Dodd-Franks Bill Passes--BFD Take Two

The Wall Street Reform bill finally was allowed to be voted on by a 60 to 38 margin and the actual bill passed again with 60 in favor and 38 against. And true to form, John Boehner vows to repeal it in the next congress and Lamar Alexander wants to do the same in the Senate. President Obama will sign the bill next week. It has been hyped as the most major reform of our financial system since the Great Depression. Actually alot of it is returning to the regulatory state we had before the early 1990s. While critics claim that it still allows Too Big Too Fail, that's not technically true. Regulators are allowed to step in if a bank looks like it will threaten the health of our economy as many did during the 2008 meltdown. But there are many safeguards built into the bill, which at least will prevent a regime of Great Panics, which the Republicans appear to want.

Like alot of reform bills, this will be as good as it is implemented in reality. What's important now is the designation of a forceful head of the first Consumer Agency, which is the most visible and public friendly innovation in the bill. Hopefully, Washington rumors will turn out to be true with the nomination of Elizabeth Warren, who said in the past if the Consumer Agency was not in the bill she wanted to see lots of blood and teeth on the Senate floor.

The bill is already being blasted by Huffington Post and others as not going far enough, just like the healthcare bill. But it is a major accomplishment, even if it doesn't pay immediate dividends for the Democrats. Senator Chris Dodd saved the best for his last year with this bill and also his major work on Healthcare reform. And Barney Frank's work on the reconciliation conference saved many of the tough measures that were not watered down in the Senate.

Meanwhile, BP has announced it has finally stopped the flood of oil into the Gulf. While the announcement is provisional, pending further tests, it is welcomed news. Now maybe we can finally start evaluating the total damage done to the ecosystem and move forward with the Senate's clean energy bill.

Ayn Rand confidente and disciple Alan Greenspan today announced that the Bush tax cuts for the rich should not be continued.

And another poll shows that the American people by wide margins reject the idea that Social Security has any consequences for the national debt and want it maintained, especially given the current Deep Recession. In fact, they are right, Social Security only runs into problems in the year 2037 but the United States took 2 trillion out of it to pay for the deficits during the W years. On paper, everything is fine. It was Ronald Reagan in 1983 who ensured that Social Security would pay for the baby boomers with the bipartisan agreement reached then. the idea in the Clinton years was that the budget surplusses would stabilize Medicare for the future.

Another Big F#*&King Deal

After a twenty-hour marathon session, where members fell asleep and the staff ran out of paper, the Dodd/Frank Act finally reached its final language. Last night's session, which broke around 5 a.m. saw slight changes to the so-called "Volcker Rule", which would have banned federally insured frims from trading on their own accounts, and a fierce war over Blanche Lincoln's strict derivatives regulation. After New York Democrats threatened to walk unless there was a compromise, there was some modification of the derivatives' language. But at the end of the day, the Wall Street Reform bill was tougher than President Obama wanted or needed.

Final votes are expected next week in both the House and the Senate and the bill should make it to the President's desk by the July 4th deadline. I have no idea if Republicans can filibuster it in the Senate. The problem they would have is that, unlike healthcare, this bill has widespread popular support and openly siding with the banks would not look good even to their base.

President Obama hailed the bill as giving him "90%" of what he wanted. If the bill passes, the 111th Congress will be able to boast one of the most prolific records in domestic reform. The stimulus, the healthcare bill, the reform of student loans, and now Wall Street reform make it one of the most productive congresses in recent memory.

I wrote before that 2,500 lobbyists were working to kill the regulations on derivative trading. NPR reported for the last negotiating sessions there were 5,000 lobbyists employed. I am amazed that the congresspeople managed to withstand the onslaught and produce anything meaningful.

If Elizabeth Warren supports the new Consumer Agency, even if it is in the FED, then I'm for it.

Whether in fact this is the most meaningful financial reform since the Great Depression, I have no idea but it is alot more useful than some of the blogs such as Huffington Post claim.

Bravo to Rep. Barney Frank and Senator Chris Dodd for a real legislative accomplishment.

And now while the country moves ahead on this issue, the Party of No managed to kill through filibuster extending unemployment insurance to about 1 million people, tax breaks for small businesses and funding to states to save the jobs of thousands of schoolteachers, firemen and police. Mitch McConnell claimed this altruistic action was because of the deficit. Republicans warmed the hearts of everyone by referring to the unemployed as hobos,lazy and drug abusers.

Are we really going to return nasty, mean-spirited people to power? I find it difficult to believe that this type of narrow-minded thinking really will be a winning formula. Maybe I just get a blast at seeing my government accomplish something.

It's All Over But The Counting!

Allan Lichtman has a tradition of making early election predictions based on his Keys to the White House. Lichtman developed his Keys in collaboration with Volodia Keilis-Borok, a world reknown authority on the mathematics of prediction models. Retrospectively, the keys accurately account for the results of every presidential election from 1860 through 1980. Prospectively, the keys predicted well ahead of time the popular-vote winners of all seven presidential elections from 1984 through 2008.

Lichtman's keys show that the choice of a president doesn't turn on debates, advertising, speeches, endorsements, rallies, platforms, promises or campaign tactics. The presidential elections are primarily a referendum on the party or person holding the White House.

For Lichtman , the enactment of the landmark health care reform bill secures the important Policy Change Key 7 (wonderful way to think about it) and it means that the Democratic Party has only four of the keys against it--six are considered fatal. So, according to this model, President Obama can even endure a serious setback and still win re-election. And the Democratic ocratic can reverse any key against it at this point.

On the negative side, President Obama could face a scandal or an unexpected foreign policy disaster. Or the economy would slide back into recession in election year. However, all he needs for Lichtman is a foreign policy triumph--say capturing or killing bin Laden; or robust economic growth and he averts any possible defeat.

In this his earliest predicton, he calls Barack Hussein Obama the winner of the 2012 Presidential elections. He emphasized the healthcare bill solidified the most critical key in his model. His model has never been wrong so here's hoping.

So from the professor at American University, let's go to the Obama-meter. This measures how President Obama is fulfilling the 504 promises he made during the campaign. I tend to think the Obama-meter is rather tough in their judgments. But here's the take: 110 kept;34 compromised;19 broken;82 currently stalled;256 in the process of being fulfilled; and only 3 not started. That's still not bad for someone who hasn't been in office for 18 months. It looks like at the time of his re-election bid, he will have fulfilled or partially kept over 400 of his promises.

The three outstanding are 1. Direct rebuilding efforts from the White House after a catastrophe; 2. appoint a Chief Financial Officer to oversee a disaster; and 3. invest $50 billion into the manufacturing of more efficient cars.

When I come up for air, I'll talk about the continuing blather of bummertude. Just shut off the tube and radio on the Kagan nomination. She only needs 1 Republican vote to get to a vote in the Senate. Everything now is just noise.

I must say I have been impressed by Senator Dodd, someone whom I have always opposed in foreign policy, and his management of the Financial Reform package making its way to the finish line. This is one of those pieces of legislation ,which is monumentally significant, but which no one will ever be able to explain to anyone's political advantage. I'm not sure after all the serious work on the bill and the amendments that the Republicans have the cojones to try and block it. It also occurred to me that there are no longer any Republicans--either members of Congress or staffers--who can actually write a serious piece of legislation. This became very obvious during the healthcare debate and it's very obvious now during the debate over amendments to the Financial Reform package.

No we are not Greece but we can't let the deficit hawks use the European problem as a pretext for gutting social security and Medicare. The more that comes out about the Republican plan the worse it gets--it would solve our deficit problem--with a draconian austerity program and the elimination of entitlement programs--in... drumroll--70 years! This is alot like the Long War program under the Bush Administration. Totally impractical and unable to sustain political support beyond the moment.

And the mid-terms get uglier than ugly. More later.