|The Dodd-Frank financial reform act, the law designed to clean up the abuses that led to the financial crisis, celebrates its third birthday this month. But only about a third of the rules required by the legislation have been finalized so far, and even those are not going into effect as scheduled. This week provided a perfect example of why that is: The Federal Reserve granted Goldman Sachs a two-year extension to implement a key Dodd-Frank rule that would require banks to move risky trading into separate affiliates that are not backed by the Federal Deposit Insurance Corporation (FDIC). Several other of the nation's biggest banks won the same exemption last month.
Financial reformers are not shocked. "Quelle surprise!" quips Bart Naylor, a policy advocate at the consumer advocacy group Public Citizen. "The Federal Reserve decides to heed the crush of Wall Street lobbyists."
The Dodd-Frank rule, which Goldman Sachs was supposed to implement by July 16, requires FDIC-insured banks to move most of their derivatives trades into separate firms so that when a trade goes bad the bank will have to handle the fallout, not taxpayers. (Derivatives are financial products with values derived from underlying variables, like crop prices or interest rates; they were a major catalyst in the economic meltdown of 2008.) In its request for an extension, Goldman told the Federal Reserve—the main overseer of derivatives dealers—that complying with the deadline would mean the firm would need to either divest or stop a big portion of its swaps trading; a transition period, Goldman said, would be needed to ensure that the rest of the economy is not damaged by the shift. On Tuesday, the Fed agreed.
There is a provision in the Dodd-Frank law that allows banks to request a two-year transition period, if complying with the rule will damage the wider financial system. But banks were already given three years to phase in compliance with the rule. "If the regulators hadn't let them waste [that] three-year period…then they could have been prepared to execute [the rule] in a way that was less disruptive," says Marcus Stanley, policy director at the financial reform advocacy group Americans for Financial Reform. "It's like saying I need an extension on my homework because it would be disruptive for me to to have do it all the night before," he adds. "This is just a generalized excuse for postponing action." [...]
Blast from the Past. At Daily Kos on this date in 2011—What would 62 mpg give Americans? 700,000 jobs and tens of billions of dollars in their pockets:
|The Obama administration has already established a standard 35.5 mile-per-gallon fuel-efficiency average for cars, light trucks and SUVs manufactured in 2016 and beyond. The discussion now is over how much the standard should be increased to by 2025. The administration has slated an announcement on its decision about this for September.
Eco-advocates are seeking a 62-mpg standard. The big car companies, including GM, the one that taxpayers still own one-fourth of, are aghast. It's the usual whine, which comes down to the usual claim: no-can-do, too-expensive, unsafe.
Today's "encore performance" of the Kagro in the Morning show featured coverage of Romney's Hamptons fundraisers, where wacko rich people delighted in screaming from their luxury vehicles about how special they were, and how much they hated poor people. Greg Dworkin discussed polling on the swing state ad wars. And we ran down the exciting post-July 4th recess Congressional agenda (doomed Obamacare repeal bills in the House & cloture votes on whether or not to end debate on beginning debate on jobs bills in the Senate), the Supreme Court's ruling in Knox v SEIU, and some political theory on the origin of voting, and why you owe it to your friends and neighbors to vote.