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Letter: Special interests
April 11, 2012, 05:00 AM Letter
The president signs it into law, but then we discover the fight’s just begun because the special interests immediately set out to win back what they lost when the reform became law. They spread money like manure on the campaign trails of key members of Congress. They cozy up to columnists and editorial writers, unleash hordes of lobbyists on Capitol Hill and spend millions on lawyers who try to rewrite or water down the regulations required for enforcement. And before you know it, what once was an attempt at genuine reform creeps back toward business as usual.
The Dodd-Frank Wall Street Reform and Consumer Protection Act — passed two years ago in the wake of our disastrous financial meltdown. Especially vulnerable is a key provision of Dodd-Frank known as the Volcker rule — an attempt to keep the banks in which you deposit your money from gambling your savings on the bank’s own, sometimes very risky investments. It will come as no surprise that the financial industry hates the Volcker rule and is fighting back hard. Stop them from doing speculative trading.
Using your deposits to go speculate? It would permit ordinary trading to go on but take away the big speculative — big or small speculative activity. You’ve got great advantages if you’re a government-regulated bank. Take the two big remaining investment banks. We used to call them investment banks. Goldman Sachs and Morgan Stanley. Both during the crisis got a banking license. “While the Volker Rule will surely put a damper on bank trading profits, it will force many firms to go back to the basic blocking and tackling of the financial services business.”
Ted Rudow III,MA