The Dodd-Frank financial reforms are a year old and very little has changed in the banking system. As Matt Stoller points out, the bill was more about creating the illusion of a solution to the financial crisis than imposing the kind of financial restructuring needed to prevent future problems and begin a real stabilization of the economy.
After the immediate crisis was contained, losses were socialized, and profits returned to financial executives, Congress had to put together a “solution”. It would have a giant bite at the apple in restructuring our regulatory apparatus. But in order to perpetrate the oligarchic banking structure, it would be important that no structural changes to the industry be implemented. Not one regulator was fired for his or her part in the crisis. The Justice Department adopted a posture of legalizing financial control fraud by refusing to prosecute anyone involved in the meltdown, and continues to allow millions of cases of foreclosure fraud to continue. Ben Bernanke was renominated, and the administration fought a bitter below-the-radar battle to secure his confirmation. With a few modest exceptions, the risk-taking and leverage in our financial markets continues apace, and the deregulatory neoliberal mindset is still dominant. The Federal Reserve has been audited, but the system is now accountability-free for high level operatives in finance and politics. And now that Elizabeth Warren has been thrown overboard by the administration, the lockdown of the financial system is nearly complete.
And mostly, that’s what Dodd-Frank accomplished. It rearranged regulatory offices and delivered a new set of mandates, but effected no structural changes to our banking system. Congress never asked what happened, or why, or even, what kind of banking system do we want? And that’s because Obama’s Treasury Secretary already had the answers to these questions.
So, unemployment hovers at between 9 and 10 percent, the housing market remains in the dumper and consumer confidence remains low. The euphoria that followed the election of a Democrat who professed to be a reformer has abated once it was clear that he is nothing more than a brand (in Chris Hedges’ words) who talks a good game and shills for the establishment. So now, rather than the dawning of a promised progressive era, the November 2010 election brought us a Congress controlled by kooks and cranks who are more than willing to send the nation to financial default.
But the president and his supporters continue to praise his efforts, which they say prevented a full collapse. That may have been enough in the early part of 2009, but two years on, we have a right to expect more from him and from the Republicans who now control the House of Representatives.
The sad fact, as Dodd-Frank hits its first birthday, is that it is a perfect representation of the Obama presidency.
- Send me an e-mail.
- Read poetry at The Subterranean.
- Certainties and Uncertainties a chapbook by Hank Kalet, will be published in November by Finishing Line Press. It can be ordered here.
- Suburban Pastoral, a chapbook by Hank Kalet, available here.
Hank Kalet 