US financial reform bill lacks teeth
Legislation to overhaul the US financial system has passed a joint House and Senate committee. It will now go before both houses for a final vote.
The bill is expected to hit US President Barack Obama’s desk for signature by July 4.
“The cartoons are over; we’re ready to get into the double feature,” said US Representative Barney Frank, referring to the committee’s approval of the reform bill.
“A Mickey Mouse congressman should know a cartoon when he sees one,” said Gerald Celente, the director of the Trends Research Institute. “It’s political theater.”
Celente argues that the regulations are merely words without action, reading from the Bloomberg he said, “Banks dodge bullet, US Congress dilutes trading rules.”
The bill has been called a win for the White House and for the US Federal Reserve. The bill puts the Federal Reserve in charge of overseeing the new consumer protection program.
“That’s like putting the Minerals Management Service that overlooks BP’s disaster and all the oil industry in charge of overlooking the consumer. So, it’s nothing, as I said. It is nothing more than political theater. It does nothing but keep the status quo in place,” said Celente.
Experts are arguing that Obama can use this reform bill an example at the upcoming G-20 Summit in Toronto. However, many world leaders are favoring cutting spending and implementing austerity measures, whereas Obama supports spending and stimulus measures.
“The United States has an advantage that they [Europe] don’t have, that is, Greece can’t print more money, Spain can’t print more moment. The United States can. They have to go into austerity measures. It’s insanity for President Barack Obama to keep telling nations and people to take on more debt as thought that’s going to somehow wipe away the old debt,” said Celente.
He argued that austerity measures are on the table in other parts of the world, but the focus in the US is still on stimulus programs.
“It’s not going to work. The game is running out. As we said, before the clock strikes 2011 the whole world will know that the crash for 2010 has occurred. These measures will do nothing to stop it,” said Celente.
Celente said that the Europeans protesting austerity measures are not simply protesting spending cuts or calling on the government to spend more. He argued; they don’t want to pay more taxes to bail out big companies.
“The country is being run by Wall Street. You look at the names, the people and the places. It’s very clear. The little crumbs that they throw to the working people are just what you saw with Obama bragging today before he went to Toronto about the tough consumer protection act in this legislation that really does nothing,” said Celente.
Reform package a mess
Joe Weisenthal, the deputy editor of The Business Insider said the reform package is really “a hodgepodge of different ideas.” The bill includes regulations to curb speculation and derivatives, as well as consumer protection measures.
He argued that he cannot see any component of the bill that actually has the potential to prevent any future financial crisis from occurring.
“As long as we have to big to fail financial institutions or huge financial institutions we are probably going to have financial crisis in the future,” said Weisenthal.
The Obama administration has said there will no longer be too big to fail institutions, that the new legislation solves that issue.
Weisenthal argued that this is not the case. The US will continue to have massive financial institutions and the bailouts and stimulus programs enforced the notion of too big to fail by encouraging banks to grow and merge with one another.
While the financial reform bill has cleared committee, a bill aimed at curbing US unemployment failed. Weisenthal argued that the jobs bill failed because most Americans are currently employed and that the employed no longer think the government can keep supporting the unemployed population.
“I think there is this pull yourself up by your own bootstraps mentality that’s pervasive,” said Weisenthal.
He continued, paraphrasing Kentucky congressional candidate Rand Paul, “If you're unemployed, take a worse job than you’re expecting.”
Weisenthal argued that sentiment resonates with the American people.
