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Dodd Financial Reform Bill: All Holes and No Cheese

Courtesy of George Washington

In a letter last week to Senate majority leader Harry Reid and minority leader Mitch McConnell, former SEC Chief Accountant Lynn Turner, former Treasury Secretary Robert Reich, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, Barry Eichengreen and others pointed out that Dodd’s proposed financial reform legislation wouldn’t have prevented the current crisis … and won’t prevent the next crisis.

Dodd himself has admitted that his bill “will not stop the next crisis from coming”.

In fact, the bill is wholly ineffective, failing to address the core things which need to be done to stabilize the economy. See this, this and this.

Moreover, as Democratic Congressman Brad Sherman – a senior member of the House Financial Services Committee and a certified public accountant – points out:

 

The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for. The bill contains permanent, unlimited bailout authority.

And as Arthur Delaney notes, the bill is riddled with carve outs purchased by lobbyists:

“Obtaining a carve-out isn’t rocket science,” said a Republican financial services lobbyist. “Just give Chairman Dodd [D-Conn.] and Chuck Schumer [D-N.Y.] a shitload of money.”

On MSNBC Tuesday morning, Sen. Bob Corker (R-Tenn.), a Banking Committee member who worked closely with Dodd, said there was “no question” that Dodd’s draft contained loopholes. Corker mentioned a few hits from the carve-out list: “Private equity firms are left out,” he said. “Hedge funds are left out.”

The bill is all holes and no cheese.

Washington’s Blog


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