Andy Kroll

Andy Kroll

Senior Reporter

Andy Kroll is Mother Jones' Dark Money reporter. He is based in the DC bureau. His work has also appeared at the Wall Street Journal, the Detroit News, the Guardian, the American Prospect, and TomDispatch.com, where he's an associate editor. Email him at akroll (at) motherjones (dot) com. He tweets at @AndrewKroll.

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Frank: Wall St. Crackdown Could Arrive Within Months

| Wed Jan. 27, 2010 2:24 PM EST

Rep. Barney Frank (D-Mass.), chair of the influential House financial services committee, says Obama's lastest regulatory crackdown on Wall Street could make it into law in as soon as few months. Frank, who said the president's flurry of recent financial reforms surprised him, told the Financial Times in Davos, Switzerland, that the administration's new proposals could very well be included in an existing financial services bill already in the works within his committee. (To watch the full interview with FT's Gillian Tett and Frank, click here.)

More from the FT story:

This essentially gives a new systemic regulator the discretionary power to clamp down on banks' proprietary businesses or force banks to shrink in size—if necessary. Until recently, this aspect of the bill had not garnered much attention, since there has been a wider controversy about the future identity of a systemic regulator.

However, Mr Frank argued that Volcker's plan could be incorporated within this enhanced definition of a supervisory authority—and said he was sure that a bill would be in place well before the mid-term elections in November, if not signed off by Chris Dodd, his counterpart in the Senate, within weeks. "I think Chris will get a bill out in March."

Overall Mr Frank said the drive to de-risk banks was to be applauded. "I wish banks had fewer ways to make money than deposits," he said. He also expressed confidence that the US reforms could form part of a wider regulatory blueprint that would be incorporated elsewhere, including in Europe—dismissing scepticism that Mr Obama's initiative had upset a measured, internationally co-ordinated response to the future regulation of the world's banks.

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Cut Weapons, Not Education

| Tue Jan. 26, 2010 2:35 PM EST

A pillar of Obama's State of the Union address on Wednesday, we're learning, will be a three-year spending freeze in domestic areas like education, transportation, housing, national parks, and farm subsidies, among others. Reeling from Massachusetts Sen.-elect Scott Brown's victory last week and a growing disenchantment with his ambitious domestic agenda (health care, climate change, financial reform), Obama's move is no doubt intended to show he's tough on the deficit, and to allay fears among fellow Democrats staring down a potentially bleak November election season. Its political utility aside, the spending freeze, as it stands now, is a wrongheaded, ill-fated move—not only because it targets areas where more funding is needed, but it exempts the most pork-riddled, wasteful area of them all: defense spending.

Even Pelosi Wavers on Health Care

| Thu Jan. 21, 2010 2:40 PM EST

The fate of health-care legislation looks more ominous by the day. Today, House speaker Nancy Pelosi (D-Calif.) told reporters there aren't enough votes in the House to even pass the weaker Senate version, let alone a House-Senate compromise on health care. She also said there's no timeline in mind for getting a bill of some kind passed, an indication that the health-care-induced logjam is far from over. This could reflect the lingering doubt stemming from the Massachusetts special election, but either way it doesn't bode well. TPM reports:

"I don't see the votes for it at this time," Pelosi said. "The members have been very clear in our caucus about the fact that they didn't like it before it had the Nebraska provision and some of the other provisions that are unpalatable to them."

"In every meeting that we have had, there would be nothing to give me any thought that that bill could pass right now the way that it is," she said. "There isn't a market right now for proceeding with the full bill unless some big changes are made."

While she didn't say the option was dead -- "Everything is on the table," she said -- she outlined two very different options for passing a bill.

"There's a recognition that there's a foundation in that bill that's important. So one way or another those areas of agreement that we have will have to be advanced, whether it's by passing the Senate bill with any changes that can be made, or just taking [pieces of it]," Pelosi said.

"We have to get a bill passed -- we know that. That's a predicate that we all subscribe to."

Obama and Volcker: About Time

| Thu Jan. 21, 2010 7:34 AM EST

It took a year—of pathetic deference to the financial lobby, of siding with the Wall Street alums in his administration, of allowing special interests and their shills on the Hill to hollow out financial regulation legislation—but Obama's finally seen the light. In the latest Wall Street-Washington news, the president's aiming to hit banks where it hurts by clamping down on risky speculative trading, capping the size of major financial institutions, and stopping commercial banks from trading with their own cash. An encouraging sign, Obama's latest move is just as much Paul Volcker's, the former Fed chairman who until lately couldn't get any of his ideas heard in Washington and had criticized Obama's earlier proposals. Until recently, Volcker,  the chair of Obama's Economic Recovery Advisory Board, was widely seen as less influential than more pro-Wall Street administration types like Treasury Secretary Tim Geithner and Larry Summers, the president's chief economic adviser. But now Obama and Volcker appear to have teamed up, and while Wall Street will surely scream bloody murder here, I can't help but feel excited that maybe, just maybe, Obama intends to quit bowing to big finance and work toward serious, lasting, productive financial reform.

Here's why this announcement is so important. For starters, as Kevin has pointed out in his piece "Capital City" and in many blog posts, a lot of the fallout from the financial crisis (and others like it in the past, i.e., LTCM) came down to one word: leverage. Shops like Lehman Brothers were allowed to be ridiculously, insanely leveraged, their bets so far exceeding what they actually had on hand, that when a great deal of those bets failed the entire ship sank with it. That applied to a lot of institutions, some of whom would presumably be impacted by this plan, which, as it's laid out now, would limit that risk-taking—and thus prevent future Lehmans and other catastrophes that would ripple throughout the economy. 

The proposal also hits on one of Volcker's causes celebre: prohibiting what's called "proprietary trading," when commercial banks make bets with their own money from, say, deposits. Until 1999, the Glass-Steagall Act maintained a firewall between commercial and investment banking, but once the act was eliminated banks began to bet again with their own cash on things like mortgage-backed securities. This latest proposal would again tamp down on that practice, given the role it caused in the run-up to financial meltdown.

With this latest proposal coming on top of the president's support for a Consumer Financial Protection Agency and the bank tax, has the administration finally reversed course? Obama has done more to take on Wall Street in the past week than in the previous year. As Congress looks to take up financial regulation talks, are today's moves a harbinger of what's to come?

Has Obama Won in Iraq?

| Wed Jan. 20, 2010 2:29 PM EST

On a day when there's nothing but dismal, depressing news on the Obama front, Juan Cole credits the president for what Cole deems his first major foreign policy success: the US drawdown in Iraq. While he acknowledges the presence of US bases there (which will likely never leave), Cole credits Obama for his adherence to a strict timetable for withdrawing American troops from Iraq's cities despite his generals' opposition, for turning over security (however feeble) to Iraqi forces even in dangerous regions like Al-Anbar Province, and for essentially ending the war as we once knew it. Cole adds:

Contrary to the consensus at Washington think tanks, Obama is ahead of schedule in his Iraq withdrawal, to which he is committed, and which will probably unfold pretty much as he has outlined in his speeches. The attention of the US public has turned away from Iraq so decisively that Obama's achievement in facing down the Pentagon on this issue and supporting Iraq's desire for practical steps toward sovereignty has largely been missed in this country.

Not only will the US drawdown in Iraq greatly improve the image of the US in the Arab world and allow for more cooperation with Arab countries, but it will probably help US-Turkish relations, as well. Turks often blame the US for backing Iraqi Kurds and allowing a resurgence in Kurdish terrorism via the Kurdish Workers Party (PKK), to some 5,000 of whose fighters Iraqi Kurdistan has given safe harbor. The US will soon be out of that picture, and Turks and Kurds will have to pursue their relations on a bilateral basis.

I mostly agree with Cole here. That the US' actions in Iraq haven't made major news in quite a while—apart, that is, from their withdrawal from Iraq's cities—is telling, and Obama does indeed deserve credit for standing up to people like Gen. Ray Odierno and sticking to the Status of Forces Agreement with the Iraqis. It's probably the best foreign policy move Obama made in his first year as president.

Iraq remains, however, in political turmoil, and Iraqi-led security leaves a great deal to be desired. (The Iraqis do claim to have thwarted another major bombing on their ministries, after several deadly attacks rocked Baghdad last year.) Sure, American troops are mostly removed from the car bombings and violence still rippling through Iraq's cities, but the turmoil that remains is the US' legacy. The victory may be Obama's, but any kind of lasting success seems far off for the Iraqi people.

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