Sen. Smith, if you want to know how to get Oregon and the U.S. back on solid ground, listen to people like Bill Black, not to the financial lobbyists.
We need Jeff Merkley to get us out of the mess that Sen. Smith helped create with Smith's support of Gramm-Leach-Bliley.
Sen. Smith, if you want to know how to get Oregon and the U.S. back on solid ground, listen to people like Bill Black, not to the financial lobbyists.
We need Jeff Merkley to get us out of the mess that Sen. Smith helped create with Smith's support of Gramm-Leach-Bliley.
Good legislators find a pool of honest brokers well outside the world of lobbyists to advise them on complex legislative issues critical to the public interest like banking and finance.
One of those on my experts list was William K. Black who fought for the public interest as Director of Litigation for the Federal Home Loan Bank Board during the S & L crisis and Keating Five scandals of the 1980s, which many of you may recall looked like this:
Bill wrote a great read called The Best Way to Rob a Bank is to Own One I saw him present at a criminology conference. We talked and I called on him during the 2005 session for advice on issues that came before me on the Business, Labor and Consumer Affairs Committee.
So what does Bill say about the shape we’re intoday? Here’s a clip from what he wrote in December of last year for Dollars and Sense.
Over two decades of intense merger and acquisition activity has left a far smaller number of banks, with assets far more concentrated in the largest ones... At the same time, nonbank businesses that lend, save, and invest money have proliferated, as have the products they sell: a vast array of new kinds of loans and exotic savings and investment vehicles. And the lines have blurred between all of the different players in the industry—between banks and thrifts (e.g., savings and loans), between commercial banks and investment banks. These changes were made possible by the deregulation of the industry. Bit by bit, beginning in the 1970s, the banking regulations put into place in the wake of the Great Depression were repealed, culminating in the Gramm-Leach-Bliley Act in 1999, which removed the remaining legal barriers to combining commercial banking, investment banking, and insurance under one corporate roof.
It’s no surprise that Sen. Smith voted for the Gramm-Leach-Bliley Act. He voted for it when it passed through the senate when every senate Democrat voted against it. He voted for it a second time after it went to conference committee.
Sen. Smith justifies his vote by saying that others too thought it was a good idea, which sounds like his justification for voting for war in Iraq.
Smith owes voters a real explanation, but whatever his reasons, the fact is we need to elect Jeff Merkley to get us out of the mess that Sen. Smith helped create.
Would Merkley have voted for Gramm-Leach-Bliley Act. No way.
I served as one of Merkley’s lieutenants when he took the Oregon House in a fundamentally new direction when we regained a Democratic majority in 2006 -- a direction based on the public interest. In previous jobs, Jeff was a Director of Habitat for Humanity and a housing manager for the nonprofit Human Solutions. As the new House Speaker, I saw that he understood housing finance and he knew how hard-working people were being conned by bad actors in the mortgage industry, bad actors in the banking industry and bad actors in the various shadow banking systems that made up the rest of the United Financial Lobby (they actually call themselves that -- the United Financial Lobby-- and they have a solidarity about them that those of us in the labor movement could only hope for).
It's not that the people that worked at these places were bad people. The institutional framework provided by Sen. Smith and others was just all wrong and provided some incredibly perverse and potentially criminal incentives.
And Jeff knows bullshit when he sees it. Can smell it a mile away.
And I can tell you this: the United Financial Lobby hates Merkley. Hates him. Merkley drove predatory pay-day lenders out of Oregon. He beat the odds to pass a mortgage-lending reform bill through the House in the 2008 supplemental session that unfortunately died in the senate. But Merkley clearly has a history for standing up for everyday people. I've seen it firsthand.
But what does Bill Black think Congress should do next? And what should we as Oregonians do to affect the financial mess that Sen. Smith helped create?
In The Nation , Black and Galbraith wrote:
Something must be done--but on what terms? Treasury proposes to spend $700 billion to purchase mortgage-backed securities, accountable to no one. Secretary Paulson asks for trust. But has he earned it? Remember: he started out in office gutting the Sarbanes-Oxley Act; he tried to cripple the SEC, and only two weeks ago he relied on Morgan Stanley--not a disinterested party--for advice on the nationalization of Fannie Mae and Freddie Mac.
They list eight public-interest protection clauses that must be included in the Paulson bailout. They close with:
Is this all? No, it's only a start. Other measures must follow, including comprehensive regulatory reform, mortgage relief, revenue sharing to protect state and local public spending as property tax revenues tank, support for public capital investment and job creation. These are however the agenda for the next administration.
Getting to that next administration is the job now for the American people.
And getting to that next senate that works in the public-interest is the job now for Oregonians.
Vote Merkley. Donate Merkley.
