In a floor speech last night, Byron Dorgan let his populist flag fly, slamming the weaknesses in the Wall Street reform bill and urging his colleagues to do better to strengthen "too big to fail" provisions and regulate credit default swaps.
Breaking up banks that are "too big to fail," he said, is one of those things that is "not yet done."
"I know we had one vote and we failed, unfortunately," he said, adding that "it's not about saying 'big is bad.' It is about saying that 'no fault' capitalism doesn't work if you allow financial institutions to become so large that their failure can bring down this country's economy."
"If we don't do something about that," said Dorgan, "we cannot claim ever that we have done something about this system." But, he said, "it appears to me we are not on the way to fixing that."
He continued that the same goes for credit default swaps, and that the Senate needs to "put a dagger in the heart of that kind of intense speculation."
"If we don't fix" the bill, said Dorgan, "and we leave this chamber and this Congress and claim to have fixed it and have not done it, then shame on us. We have a responsibility here."
Dorgan's colleagues should carefully heed his admonitions. Eleven years ago, when the Senate voted to repeal Glass-Steagall, Dorgan sounded a warning, saying then that Congress would "look back ten years time and say we should not have done this." He was joined then in voting no by Sens. Barbara Boxer, Barbara Mikulski, Richard Shelby, Tom Harkin and Russ Feingold, all of whom should be joining him now in supporting the handful of amendments that can fix this system.
After the failure of the Kaufman/Brown SAFE Banking act that would have broken up the big banks, there are just a few amendments that can address the core problem. David Dayen identifies them:
There is no question that lobbyists are gunning for Merkley-Levin, which would end reckless trading out of the proprietary accounts of banks which receive deposit insurance and cheap money from the discount window.... And that amendment is not alone: the Dorgan amendment which would force an advisory board to break up any firm that presents a systemic risk; the Dorgan amendment banning naked credit default swaps; the Cantwell-McCain amendment restoring the Glass-Steagall firewall between investment and commercial banks; the Franken amendment reforming the credit rating agencies. All of these improvements to the bill are legitimate and not cosmetic, and represent the difference between a bill politicians can wave around and a bill that regulators can actually use.
In a promising move, the Senate today approved Franken's credit rating amendment 64-35, despite Dodd's opposition. So there is real hope for this bill to get stronger. In the meantime, Wall Street lobbyists are covering the Senate, trying to line up the opposition to these good amendments.