No one really believed Wall Street and the big banks would actually support the Democrats, right? It’s those pesky Dems who kept shoving Dodd-Frank down every Wall Street banker’s throat. So then it’s even less of a surprise that these same bankers are keeping the Republican candidates’ well endowed with campaign funds.
After all, nothing is really going to change, not really. People will continue to be unethical, greed will continue to be its own living and breathing entity on the Dow floor and the pubs and dems will forever do battle. It’s just the American way. Except – there’s one former Troubled Asset Relief Program watchdog, Neil Barofsky, who says he’s had a bellyful.
So frustrated is Barofsky, that he wrote a scathing editorial for Yahoo! News this week. And as my six year old son says when he realizes I’ve caught him doing something wrong, “Ut oh. He ain’t happy. This ain’t gonna be good.”
In the aftermath of the financial crisis, the country was faced with a choice of what to do with these corporate abominations. Furiously beating back the efforts of reformers who sought to dismantle these monsters once and for all, the Obama administration chose to keep them largely intact. Instead, it sought to control their predatory and dangerous nature through the Dodd-Frank Wall Street Reform Act, a complex set of regulatory shackles that comprised more than 800 pages of legislation and called for hundreds of new regulatory rules. In essence, the administration’s approach was to entrust the regulators to build the perfect set of chains to prevent the banks from recreating financial Armageddon.
And in one fell swoop, the Obama Administration was suddenly no longer the rescuers of the American financial sector and in fact, it is simply attempting to maintain control over a troubled banking system with little consideration over it ultimately should be fixed. Or, as Barofsky wrote about the ulterior motives of the administration,
…the approach was to entrust the regulators to build the perfect set of chains to prevent banks from creating Armageddon.
This editorial has uncovered an entirely new and disturbing mindset: is the Obama Administration really interested in protecting the American taxpayer or has it cornered the collective big bank wit the goal of protecting it from complete reform? Were there true ulterior motives at play all along? Remember: it’s eight hundred pages. Eight hundred! The financial crisis that began in 2007 led to widespread calls for changes in the regulatory system. The purpose of the new law was to create a sound economic foundation to grow jobs, protect consumers, reign in Wall Street, end bailouts that are a result of “too big to fail,” and prevent another financial crisis. The argument could be made that it’s served a purpose; but the fact is, it hasn’t been put to the test.
As [a recent speech by vice president Joe Biden]makes clear, the Obama administration is not walking away from its protection of the big banks through Dodd-Frank (albeit in a somewhat shackled form), and with Wall Street’s campaign dollars pouring into Romney’s war chest, a dramatic shift from him seems equally unlikely.
In August, the SEC announced its first “Whistleblower Award”. It reports it paid $50,000 to an understandably unnamed source for tips that helped the agency prevent millions of dollars of losses to investors. The only problem is, the SEC refuses to release the company’s name, the illegal activity it was involved in, the number of investors affected or any other details that would lend to credibility and transparency – something that’s desperately needed. It’s definitely crucial that a whistleblower’s identity be protected for obvious reasons, but many are wondering why the secrecy and protection efforts for a company that was clearly breaking the law?
Further, the SEC also reported it’s receiving around eight tips a day. So why only one success story? It’s been in effect for one year, so assuming the eight tips a day, five days a week, that’s roughly 2080 tips a year. And just one success story? And then no information on the “success” at all.
Many are beginning to feel Barofsky’s pain. After all, there have been no true solutions for the many social problems. Despite campaign promises from both parties, there have been precious few details associated with those brighter futures both candidates insist they can provide.
If there’s a bright spot in all of these new regulations, it’s the emergency of the Consumer Financial Protection Bureau was which a part of the 2009 CARD Act signed by President Obama. This one consumer agency has not only maintained a healthy transparent business model, but it’s actually reached out to consumers – the American taxpayers – and made significant changes in how their banks treat them and how they are able to resolve problems with the credit card companies. With many success stories and a fearless director who manages to shield his agency from the political brouhaha as much as possible, this could easily be President Obama’s biggest victory as the American president.