Matt Taibbi’s latest dissection of the dark arts of legislative sausage-making, “Wall Street’s Big Win: Finance reform won’t stop the high-risk gambling that wrecked the economy – and Republicans aren’t the only ones to blame” is up on the Rolling Stone website. Read the whole thing, but not while you’re eating, or if this is the week you planned to stop sniffing glue:
… But is the nightmare really over, or is this just another Inception– style trick ending? It’s hard to figure, given all the absurd rhetoric emanating from the leadership of both parties. Obama and the Democrats boasted that the bill is the “toughest financial reform since the ones we created in the aftermath of the Great Depression” – a claim that would maybe be more impressive if Congress had passed any financial reforms since the Great Depression, or at least any that didn’t specifically involve radically undoing the Depression-era laws.
The Republicans, meanwhile, were predictably hysterical. They described the new law – officially known as the Dodd-Frank Wall Street Reform and Consumer Protection Act – as something not far from a full-blown Marxist seizure of the means of production. House Minority Leader John Boehner shrieked that it was like “killing an ant with a nuclear weapon,” apparently forgetting that the ant crisis in question wiped out about 40 percent of the world’s wealth in a little over a year, making its smallness highly debatable.
But Dodd-Frank was neither an FDR-style, paradigm-shifting reform, nor a historic assault on free enterprise. What it was, ultimately, was a cop-out, a Band-Aid on a severed artery. If it marks the end of anything at all, it represents the end of the best opportunity we had to do something real about the criminal hijacking of America’s financial-services industry. During the yearlong legislative battle that forged this bill, Congress took a long, hard look at the shape of the modern American economy – and then decided that it didn’t have the stones to wipe out our country’s one dependably thriving profit center: theft.
[A]n uncomfortable political truth: The huge profits that Wall Street earned in the past decade were driven in large part by a single, far-reaching scheme, one in which bankers, home lenders and other players exploited loopholes in the system to magically transform subprime home borrowers into AAA investments, sell them off to unsuspecting pension funds and foreign trade unions and other suckers, then multiply their score by leveraging their phony-baloney deals over and over. It was pure financial alchemy – turning manure into gold, then spinning it Rumpelstiltskin-style into vast profits using complex, mostly unregulated new instruments that almost no one outside of a few experts in the field really understood. With the government borrowing mountains of Chinese and Saudi cash to fight two crazy wars, and the domestic manufacturing base mostly vanished overseas, this massive fraud for all intents and purposes was the American economy in the 2000s; we were a nation subsisting on an elaborate check-bouncing scheme.
Edit: Could some of you haterz maybe read the whole effin article before dismissing as “just another rage-gasm” that “we all knew about anyway”? Taibbi takes five pages to spell out exactly which legislators performed specific actions leading to the passage of a bill, with details of how that bill turned out to be what it is and not seventeen other better (or maybe worse) things. Having done this research (which we are all supposed to be in favor of), he then reports about the topic, in a publication whose general readership may be rather less politically sophisticated than the subscribers to The Nation or Commentary. I give you four paragraphs as a teaser, and a select portion of the elite BJ commentariat can’t be arsed to click over before getting all sniffy. Pismires.