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The Robert E. Rubin wing of the Democratic Party, the "Establishment Dems"
The banks have fought their war against financial reform on four fronts.
They have pushed for delays, lobbied allies in Congress to repeal aspects of Dodd-Frank, worked over regulators to make the rules as loose as possible and threatened legal challenges and filed lawsuits.
The battle has been overwhelming, with a scrappy band of pro-reform rebels outnumbered and overpowered by the empire's resources. The public appears to be on the side of the insurgents, but perhaps can't follow or understand debates about whether "swaps" — what are those? — should be "pushed out" or not — what's that? (English translation below.)
During all of these fights, the banks have had a stalwart ally holding back greater reform: Establishment Democrats.
Such Democrats, the Robert E. Rubin wing of the Democratic Party, opposed moves to break up the big banks after the 2008 global crisis. These stalwarts prevented a reinstatement of the Glass-Steagall separation of commercial and investment banking.
Of course, most Republicans opposed such bold moves, but they weren't in control of Congress in the immediate aftermath of the crisis. The lack of sweeping financial reform begins at the top. President Obama did not back such a vision, and his administration has repeatedly put forward nominees with Wall Street connections for major oversight roles.
If the Obama administration had taken a different stance, financial reform would have been stronger. Indeed, the White House actively squelched efforts for broader reform. During the debate over the Dodd-Frank Act, for example, the administration lobbied against an amendment offered by Democratic Sens. Sherrod Brown of Ohio and Ted Kaufman of Delaware to cap the size of banks.
As detailed by "Act of Congress: How America's Essential Institution Works, and How It Doesn't," a 2013 book by the Washington Post reporter Robert G. Kaiser, Dodd-Frank was built mostly on legislation and ideas that were developed before the crisis, not after.
The Obama administration sees it differently, of course. To the president, the law is a signature achievement, capped by the creation of the Consumer Financial Protection Bureau, an entire agency to protect the little guy from financial predators.
All the while, the Obama administration, Sen. Charles E. Schumer, D-N.Y., and the other Rubinite leaders of the Democratic Party could tell themselves a story that they were standing firm against the Visigothic know-nothings of its populist wing.
So that's the story of how the American public got a law of incremental tinkering with existing rules. Dodd-Frank is the Clement Attlee of legislation: a modest law with much to be modest about. This history and context needs to be understood to grasp what is happening now.
Republicans have taken over Congress. Among their early acts has been to deliver for the banks. After splitting their contributions more or less evenly for years, the financial industry switched to favor Republican candidates. In the last two election cycles, 62 percent of finance sector donations in 2014 and 69 percent in 2012 went to Republicans.
Even before Republicans secured control of the Senate, their counterparts in the House attached an amendment to a must-pass budget bill to avert that pesky "swaps push out" that I referred to above.
The arcane phrase refers to a provision in Dodd-Frank that required government-insured banks to "push out" the riskiest derivatives (like metals and energy swaps) into a separately capitalized unit. The idea was to insulate financial institutions from the effects of a volatile transaction gone wrong. In the new year, House Republicans have pushed a series of provisions aimed at gutting financial reform. Excuse me: The proper terminology, according to the Republican supporters, is "technical corrections."
Not only that, but many Democrats support these "fixes." Plenty of moderate Democrats are lily-livered about taking on the banks....
http://www.propublica.org/thetrade/item/obama-stands-at-crossroads-on-financial-reform
They have pushed for delays, lobbied allies in Congress to repeal aspects of Dodd-Frank, worked over regulators to make the rules as loose as possible and threatened legal challenges and filed lawsuits.
The battle has been overwhelming, with a scrappy band of pro-reform rebels outnumbered and overpowered by the empire's resources. The public appears to be on the side of the insurgents, but perhaps can't follow or understand debates about whether "swaps" — what are those? — should be "pushed out" or not — what's that? (English translation below.)
During all of these fights, the banks have had a stalwart ally holding back greater reform: Establishment Democrats.
Such Democrats, the Robert E. Rubin wing of the Democratic Party, opposed moves to break up the big banks after the 2008 global crisis. These stalwarts prevented a reinstatement of the Glass-Steagall separation of commercial and investment banking.
Of course, most Republicans opposed such bold moves, but they weren't in control of Congress in the immediate aftermath of the crisis. The lack of sweeping financial reform begins at the top. President Obama did not back such a vision, and his administration has repeatedly put forward nominees with Wall Street connections for major oversight roles.
If the Obama administration had taken a different stance, financial reform would have been stronger. Indeed, the White House actively squelched efforts for broader reform. During the debate over the Dodd-Frank Act, for example, the administration lobbied against an amendment offered by Democratic Sens. Sherrod Brown of Ohio and Ted Kaufman of Delaware to cap the size of banks.
As detailed by "Act of Congress: How America's Essential Institution Works, and How It Doesn't," a 2013 book by the Washington Post reporter Robert G. Kaiser, Dodd-Frank was built mostly on legislation and ideas that were developed before the crisis, not after.
The Obama administration sees it differently, of course. To the president, the law is a signature achievement, capped by the creation of the Consumer Financial Protection Bureau, an entire agency to protect the little guy from financial predators.
All the while, the Obama administration, Sen. Charles E. Schumer, D-N.Y., and the other Rubinite leaders of the Democratic Party could tell themselves a story that they were standing firm against the Visigothic know-nothings of its populist wing.
So that's the story of how the American public got a law of incremental tinkering with existing rules. Dodd-Frank is the Clement Attlee of legislation: a modest law with much to be modest about. This history and context needs to be understood to grasp what is happening now.
Republicans have taken over Congress. Among their early acts has been to deliver for the banks. After splitting their contributions more or less evenly for years, the financial industry switched to favor Republican candidates. In the last two election cycles, 62 percent of finance sector donations in 2014 and 69 percent in 2012 went to Republicans.
Even before Republicans secured control of the Senate, their counterparts in the House attached an amendment to a must-pass budget bill to avert that pesky "swaps push out" that I referred to above.
The arcane phrase refers to a provision in Dodd-Frank that required government-insured banks to "push out" the riskiest derivatives (like metals and energy swaps) into a separately capitalized unit. The idea was to insulate financial institutions from the effects of a volatile transaction gone wrong. In the new year, House Republicans have pushed a series of provisions aimed at gutting financial reform. Excuse me: The proper terminology, according to the Republican supporters, is "technical corrections."
Not only that, but many Democrats support these "fixes." Plenty of moderate Democrats are lily-livered about taking on the banks....
http://www.propublica.org/thetrade/item/obama-stands-at-crossroads-on-financial-reform
FYI, most here know this, but just in case~
As Clinton's two-term Secretary of the Treasury, Rubin sharply opposed any regulation of collateralized debt obligations, credit default swaps and other so-called "derivative" financial instruments which—despite having already created havoc for companies such as Procter & Gamble and Gibson Greetings, and disastrous consequences in 1994 for Orange County, California with its $1.5 billion default and subsequent bankruptcy—were nevertheless becoming the chief engine of profitability for Rubin's former employer Goldman Sachs and other Wall Street firms.[33] When Brooksley Born, head of the Commodity Futures Trading Commission, circulated a letter urging increased regulation of derivatives in line with a 1994 General Accounting Office report, Rubin took the unusual step (for a Secretary of the Treasury) of going public in June 1998 to denounce Born and her proposal, eventually urging that the CFTC be stripped of its regulatory authority.[33]
Rubin sparked controversy in 2001 when he contacted an acquaintance at the U.S. Treasury Department and asked if the department could convince bond-rating agencies not to downgrade the corporate debt of Enron, a debtor of Citigroup. The Treasury official refused. A subsequent congressional staff investigation cleared Rubin of having done anything illegal.[34]
Journalist Robert Scheer, in his book The Great American Stickup, claims the repeal of the Glass–Steagall Act was a key factor in the 2008 financial crisis.[page needed] Enacted just after the 1930s Great Depression, the Glass–Steagall Act separated commercial and investment banking. The law was repealed by Congress in 1999 during the Clinton presidency, while Rubin was Treasury Secretary.
...Upon Rubin's retirement, Clinton called him the "greatest secretary of the Treasury since Alexander Hamilton".
http://en.wikipedia.org/wiki/Robert_Rubin
Rubin sparked controversy in 2001 when he contacted an acquaintance at the U.S. Treasury Department and asked if the department could convince bond-rating agencies not to downgrade the corporate debt of Enron, a debtor of Citigroup. The Treasury official refused. A subsequent congressional staff investigation cleared Rubin of having done anything illegal.[34]
Journalist Robert Scheer, in his book The Great American Stickup, claims the repeal of the Glass–Steagall Act was a key factor in the 2008 financial crisis.[page needed] Enacted just after the 1930s Great Depression, the Glass–Steagall Act separated commercial and investment banking. The law was repealed by Congress in 1999 during the Clinton presidency, while Rubin was Treasury Secretary.
...Upon Rubin's retirement, Clinton called him the "greatest secretary of the Treasury since Alexander Hamilton".
http://en.wikipedia.org/wiki/Robert_Rubin
11 replies
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Wish more than an article here & there in independent non-corporate media stepped on those toes, but it'll do for now. 
U.S. President Barack Obama in the Oval Office with staff, including Vice President Joe Biden, Director of the Office of Management and Budget Peter R. Orszag, Chief of Staff Rahm Emanuel, and Director of the White House National Economic Council Lawrence Summers.
Larry Summers~
Summers was appointed Undersecretary for International Affairs of the United States Department of the Treasury under the Clinton Administration. In 1995, he was promoted to Deputy Secretary of the Treasury under his long-time political mentor Robert Rubin. In 1999, he succeeded Rubin as Secretary of the Treasury. While working for the Clinton administration Summers played a leading role in the American response to the 1994 economic crisis in Mexico, the 1997 Asian financial crisis, and the Russian financial crisis. He was also influential in the American advised privatization of the economies of the Post-Soviet states, and in the deregulation of the U.S financial system, including the abolishment of the Glass-Steagall Act.
Following the end of Clinton's term, Summers served as the 27th President of Harvard University from 2001 to 2006. Summers resigned as Harvard's president in the wake of a no-confidence vote by Harvard faculty that resulted in large part from Summers's conflict with Cornel West, financial conflict of interest questions regarding his relationship with Andrei Shleifer, and a 2005 speech in which he suggested that the under-representation of women in science and engineering could be due to a "different availability of aptitude at the high end", and less to patterns of discrimination and socialization.
After his departure from Harvard, Summers made millions as a managing partner at the hedge fund D. E. Shaw & Co., and by giving paid speeches to major financial institutions, including Goldman Sachs, JPMorgan Chase, Citigroup, Merrill Lynch and Lehman Brothers. Summers rejoined public service during the Obama administration, serving as the Director of the White House United States National Economic Council for President Barack Obama from January 2009 until November 2010, where he emerged as a key economic decision-maker in the Obama administration's response to the Great Recession. After his departure from the NEC in December 2010, Summers has worked in the private sector and as a columnist in major newspapers. In mid-2013, his name was widely floated as the potential successor to Ben Bernanke as the Chairman of the Federal Reserve, though after pushback from the left...
National Economic Council
Upon the nomination of Barack Obama as President in January 2009, Summers was appointed to the post of Director of the National Economic Council. In this position Summers emerged as a key economic decision-maker in the Obama administration, where he attracted both praise and criticism. There had been friction between Summers and former Federal Reserve Chairman Paul Volcker, as Volcker accused Summers of delaying the effort to organize a panel of outside economic advisers, and Summers had cut Volcker out of White House meetings and had not shown interest in collaborating on policy solutions to the economic crisis.[50] On the other hand, Obama himself was reportedly thrilled with the work Summers did in his first few weeks on the job. And Peter Orszag, another top economic advisor, called Summers "one of the world's most brilliant economists."[51] According to Henry Kissinger Larry Summers should "be given a White House post in which he was charged with shooting down or fixing bad ideas." [52]
In January 2009, as the Obama Administration tried to pass an economic stimulus spending bill, Representative Peter DeFazio (D-OR.) criticized Summers, saying that he thought that President Barack Obama is "ill-advised by Larry Summers. Larry Summers hates infrastructure."[53] DeFazio, along with liberal economists including Paul Krugman and Joseph Stiglitz, had argued that more of the stimulus should be spent on infrastructure,[54] while Summers had supported tax cuts.[55] In late 2008, Summers and economic advisors for then-President-elect Obama presented a memo with options for an economic stimulus package ranging from $550 billion to $900 billion.[56] According to The New Republic, economic advisor Christina Romer initially recommended a $1.8-trillion package, which proposal Summers quickly rejected, believing any stimulus approaching $1 trillion would not pass through Congress. Romer revised her recommendation to $1.2 trillion, which Summers agreed to include in the memo, but Summers struck the figure at the last minute.[57]
http://en.wikipedia.org/wiki/Lawrence_Summers
Following the end of Clinton's term, Summers served as the 27th President of Harvard University from 2001 to 2006. Summers resigned as Harvard's president in the wake of a no-confidence vote by Harvard faculty that resulted in large part from Summers's conflict with Cornel West, financial conflict of interest questions regarding his relationship with Andrei Shleifer, and a 2005 speech in which he suggested that the under-representation of women in science and engineering could be due to a "different availability of aptitude at the high end", and less to patterns of discrimination and socialization.
After his departure from Harvard, Summers made millions as a managing partner at the hedge fund D. E. Shaw & Co., and by giving paid speeches to major financial institutions, including Goldman Sachs, JPMorgan Chase, Citigroup, Merrill Lynch and Lehman Brothers. Summers rejoined public service during the Obama administration, serving as the Director of the White House United States National Economic Council for President Barack Obama from January 2009 until November 2010, where he emerged as a key economic decision-maker in the Obama administration's response to the Great Recession. After his departure from the NEC in December 2010, Summers has worked in the private sector and as a columnist in major newspapers. In mid-2013, his name was widely floated as the potential successor to Ben Bernanke as the Chairman of the Federal Reserve, though after pushback from the left...
National Economic Council
Upon the nomination of Barack Obama as President in January 2009, Summers was appointed to the post of Director of the National Economic Council. In this position Summers emerged as a key economic decision-maker in the Obama administration, where he attracted both praise and criticism. There had been friction between Summers and former Federal Reserve Chairman Paul Volcker, as Volcker accused Summers of delaying the effort to organize a panel of outside economic advisers, and Summers had cut Volcker out of White House meetings and had not shown interest in collaborating on policy solutions to the economic crisis.[50] On the other hand, Obama himself was reportedly thrilled with the work Summers did in his first few weeks on the job. And Peter Orszag, another top economic advisor, called Summers "one of the world's most brilliant economists."[51] According to Henry Kissinger Larry Summers should "be given a White House post in which he was charged with shooting down or fixing bad ideas." [52]
In January 2009, as the Obama Administration tried to pass an economic stimulus spending bill, Representative Peter DeFazio (D-OR.) criticized Summers, saying that he thought that President Barack Obama is "ill-advised by Larry Summers. Larry Summers hates infrastructure."[53] DeFazio, along with liberal economists including Paul Krugman and Joseph Stiglitz, had argued that more of the stimulus should be spent on infrastructure,[54] while Summers had supported tax cuts.[55] In late 2008, Summers and economic advisors for then-President-elect Obama presented a memo with options for an economic stimulus package ranging from $550 billion to $900 billion.[56] According to The New Republic, economic advisor Christina Romer initially recommended a $1.8-trillion package, which proposal Summers quickly rejected, believing any stimulus approaching $1 trillion would not pass through Congress. Romer revised her recommendation to $1.2 trillion, which Summers agreed to include in the memo, but Summers struck the figure at the last minute.[57]
http://en.wikipedia.org/wiki/Lawrence_Summers
TIME:
1/15/15
Hillary Clinton’s allies appear to be taking their first shot at framing an economic policy agenda for her presumptive 2016 presidential campaign, with a new report out Thursday from the Clinton-friendly liberal think tank Center for American Progress.
This report is very significant for many reasons. For starters, as I mentioned in my TIME column this week about how progressive Elizabeth Warren is pushing Clinton further left, the CAP report was spearheaded by former Clinton economic adviser and former Treasury Secretary Larry Summers. Like his predecessor Robert Rubin, this is a guy much better known for deregulating financial markets than worrying about the working classes. I think the report is a sign not only that Summers is trying to reinvent himself, but that wage stagnation and the plight of the middle class is going to be the key economic issue in the 2016 presidential race.
Hillary Clinton’s allies appear to be taking their first shot at framing an economic policy agenda for her presumptive 2016 presidential campaign, with a new report out Thursday from the Clinton-friendly liberal think tank Center for American Progress.
This report is very significant for many reasons. For starters, as I mentioned in my TIME column this week about how progressive Elizabeth Warren is pushing Clinton further left, the CAP report was spearheaded by former Clinton economic adviser and former Treasury Secretary Larry Summers. Like his predecessor Robert Rubin, this is a guy much better known for deregulating financial markets than worrying about the working classes. I think the report is a sign not only that Summers is trying to reinvent himself, but that wage stagnation and the plight of the middle class is going to be the key economic issue in the 2016 presidential race.
Thanks for posting. We need to know & remember when exactly Wall Street took over our govt. It was this day, when the powers that be so eloquently repealed Glass-Steagal.
November 12, 1999
The spin..."our communities will reap the benefits..."protect the rights of consumers"...like crashing the economy & wrecking "consumers" lives in 2008.
