depicted in miniature by financial reporter Gretchen Morgenson’s account of the toothless financial reform bills now pending in the House and Senate. Her devastating critique in New York Times — exposes the utter inadequacy of the “reforms.”

Even though the legislation checks in at 3,000 pages, both the House and Senate versions “would let Wall Street continue devising financial black boxes that have the potential to go nuclear,” writes Morgenson. “And even if the best of both bills becomes law, investors, taxpayers and the economy will remain vulnerable to banking crises.”

Why? There are many reasons, but one is that big banks want to continue to own the trading venues for exotic financial instruments. This allows them to shape the market, control how transactions are made, and gain access to valuable pricing information. These capabilities let traders inflate prices on derivatives at the expense of less knowledgeable buyers, who cannot compare prices on an open market. As Morgenson points out, auto dealers, airlines and hardware stores have to post their prices to customers and allow comparison-shopping. But for Wall Street, it’s perfectly okay to have opaque dealings. ........(more)

The complete piece is at: http://onthecommons.org/content.php?id=2754

[inna]

1. What a surprise.

Now, a *real* shock would be a meaningful financial reform.

K&R

[Tuesday Afternoon]

2. ho-hum. business as usual. K&R

[Oceansaway]

3. K&R...n/t