FacebookTwitterGoogle+RedditEmail

The Prospects for Real Financial Reform Remain Remote

by ANDREW COCKBURN

Anyone who believes that Goldman Sachs is made up of coldhearted calculating machines, with scant room for any human emotion apart from avarice, should have been monitoring the firm’s most recent global videoconference.   This is a quarterly event in which senior executives address the firm’s managing directors assembled at their various far-flung outposts around the planet.  These are normally sober events, but this time, so I am reliably informed, Goldman CEO Lloyd Blankfein was given a standing ovation by the hundred or so executives – “reportedly a first time for such emotional release in the reptile cage” reports one close observer of Goldman culture.

The fact that Goldman stock was rising — the firm was worth an extra $549 million by day’s end — even as Blankfein and various underlings were being grilled by Carl Levin and others on their misdeeds indicates how little the bank has to fear from the people’s wrath, muffled as it is by the administration and congress.  After all, the real threat of Blanche Lincoln’s killer provision on derivatives trading, lurking like a nuclear suitcase in the financial “reform” bill, is already rapidly going away.

As I reported last week, Lincoln introduced this provision, which effectively implements the “Volcker rule” – ballyhooed and then forgotten by Obama a while back – excluding the banks from their most profitable line of proprietary trading in derivatives — in a fit of pique at Tim Geithner.  Word in the lobbying community is that her lapse from normal subservience to Wall Street’s command was deeply gratifying to Pat McCarty, Chief Counsel to Lincoln’s Agriculture Committee.

McCarty has reportedly long chafed at crafting legislation implementing the bankers’ dictates, so it was with great pleasure that he, at Lincoln’s request, told the committee, as well as the lobbyists packing the room, that the bill would deprive derivatives traders of access federal bank insurance programs, especially all those nice bailout vehicles such as the Fed’s discount window, not to mention the deposit guarantee from the FDIC, thus effectively driving JP Morgan etc out of the business.

On the other hand  it is hardly possible that Lincoln, still less her fellow Democratic senators, have really decided to usher in the communist revolution by wiping out the banks’ major source of trading profits.  Nor will the White House or Treasury  permit this to happen.  We know this because New York Senator Kirsten Gilliband has been telling emissaries from Barclays Plc so, adding that it would never get through the senate anyway. This was very welcome news for the emissaries, conscious as they were that the top five Wall Street banks made $28 billion in profits from derivatives trading last year, and they rushed to pass on the good news to clients.
Lincoln’s populist lunge hasn’t done her much good in Arkansas, where the latest polls put “Bailout Blanche”  further behind her primary (May 18) and general election opponents than ever.

For a few days this week it looked as if the senate Democrats could afford to pose as the flails of Wall Street while the Republicans obligingly blocked debate on the reform bill.  Now that the Republicans have abandoned that strategy, we can assume that Blanche’s provision will be taken into a back room and quietly smothered in the interests of bipartisanship.

ANDREW COCKBURN is the co-producer of the feature documentary on the financial catastrophe American Casino.  He can be reached at amcockburn@gmail.com

WORDS THAT STICK

 

Andrew Cockburn is the Washington editor of Harper’s Magazine.  An Irishman, he has covered national security topics in this country for many years.  In addition to publishing numerous books, he co-produced the 1997 feature film The Peacemaker and the 2009 documentary on the financial crisis American Casino.  His latest book is Kill Chain: The Rise of the High-Tech Assassins (Henry Holt).

More articles by:

CounterPunch Magazine

minimag-edit

bernie-the-sandernistas-cover-344x550

zen economics

January 18, 2017
Gary Leupp
The Extraordinary Array of Those Questioning Trump’s Legitimacy (and Their Various Reasons)
Charles Pierson
Drone Proliferation Ramps Up
Ajamu Baraka
Celebrating Dr. King with the Departure of Barack Obama
David Underhill
Trumpology With a Twist
Chris Floyd
Infinite Jest: Liberals Laughing All the Way to Hell
Stansfield Smith
Obama’s Hidden Role in Worsening Climate Change
Ron Leighton
Trump is Not Hitler: How the Misuse of History Distorts the Present as Well as the Past
Ralph Nader
An Open Letter to President-Elect Donald Trump
Binoy Kampmark
NATO and Obsolescence: Donald Trump and the History of an Alliance
Zarefah Baroud
‘The Power to Create a New World’: Trump and the Environmental Challenge Ahead
Julian Vigo
Obama Must Pardon the Black Panthers in Prison or in Exile
Alfredo Lopez
The Whattsapp Scandal
Clancy Sigal
Russian Hacking and the Smell Test
Terry Simons
The Truth About Ethics and Condoms
January 17, 2017
John Pilger
The Issue is Not Trump. It is Us
John K. White
Is Equality Overrated, Too?
Michael J. Sainato
The DNC Hands the Democratic Party Over to David Brock and Billionaire Donors
John Davis
Landscapes of Shame: America’s National Parks
Andrew Smolski
Third Coast Pillory: Politicians and Rhetorical Tricks
Chris Busby
The Scientific Hero of Chernobyl: Alexey V. Yablokov, the Man Who Dared to Speak the Truth
David Macaray
Four Reasons Trump Will Quit
Chet Richards
The Vicissitudes of the Rural South
Clancy Sigal
“You Don’t Care About Jobs”: Why the Democrats Lost
Robert Dodge
Martin Luther King and U.S. Politics: Time for a U.S. Truth and Reconciliation Commission
Jack Sadat Lee
I Dream of Justice for All the Animal Kingdom
James McEnteer
Mourning Again in America
January 16, 2017
Paul Street
How Pure is Your Hate?
Jeffrey St. Clair - Alexander Cockburn
Did the Elites Have Martin Luther King Jr. Killed?
Robert Hunziker
Global Warming Clobbers Ocean Life
Patrick Cockburn
The Terrifying Parallels Between Trump and Erdogan
Kenneth Surin
The Neoliberal Stranglehold on the American Public University
Lawrence Davidson
Is There a Future for the Democratic Party?
Douglas Valentine
Who Killed MLK Jr?
Robert Fisk
The Foreign Correspondent in the Age of Twitter and Trump
Dale Bryan
“Where Do We Go from Here?”
David Swanson
The Deep State Wants to Deep Six Us
Dan Bacher
Obama Administration Orders Speedy Completion of Delta Tunnels Plan
Mark Weisbrot
Obama Should Make Sure that Haitian Victims of UN-Caused Cholera are Compensated
Winslow Myers
The Light of the World
Bruce Mastron
My Latest Reason to Boycott the NFL: Guns
Weekend Edition
January 13, 2017
Friday - Sunday
Gregory Elich
Did the Russians Really Hack the DNC?
Jeffrey St. Clair
The President Who Wasn’t There: Barack Obama’s Legacy of Impotence
Anthony DiMaggio
Ethics Fiasco: Trump, Divestment and the Perversion of Executive Politics
Joshua Frank
Farewell Obummer, Hello Golden Showers
Paul Street
Hit the Road, Barack: Some Farewell Reflections
FacebookTwitterGoogle+RedditEmail