What do we do with 'captured' regulators?
Brian Beutler over at TPM has uncovered an important truth: A captured regulator who identifies his job as protecting the banking industry is one of the major obstacles to a stronger Volker rule.
The culprit is Thomas Curry, head of the Office of the Comptroller of the Currency.
The way Dodd-Frank was written, it appears that five different agencies have to reach a consensus on how to write a rule forbidding banks to gamble with depositors money. Curry, according to the interview with (D-OR) Senator Jeff Merkley, is the odd man out - possibly giving his financial benefactors a win.
Why is this even news? Follow the jump.
If our goal is to break up the banks; reduce the impact of financial institutions in our economy, and reinstate Glass-Steagall or some equivalent, how can we do that if the banking regulators and the Fed are too cozy with the banks.
We all know the damage done when Bob Rubin (26 years at Goldman Sachs) was Clinton's Treasury Secretary; and the damage that Hank Paulson (24 years at Goldman Sachs), and then Larry Summers (Deputy Secretary of the Treasury under his long-time political mentor Robert Rubin, and then Obama's chief economic advisor), and now Tim Geithner (former head of New York Fed, gave banks $10's of billions by negotiating sweetheart deals where banks got full value for contracts with AIG, despite them being almost worthless, and getting nothing in return) are doing to our economy.
These people - most of whom worked for democrats- are so tied to Wall St. and the financial industry they see no problem with the destruction of 40% of the wealth of ordinary Americans, while banks get off scott free with government making up their losses.
So, we know we cannot expect the lap dogs of the financiers to act in our ultimate interests. But some regulation is better than none, and when an opportunity comes to highlight the malfeasance of regulators - as is currently the case the Comptroller of the Currency, publicizing it, pushing Obama on the issue - and going public all are things that help.
Kudo's to Jeff Merkley for exploding in public.