Call it whatever you like, but the Senate Republicans caved in to the inevitable and agreed to send the financial reform package to the full Senate for debate.
As I wrote earlier in the week, they were on the wrong side of history on this issue. Meanwhile the heat of being tarred as resistors and a tool of the Wall Street banksters was becoming too much to bear, particularly those Republicans who are up for reelection or those moderates who are not as ideologically pure as their ultra-conservative brethren (and thus the cave in to reality).
So at least there's going to be a debate and let's hope the ultimate reform package of the financial industry will have some teeth, i.e. regulation of derivatives and open transparency of the parties and their transactions; consumer protections against predatory lenders; a reinstatement of Glass-Steagall, the Act that separated the financial investment institutions and the commercial banks enacted in 1933. Glass-Steagall was overturned in 1999 with the enactment of the Graham-Leach-Bliley Act, which destroyed the firewall between the two types of institutions' functions. The contamination and lack of oversight that resulted led to the excesses and the collapse of the sub-prime mortgage market, its bubble bursting, creating the financial meltdown and the subsequent billion dollar bailouts, (not to mention bringing on the "great recession").
Now one is not so naà ¯ve to believe that the financial industry and their army of lobbyists are about to rollover and stop their pressure on those senators (Republicans and Democrats alike) who they bankroll. Far from it; thus it is mandatory for the public to keep its pressure on their lawmakers to produce a far reaching and effective financial industry regulatory measure.
Concurrent investigatory hearings of Goldman Sachs, et al. on the causes of the financial debacle also need to continue in order to highlight the issue and keep it front and center with the public and on the front pages.
It also appears financial reform, unlike health care reform, is less likely to be misrepresented and propagandized; not with the broad spectrum of the public (from far left to far right) who recognize the main perpetrators in the financial industry that need to be reined in.
But, ultimately it is a crucial test of our representative democracy. Can the people's representatives enact laws and regulations of the financial institutions, with oversight, enforcement and accountability that serve the interests of the people and prevent a reoccurrence of our most recent financial meltdown, massive bailout and subsequent economic calamity?
This may be a tall order for this Congress. But if there is such a thing as a "positive perfect storm" this may be the time for it to happen. The financial excesses and abuses were so blatant, so terrible that even these Congressional polarized antagonists (their coming together being the "perfect storm") can do something together and do it right.
Stay tuned.
