Back on October 15th, I wrote an article titled, 'The Economy: Don't Drink The Kool-Aid'. In it, I pointed out that banks were actively trying to sabotage any attempt to impose greater discipline or stricter standards of conduct on them (point 3), and that both they and the Administration were covering up the extent of the crisis and their culpability (point 5). I predicted they'd succeed.
Am I a prophet, or what?
A key House committee on Thursday approved the most high-profile part of the White House plan to prevent future financial collapse: The creation of a new agency to regulate consumer financial products.
. . .
After more than a week of debate and changes, lawmakers and consumer advocates claimed victory. Most of the financial industry lobbied to kill it, calling it an unprecedented step toward government intrusion on business.
"This bill has now passed a major hurdle and this step sends an important signal to the American people that we will not stand by and allow big financial firms and their lobbyists to mobilize against change," President Obama said in a statement.
However, the bill was watered down in some key areas from the original Obama administration proposal.
. . .
The biggest change was to allow 98% of the banking industry -- some 8,000 community banks and credit unions -- to keep their current regulators when it comes to enforcing new consumer rules.
"That was a compromise I thought was necessary to get the bill out," said House Financial Services Chairman Barney Frank, D-Mass., at a press conference Thursday. "That's the major area where many of us would like to change that."
Another change: lawmakers allowed some special exceptions to allow federal regulators to overrule stronger state consumer protection laws on a case-by-case basis. The original White House proposal called for empowering states to create tougher laws for the banking industry, even if state laws clashed with weaker federal laws -- a reversal from current practices.
Earlier this month, the panel had already agreed that the panel would not have the ability to mandate simple standardized financial products.
Also, several types of businesses, including some originally envisioned as coming under the agency's authority, would not be subject to its rules. Among these are retailers, auto dealers, lawyers, title insurers and accountants.
Even auto dealers' financing products, which help consumers buy cars, have been exempted. Frank said they plan to fight to reinstate that when the bill goes to the floor.
One amendment to the bill that failed to win enough support would have allowed the agency to do a "financial autopsy" on the problem of bankruptcies and foreclosures, to discern whether financial products were the cause. The bill would then have allowed the agency to ban products.
The next step for the proposed Consumer Financial Protection Agency is a vote before the full House.
There's more at the link.
Yep - the deep pockets of big business have done it again. They've been just as active in the ongoing debate over health care. How active, you ask?
In Congress, committee chairmen are known as the old bulls for a reason: it's unwise to provoke them. So it isn't often that you see one get rolled by his own committee — especially when the chairman in question is the formidable and canny Henry Waxman and the issue in question is one that matters a lot to him. But that was what happened on July 31 as the House Energy and Commerce Committee was putting the final touches on health-reform legislation. Waxman's fellow California Democrat Anna Eshoo offered a last-minute amendment that Waxman opposed. Knowing he would lose, Waxman decided to save face with a quick voice vote. But Eshoo insisted on a roll call, which would put every member on record. Waxman snapped at her, "You promised you wouldn't do that!" The final tally was 47-11 against the chairman.
Waxman's loss that day was a big victory for drug companies, which have spent more than any other segment of the medical industry to make sure that they come out winners in the effort to overhaul the nation's health-care system. It's understandable the drugmakers would want a roll-call accounting of who their friends and enemies are, considering the size of the investment they are making on Capitol Hill: in the first six months of this year alone, drug and biotech companies and their trade associations spent more than $110 million — that's about $609,000 a day — to influence lawmakers, according to figures compiled by the nonpartisan watchdog group Center for Responsive Politics. The drug industry's legion of registered lobbyists numbers 1,228, or 2.3 for every member of Congress. And its campaign contributions to current members of Waxman's committee have totaled $2.6 million over the past three years.
The return on that investment has been considerable, both in the House and in the Senate. "We've done very well," says lobbyist Jim Greenwood, a former Republican Congressman from Pennsylvania who was a member of the Energy and Commerce Committee and now heads the Biotechnology Industry Organization (BIO). "We carried a majority of the Democrats and a majority of the Republicans in each of the committees, and by very clear margins."
Whether the broader public is benefiting from the industry's success is less clear. How Greenwood's group has scored decisive early victories on an obscure but crucial health-care provision is a case study in how interest groups are shaping the contours of health-care reform — and why that's not necessarily good news for consumers.
Again, there's more at the link. Bold print is my emphasis.
US politicians . . . irrespective of party or policy, they're the best money can buy.
It's time we kicked out every incumbent who's been in Congress for more than three terms, or in the Senate for more than two, and replaced them with someone who's had less exposure to the corrupting miasma in the Washington air. A plague on all incumbents' houses!
Peter
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