On Newsweek’s website, Michael Hirsh writes under the headline “The old system refuses to change. Is Obama getting the message?”
He describes a late-March meeting between six Democratic senators, President Obama and his economic advisers—a meeting that has gone essentially unreported:
…while they supported Obama, they were worried. The financial reform policies the president was pursuing were not going far enough, they told him, and the people Obama was choosing as his regulators were not going to change things fundamentally enough. His appointed officials and nominees were products of the very system that brought us all this economic grief; they would tinker with the system but in the end leave Wall Street, and its practices, mostly intact, the senators suggested politely.
…[and now] major Wall Street players are digging in against fundamental changes. And while it clearly wants to install serious supervision, the Obama administration—along with other key authorities like the New York Fed—appears willing to stand back while Wall Street resurrects much of the ultracomplex global trading system that helped lead to the worst financial collapse since the Depression.
At issue is whether trading in credit default swaps and other derivatives—and the giant, too-big-to-fail firms that traded them—will be allowed to dominate the financial landscape again once the crisis passes. As things look now, that is likely to happen. And the firms may soon be recapitalized and have a lot more sway in Washington—all of it courtesy of their supporters in the Obama administration.
This is scary stuff. Hirsh goes on to note how the banks are bypassing Congress for still more assistance, and describes a muscular new lobbying operation (the typically misnamed “Coalition for Business Finance Reform”) being put in place by the firms that got bail-out money.
All this presents a problem for journalism—so much is happening, so fast, that it takes all of our time to simply follow the latest developments and master the newest acronyms and financial jargon. This leaves little time or energy for what is most needed: a tough assessment of whether we, the public, are getting a good deal, or, as appears increasingly likely, getting hoodwinked yet again by wealthy interests that always get Washington’s ear, no matter who is in power.
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