Frankly, It's Doddering

How to kill the lumbering piece of faux financial reform legislation known as Dodd-Frank in three easy steps.


1. Allow the banks to help write the bill and make it so complicated and long (848 cyber-pages) that nobody will ever read it, let alone understand it.


2. Forget to add how you're going to pay for the actual implementation of all the new rules and regulations. Make sure that you cut funding right away for such already-cozy and inept groups as the Securities and Exchange Commission and the Commodities Futures Trading Commission so they can't even enforce what's already on the books.


3. Make sure that the real stringent parts -- such as forcing banks to have enough capital on hand to back all their risky bets -- won't take effect for years and years and years. This will allow plenty of time for the financial lobbyists to meet with the Congress critters to whittle away the bill even more, conveniently enabling even more bribery in the form of legal campaign contributions, insider trading tips and other stuff we don't know about yet. (It also allows plenty of time for the too big to exist banks to crash again, but that's another story.)


Dodd-Frank was conceived as an empty threat to the Wall Street mafia. It is/was a PR stunt to appease the ravening Main Street masses thirsty for revenge against the miscreants who crashed an entire economy. It's one more instance of the defacto government policy of being perceived as doing the right thing while doing exactly the opposite behind closed doors. 


Big as it was, Dodd-Frank ironically developed a lethal case of anorexia from the moment it was born, suffering from what is known in medical parlance as Failure to Thrive Syndrome. Less than a third of its increasingly emaciated body is actually functioning two years after it squeezed out of the Congressional birth canal. The other two-thirds are either stuck in a constipated clump of corruption, or just poof! disappeared into wherever it is that legislation protecting the hoi polloi goes to die. So I suppose it's all the more pleasantly serendipitous that the Consumer Financial Protection Bureau survived against the lobbying onslaught. Even though its founder (Elizabeth Warren) played the part of sacrificial lamb to get it going.

You can read the entire two-year progress report on Dodd-Frank from the Davis Polk law firm here.

According to the watchdog group Sunlight Foundation, there have already been hundreds of meetings held between the big banks, including Goldman Sachs, Morgan Stanley and JP Morgan Chase, and financial regulators on how best to "improve" or otherwise de-fang and de-fund Dodd-Frank.

Since July 21, 2010 (when the president signed Dodd-Frank), regulators at the three major banking regulatory agencies – Treasury, the Fed and the Commodities Futures Trading Commission (CFTC) – have reported meeting with 20 big banks and banking associations on average a combined 12.5 times per week – as compared to on average just 2.3 meetings with reform-oriented groups. The top 20 banks show up 1,298 times in meeting logs at the three agencies, while groups favoring tighter regulations of the financial markets show up just 242 times.

 CNN Money quotes former FDIC Commissioner Sheila Bair on the ongoing assault by the banker wankers: "All the lobbyists come in and they want this exception or that exception, and [regulators] are accommodating that and they shouldn't during the financial crisis and its aftermath. They need to just tell these folks no."


Hmmm.... since the "Just Say No" campaign worked so well for the anti-drug movement, I can just imagine how effective it will combating the incurable addiction of insatiable greed. The so-called regulators are nothing more than what used to be called "co-dependents" and what the latest TV ads refer to as addicted enablers. (parents who peer into their kids' room and pretend not to notice the glazed eyes and stashes of pill bottles and rolling papers.)


As a matter of fact, the politicians running for election  desperately need what was once touted as "sweeping financial reform" swept right under the rug, because they desperately need the money from the opponents of Dodd-Frank. Take the so-called Volcker Rule, named after former Fed chairman Paul Volcker. It's gone south, following in the footsteps of the man himself, who was banished from President Obama's economic team at the behest of Treasury Sec. Timothy Geithner. The Rule would prohibit banks from making risky bets with customers' money. Had it been implemented, it might have prevented the collapse of MF Global and "loss" of millions of dollars in life savings and pensions of ordinary people.


Meh. The unindicted chief of MF Global is still a major bundler for the Obama Victory Fund. Jon Corzine's main job these days is collecting campaign cash from hedge fund managers who also hate the idea of the Volcker Rule. The plutocratic confidence men need to feel confidence in the unfettered and freely corrupt markets, and there is no politician alive who dares bite the hand that feeds him.


The Volcker Rule, as Sheila Bair so cogently notes, is just one more needlessly complex rule within the doddering Dodd-Frank bundle of complexities: "easy to game and hard to enforce."


But isn't that the whole point? Learn from the resounding half-century of success of all 30 pages of Glass Steagall, and replace it with legislation that is too big to succeed -- ensuring that banks are still too big to fail. Make sure that small banks are unfairly punished for the sins of the big casinos, further paving the way for the gutting of the whole kit and caboodle. It's like the hall of mirrors in a fun house. The result, of course, is that too many people are trapped in the very unfunny chamber of horrors constructed by the rapacious Dr. Moreaus of the financial world -- with continuing maintenance provided by the simpering sycophants in the political sphere. And don't forget the carnival barkers of CNBC and the rest of the corporate media.