Out of Lehman’s Ashes Wall Street Gets Most of What It Wants

[brentspeak]

http://www.businessweek.com/news/2010-12-30/out-of-lehman-s-ashes-wall-street-gets-most-of-what-it-wants.html

December 30, 2010, 7:40 AM EST

Dec. 28 (Bloomberg) -- Wall Street’s biggest banks, whose missteps caused a global financial crisis and economic slowdown two years ago, were more agile when it came to countering the political and regulatory response.

The U.S. government, promising to make the system safer, buckled under many of the financial industry’s protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives. Higher capital and liquidity requirements agreed to by regulators worldwide have been delayed for years to aid economic recovery.

“We continue to listen to the same people whose errors in judgment were central to the problem,” said John Reed, 71, a former co-chief executive officer of Citigroup Inc., who estimated only 25 percent of needed changes have been enacted. “I’m astounded because we basically dropped the world’s biggest economy because of an error in bank management.”

snip

Wall Street’s army of lobbyists and its history of contributions to politicians weren’t the only keys to success, lawmakers, academics and industry executives said. The financial system’s complexity gave bankers an advantage in controlling the narrative and dismissing the ideas of would-be reformers as infeasible or dangerous. A revolving door between government and banking offices contributed to a mind-set that what’s good for Wall Street is good for Main Street.

[RandomThoughts]

1. That last line.

That is only if you are scared. Because honestly, they are bluffing.

They got nothing, but what they can get you to think they are. If you can break the spells, you see right through it.

[dkf]

2. It's hard to gain support for Measures that the public is too financially illiterate to understand.

"The U.S. government, promising to make the system safer, buckled under many of the financial industry’s protests. Lawmakers spurned changes that would wall off deposit-taking banks from riskier trading. They declined to limit the size of lenders or ban any form of derivatives. Higher capital and liquidity requirements agreed to by regulators worldwide have been delayed for years to aid economic recovery."

If you gave this paragraph to the typical American how many would understand the relevance of any of these things?