EconomicCrisis.US

A U.S. bill to increase regulation of Wall Street took another step towards passage Monday as a second Republican senator said that after some misgivings he would support the legislation after all.

Scott Brown of Massachusetts joined Senator Susan Collins of Maine as two crucial Republican votes for the legislation.

Most Republicans have lined up against the bill.

Democratic leaders were still looking to secure the 60 votes needed. With Collins and Brown, the bill now appears to have the support of 59 senators.

The vote could be delayed beyond this week, until a replacement is named for the late Senator Robert Byrd, who died last month.
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Why regulate a broken system when we can build a better one? Welcome to New Economy 101.

Financial reform is the Congressional political issue of the month. Democrats say their bill will place essential controls on Wall Street to prevent abuse and a repeat of the financial crash. Republicans say it will encourage further Wall Street risk-taking by giving the big banks a guarantee of a future taxpayer bailout if reckless decisions trigger another financial crash.

Each party would have us believe that its side has the better answer about how to prevent another financial collapse, limit future taxpayer exposure, and protect consumers from financial fraud. These are good objectives, but their focus is fixing Wall Street.
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Nearly a year ago, Congress took a decisive step to shore up an economy in free fall by passing the $787 billion stimulus bill. Since then, we have seen millions of Americans enter the ranks of the unemployed, billions of dollars spent on economic recovery, and quarterly growth swinging from the largest decline in a generation to positive territory in the same year.

Cut through all the numbers, though, and this is what you find: The American Recovery and Reinvestment Act saved us from plunging into a second Great Depression.
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Wall Street reform died this week.

It died Tuesday before the Senate Banking Committee from unnatural and illogical causes: the finance lobby, obstruction, fear-mongering and plain ignorance.

Rarely does financial history offer a living, breathing voice of reason in crucial times, but listening to Paul Volcker spell out his plan for reform was such an event. Too bad for all of us, his prescription for reform will be discarded like loan underwriting standards for a multi-family home near Las Vegas.

The former chairman of the Federal Reserve hit the committee like a ghost of banking past — and future — leaving the rule that bears his name on the doorstep of Capitol Hill. His plan is not a pure return to the dreaded Glass-Steagall days, but to those in Congress who are lining up to kill the plan, it may just as well have been that and more.
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