July, 12 2011, 11:58am EDT
Report: Wall Street's Opposition to Dodd-Frank Reforms Echoes Its Resistance to New Deal Financial Safeguards
Bedrock Consumer Protections Once Were Flogged as ‘Exceedingly Dangerous,’ ‘Monstrous Systems’ That Would ‘Cripple’ the Economy
WASHINGTON
As the nation approaches the first anniversary of the Dodd-Frank financial reform law, opponents are claiming that the new measure is extraordinarily damaging, especially to Main Street. But industry's alarmist rhetoric bears striking resemblance to the last time it faced sweeping new safeguards: during the New Deal reforms. The parallels between the language used both then and now are detailed in a report released today by Public Citizen and the Cry Wolf Project.
In the decades since the Great Depression, Americans acknowledged the necessity of having safeguards in place to prevent another crash of the financial markets, including the creation of the Federal Deposit Insurance Corporation (FDIC) and the Securities and Exchange Commission (SEC), and laws requiring public companies to accurately disclose their financial affairs. Although these are now seen as bedrock protections when they were first introduced, Wall Street cried foul, the new report, "Industry Repeats Itself: The Financial Reform Fight," found.
"The business community's wildly inaccurate forecasts about the New Deal reforms devalue the credibility of the ominous predictions they are making today," said Taylor Lincoln, research director of Public Citizen's Congress Watch division and author of the report. "If history comes close to repeating itself, industry is going to look very silly for its hand-wringing over Dodd-Frank when people look back."
In 1933, when a law was passed that provided government-backed insurance for most consumers' bank deposits and gave the government authority to take control of failed banks and sell them to solvent institutions, the president of the American Bankers Association called the measure "exceedingly dangerous." With creation of the FDIC, bank failures fell from 4,000 in 1933 to just 52 in 1934.
"Wall Street is still trying to stop the rules that will make our financial system safe," said Donald Cohen, director of the Cry Wolf Project. "It's just like they've been doing for 75 years."
In the 1930s, the financial industry elevated its rhetoric during the debate over the Securities Act of 1934, which eventually established the SEC. The president of the U.S. Chamber of Commerce said requiring publicly traded companies to register their securities with a federal commission would force a company to "sign away its constitutional rights to protect its property rights from being taken away from it without due process of law." Today, the U.S. Chamber of Commerce hails the principles of the 1934 Act.
By 2010, the U.S. Chamber was busy warning, without merit, that Dodd-Frank would harm corner butchers and bakers because "Washington wants to make it even tougher on everyone." Others cast the bill's provisions as "stalking horses" for Washington to intervene in "virtually every facet of the U.S. economy" and even ruses for "kicking conservative media personalities off the air."
In fact, the Dodd-Frank Wall Street Reform and Consumer Protection Act is designed to prevent another Wall Street crash, which really made it tough on everyone by causing massive job loss and severely hurting corner butchers and bakers, as well as retirees, families with mortgages and others. The Dodd-Frank law increases transparency (particularly in derivatives markets); creates a new Consumer Financial Protection Bureau to ensure that consumers receive straightforward information about financial products and to police abusive practices; improves corporate governance; increases capital requirements for banks; deters particularly large financial institutions from providing incentives for employees to take undue risks; and gives the government the ability to take failed investment institutions into receivership, similar to the FDIC's authority regarding commercial banks. Much of it has yet to be implemented.
However the bottom line is that repetition of rhetoric is not adding weight to industry complaints; it is only making clear that it endlessly cries wolf.
Public Citizen is a nonprofit consumer advocacy organization that champions the public interest in the halls of power. We defend democracy, resist corporate power and work to ensure that government works for the people - not for big corporations. Founded in 1971, we now have 500,000 members and supporters throughout the country.
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Palestine's permanent observer at the United Nations said the resolution's failure "will not break our will, and it will not defeat our determination."
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U.S. President Joe Biden's administration on Thursday used the country's veto power at the United Nations Security Council to block Palestine's bid to become a full member of the U.N.
While 12 nations voted in favor of Palestinian membership and two abstained, the United States is one of five countries—along with China, France, Russia, and the United Kingdom—who have veto authority at the Security Council.
Since Israel launched what the International Court of Justice has said is a "plausibly" genocidal assault of the Gaza Strip in response to a Hamas-led October attack, the Biden administration has blocked three cease-fire resolutions at the Security Council. Under mounting global pressure, the U.S. finally abstained last month, allowing a cease-fire measure to pass.
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In addition to the nations Parsi highlighted, Algeria, China, France, Guyana, Malta, Mozambique, Russia, Sierra Leone, and Slovenia voted for giving Palestine full U.N. membership while Switzerland and the United Kingdom abstained.
After the vote, U.N. Newsreported on remarks from Riyad Mansour, a U.N. permanent observer for the state of Palestine:
"We came to the Security Council today as an important historic moment, regionally and internationally, so that we could salvage what can be saved. We place you before a historic responsibility to establish the foundations of a just and comprehensive peace in our region."
Council members were given the opportunity "to revive the hope that has been lost among our people" and to translate their commitment towards a two-state solution into firm action "that cannot be maneuvered or retracted," and the majority of council members "have risen to the level of this historic moment, and they have stood on the side of justice and freedom and hope, in line with the ethical and humanitarian and legal principles that must govern our world and in line with simple logic."
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"Disclose, divest, we will not stop, we will not rest," chanted hundreds of students as they marched around the area where organizers had set up a tent encampment early Wednesday morning.
Columbia President Minouche Shafik informed the campus community on Thursday that she had authorized the police to clear the encampment.
As it has been in the past, the school has become a center of anti-war protests—and crackdowns by school officials and the police—since Israel began its bombardment of Gaza in October.
Pro-Palestinian students and alumni have demanded that Columbia divest from companies that profit from Israel's apartheid policies in the occupied Palestinian territories and cancel its dual degree program with Tel Aviv University.
In response to pro-Palestinian demonstrations, Columbia in November suspended the campus chapters of Jewish Voice for Peace and Students for Justice in Palestine—an action that pushed the New York Civil Liberties Union and Palestine Legal to file a lawsuit on behalf of the students last month.
On Thursday, police and Columbia employees took down about 50 tents that had been up for more than a day and disposed of them in trash cans and alleyways—but The New York Times reported later that "demonstrators repitched a couple of tents, and ... recovered the main signage from the encampment as well," while hundreds of students were "still gathered and chanting on the south side of the grass."
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U.S. Rep. Ilhan Omar (D-Minn.), whose daughter, Isra Hirsi, was among the Barnard students who were suspended on Thursday for participating in the encampment protest, questioned Shafik about whether antisemitic protests have actually taken place at Columbia, prompting the president to say there have not.
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"Correct," replied Shafik.
On Thursday, Omar posted on social media two images of protesters at Columbia: one from the encampment this week, and one from 1968, when students protested the U.S. war in Vietnam.
New York City Council member Tiffany Cabán was among those who condemned the university's crackdown on the protests on Thursday.
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The youth-led Sunrise Movement on Thursday celebrated Bloombergreporting that "White House officials have renewed discussions about potentially declaring a national climate emergency."
The Wednesday revelation came just two days after six young activists were arrested outside Vice President Kamala Harris' Los Angeles, California home to increase pressure on the Biden administration to make such a declaration, which would unlock various federal powers to combat the fossil fuel-driven global crisis.
According to Bloomberg:
Top advisers to President Joe Biden have recently resumed talks about the merits of such a move, which could be used to curtail crude exports, suspend offshore drilling, and curb greenhouse gas emissions, according to people familiar with the matter who asked not to be named because a final decision has not been made.
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