A Rule Confirms the Exception, Colltalers
With much fanfare, a timid segment of the Dodd-Frank financial reform of 2010, the so-called Volker Rule, has finally been approved by U.S. regulators, ‘only’ five years after Wall Street’s recklessness finally caught up with reality and drove the world economy into a ditch.
We won’t display here our poor academic qualifications to gauge the reach of the measure, but according to government officials, it’ll ensure that banks no longer practice what’s known as proprietary trading, i.e. trading for their own gain, even if against their clients’ needs. Yeah, right.
As in most legislation passed in response to the financial collapse of 2008, which taxpayers’ were forcibly enlisted to salvage, the rule’s terms and potential efficacy curbing an entitlement culture of gambling with somebody else’s money may trip into confusion even the most earnest of those same taxpayers. That may be by design, but you won’t find anyone admitting it. At least not before calling you a ‘financial illiterate,’ i.e. a moron.
In the real world, of course, little of that will improve life for working stiffs, who’re busy getting low balance warnings from their banks and have no way of knowing, or no longer care to bother checking, how much of the fees they’ve been charged line a CEO’s compensation package.
On paper, the rule does require financial institutions to be yearly reviewed for compliance, but when it comes to how many ways speculative trading can be packed to look like needed profit-generating strategies demanded by shareholders, we all know what that paper is good for.
The Volker Rule, named after a former chairman of the Federal Reserve, doesn’t fare well even in the grandstanding front. To properly illuminate the myriad of obscure measures taken since the crisis hit, a litmus test of sorts has emerged: how many big heads landed in jail. Again, we know that score.
Thus, no matter how much patting in the back goes on in Washington, at the expense of this or any other narrow-aiming rule, the majority of Americans are not that impressed by the rhetoric that the Obama administration is indeed serious about controlling Wall Street excesses.
It really couldn’t, nor it would find enough sympathetic ears in Congress to support radical change. It’s now a regular part of being elected a ‘people’s representative,’ the evaluation of how much this or that legislative seat costs, and what corporations are willing to foot the bill.
Without such calculation, anyone relying ‘only’ on grassroots movements and sign-in lists would be laughed out of Capital Hill and wouldn’t be able to find a wooden crate to stand on, or stand out for their beliefs, no matter how high their moral standing, and/or popular support, would be.
It may be not a coincidence that this business approach to ‘serve the people’ has prevailed since the financial crisis. Money in politics, specially of the ‘dark’ kind, has risen so much to make possible to be insanely nostalgic about the ‘good’ old days of only lobbying influencing policy.
Which hasn’t diminished either, as many former government operatives have switched sides to work as lobbyists now more than ever. Such highly trained professionals remain in demand because they’ve honed their craft in the intricacies of governing, in the privileged, inner circles of power.
But not to worry; cold, hard cash continues to work its way through politics as well, behind a sea of front organizations, financed by extremely wealthy individuals and groups, who are deeply invested into paying for having a say in policies that will affect the rest of us.
So, after five years, we have a few legislative drives, of which the Volker Rule is only the latest, but no Wall Street big wig rotting in jail; and a multiplication of ‘nonprofits’ with financial stakes in policy making, besides a lot of serious looking people asserting the need to rein in on greed.
On the other side, while this has been one of the strongest years for the stock market, the unemployment rate remains depressingly high, given corporate profits, and all talk about raising the minimum wage has had little resonance to prevent a steady dismantling of social programs.
In other words, there remains a gaping disconnect between what Washington has been battling about and the needs of working families, left to fend for themselves by their representatives. But it could be worse: we could be talking about the failure of affordable health care for millions instead.
A footnote on Nelson Mandela, laid to rest yesterday, whose funeral was the focus of one of the most bizarre coverages of the passing of such a global figure. Both at local and international levels, we’ve cringed about the images and were actually glad that he was no longer with us to witness them.
One hopes that much of that distraction, along with the absurd sanitization of his accomplishments and toned down of his political militancy, will fade away, and give rise to the stature and lasting legacy of the man. In fact, we owe him to teach our children about the dignity that the coverage all but stole from him at his final hour. Have a great week. WC