There's light at the end of the tunnel for Chris Dodd's long slog toward a new Wall Street crackdown. In a statement today, Dodd announced he's going to release a draft of his financial reform legislation on Monday. "Over the last few months, Banking Committee members have worked together to try and produce a consensus package," Dodd said. "Together we have made significant progress and resolved a many [sic] of the items, but a few outstanding issues remain."

The announcement from Dodd signals that the Connecticut senator's efforts at writing a bipartisan bill have failed. In a news conference soon after Dodd's announcement, his GOP negotiating partner, Sen. Bob Corker (R-Tenn.), said Dodd's announcement was "very disappointing" and blamed a number of factors for derailing the bipartisan talks. "There's no question the White House, politics and health care have kept us from getting to the goal line," Corker said.

Since Dodd released an early draft of financial reform legislation last November, he and other members of the banking committee have been embroiled in closed-door negotiations over issues like a new consumer protection agency, ending the government's implicit bailout guarantee for failing banks, and creating the power for regulators to unwind or "euthanize" too-big-to-fail and too-intertwined-to-fail banks. The fate of consumer protection, in particular, has become a lightning-rod issue in the financial reform talks between Dodd and Corker. Dodd has insisted he doesn't care where a new consumer-protection agency is housed—the Federal Reserve and the Treasury are two potential locations—so long as it's "independent," meaning having a presidentially-appointed leader, independent budget, and rule-writing and enforcement powers. GOPers, however, have pushed back against that independence, arguing that any new agency shouldn't have enforcement authority.

How the consumer protection battle plays is just one key issue to look for in Dodd's draft. While you're at it, here are five more to watch for on Monday:

  • Payday lenders: Corker, whose home state of Tennessee is a stronghold for these loan sharks, reportedly pushed to gut oversight of payday lenders. The House's financial reform bill, passed in December, included no such exemptions, and consumer advocates say no new set of comsumer protections is complete without a crackdown on these guys.
  • Bank oversight: The latest proposal to leak out of Dodd's talks has been letting the Federal Reserve keep oversight of the 23 biggest banks—those with $100 billion or more is assets—and creating a super-regulator to oversee the remaining banks, stripping the FDIC of its power and possibly merging several other regulators. The House's plan wouldn't create the super-regulator, but would merge two existing regulators and keep some oversight with the Fed.
  • Banning risky "proprietary trading": There've been rumblings that Dodd might include the "Volcker Rule"—a ban on proprietary trading, or when taxpayer-insured banks engage in trading for their own gain (not their clients') or invest in casino-like operations such as hedge funds and private equity funds. The House empowered the Fed to ban this risky trading, and a Senate bill announced yesterday would prohibit it as well. It's unclear whether we'll see a similar ban in Dodd's bill.
  • Fed as bailout king: In the recent financial crisis, the Fed stepped in to rescue the housing markets and essentially backstop the country's banking system and credit markets. There's been little to no discussion coming out of Dodd's talks on whether he'll put a cap on the Fed's bailout power; the House bill would set a $4 trillion cap and add new safeguards when the Fed wanted to flex its bailout muscles.
  • Derivatives in the dark: Dragging the $300 trillion over-the-counter (OTC) derivatives market onto exchanges and into the light of day, where trades and prices are visible, is another key reform issue. A Democratic Senate aide said last month that the Senate could include an exemption in its derivatives regulation that would essentially exempt two-thirds of the OTC market, a move that would let off many institutions who use derivatives for speculative reasons, not purposes of risk management or hedging. How Dodd's new bill tackles the derivatives question will be a telling sign of whether he truly wants to enact tough reform, or whether he's offering mere window dressing.

war photo 031110

Marines with 2nd Battalion, 25th Regiment open fire upon a mock enemy force during a training raid on March 3, 2010. Photo via the US Marines by Cpl. Tyler J. Hlavac.

It's been a busy week for Mother Jones. We've been bursting Karl Rove's bubble of fantasy—again. We've exposed more Blackwater hijinks than you can shake an M-16 at. We've called shenanigans on the White House's pointless nuclear-lobby concessions to conservatives.

But for some reason, Barbie was the big hit.

A short note about Wal-Mart selling black and white Barbie dolls, side by side, for different prices, captured a lot of eyeballs yesterday. Along with the ire of regular readers, casual visitors, and grumpy right-wing trolls. Commenting on the piece, one reader, Karenn Sloh, summed up the zeitgeist of the crowd: "Complaints like the one in this article are the reason that liberals don't get taken seriously."

Granted! This is a non-story story. A blog post, actually. But it gets written for the same reason that it gets read so widely: It's a great inkblot test for what's on people's minds. Does it say something about race? Sure, even if it's not anything meaningful, or anything we can really agree on. Is it reason enough to hate Wal-Mart? Depends how you already felt about Wal-Mart. Is it an indictment of the free market? Maybe in a narrow sense—more on that below.

But beyond the race-baiting, the trolls, and the rants, some people made very salient points, and in doing so, they gave the story a life—and a news value—all its own. The real story, it seems, is about competing notions on gender and the free market in our culture.

The young voters who help elect Obama were hailed as being the most politically engaged generation in recent history. But now Democrats are wondering if their young supporters will even bother to show up to vote in this year's midterm elections. Poll after poll shows that Democrats are facing a worrying enthusiasm gap, both on the national level and in key swing states like Pennsylvania and North Carolina. And young voters are among the Democratic-leaning groups who seem decidedly less fired up about turning out to vote this year, according to a new study from the Harvard Institute of Politics.

According to the study, only 35 percent of young Democratic voters under the age of 30 plan to vote in the midterms this fall, compared to 41 percent of young Republicans. Similarly, 53 percent of young McCain voters say they definitely plan to turn out, compared to 44 percent of Obama voters.

The numbers are striking, as Obama’s approval rating among young voters remains quite high, at 56 percent. But there have been signs throughout the past year that youth political participation has dropped off since Obama has taken office, even though they’ve been on board with the president. While senior citizens became the face of the health care town hall protests last year, young voters largely stayed on the sidelines during the debate despite their general support for the bill. And, as Jesse Singal explains, dismally low turnout among young voters exacerbated the Democratic losses in New Jersey and Virginia gubernatorial election last year, as well as January's Senate race in Massachusetts.


Our friends over at pointed out to Mother Jones that March 10, 2000, marked the start of the dot-com crash. That's the day the tech-rich Nasdaq stock index reached its peaked, fueled by speculation in the values of them thar new-fangled Interweb-based companies. (Remember the sock puppet Super Bowl commercial? I do, fondly. Happy anniversary!) But it turns out those values were overvalued, and an HTML house of cards tumbled, dragging down the economy with it. Nasdaq closed yesterday down about 54 percent from its high a decade ago.

You'd think that would have been a fabulous cautionary tale far future stock market speculators in oh, say, securitized mortgages and credit swaps. But popular US economic discourse has actually slid backward since then: Nowadays, even the most earnest advocates for financial regulation—or even a little circumspection—are derided as Cassandras at best, or at worst, socialists who reject the free market.

Back in 1996, Fed Chairman Alan Greenspan—who had his part to play in both the dot-com and subprime bubbles—warned America to guard against its own economic hubris, "when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions..." The economist Robert Shiller made that phrase—irrational exuberance—the title of a 2000 book, in which he argued that the Internet-addled stock market was dangerously overvalued. He even put out a revised edition in 2005, warning of a similar phenomenon in the white-hot housing market.

Not that it mattered.

So until our divided nation agrees that you can have a democratic free market with a sane governor on its top speed, let's drink a 40 to the memory of financial bubbles past—and future. And here's hoping the next generation of working stiffs with monied dreams won't ever have to tell their coworkers they're "goin' to Vegas."

The Drudge Report, that right-leaning granddaddy of online rumor mills and news aggregators, is being blamed today—along with some other popular websites—for spreading a host of viruses to its readers. The best evidence available at current seems to bear that out: Through no fault of its own, the No. 3 political website in the world is apparently being used to transmit malware through popup ads.

Stalwart conservatives, though, took time out from their busy schedule of global warming and evolution denials to blame a vast left-wing conspiracy for the virus charges. "Democrats in the Senate are attempting to scare people away from alternative news websites by falsely claiming the sites contain dangerous software viruses," claimed one (right-wing) alternative news website, which has branded the plot part of a larger liberal "cybersecurity agenda."

Senators Carl Levin (D-Mich.) and Jeff Merkley (D-Ore.) are the latest lawmakers calling for a tough crackdown on Wall Street banks engaging in risky, leveraged betting with their own funds, or what's called "proprietary trading." Levin and Merkley told reporters today that they're introducing a new bill, the Protect our Recovery through Oversight of Proprietary (PROP) Trading Act, that would mostly ban taxpayer-insured banks from engaging in proprietary trading, prohibit them from sponsoring hedge funds and private equity funds, and impose new limits on banks' financial reserves to cushion for losses. The senators said the goal of the legislation, which is co-sponsored by Senators Ted Kaufman (D-Del.), Sherrod Brown (D-Ohio), and Jeanne Shaheen (D-NH), is to prevent banks insured with taxpayer dollars from imperiling the economy and requiring government bailouts, as they did in 2008 and 2009. "It’s important that we not allow ever again this kind of threat to our financial system," Levin said, "and in order to do that we would put restrictions on these non-banking institutions that are too big to fail as to what kind of proprietary trading they could engage in."

In many ways thre bill resembles the White House's "Volcker Rules," backed by President Obama and former Federal Reserve chair Paul Volcker, which would also ban proprietary trading. But critics of the White House's plan say it isn't likely to solve the problem its supporters claim it will. This kind of risky internal trading, they say, is a small portion of banks' activities, and thus a minor part of the problem. In his statement to reporters, though, Levin countered that banks' financial reports "tell a very different story." He pointed to statements and regulatory filings from Bank of America, Goldman Sachs, and others showing that these institutions suffered far greater losses from prop trading than they've let on, and that several of these banks have previously said half their earnings have come from prop trading.

Christian conservatives have long warned that if gays and lesbians were allowed equal rights in the workplace, they would rush into the public schools and seize the opportunity to spread the "homosexual lifestyle" among the country's impressionable youth. Those attacks have lost traction as gays have won more legal protections and openly gay teachers have joined the educational mainstream. But leave it to the Traditional Values Coalition to revive the gay teacher line as it's sought to kill off legislation pending in Congress that would finally protect gays and lesbians from workplace discrimination. The inspiration for the latest attack comes from a provision in the Employment Non-Discrimination Act, better known as ENDA, that also would extend workforce protections to transexuals.

Over the past year, the Traditional Values Coalition has issued numerous hysterical reports warning about all the hypothetical dangers of giving "she-males" the legally protected right to pee in the ladies room, for instance. But apparently American women aren't too worried about drag queens in the loo, so TVC has ramped up its scary rhetoric with a new website launched Tuesday focusing on the threat the legislation poses to, yes, the nation's precious public school children. As TVC puts it, if ENDA passes,

"your children will be trapped in classes taught by drag queens and transgender activists. Students will be indoctrinated that “alternative lifestyles” are no different than traditional lifestyles. Young children will be forced to learn about bizarre sexual fetishes – and you will have no say in the matter. It is already happening in some states and concerned parents can’t do a thing about it."

It's hard to know whether TVC's new campaign will resonate with the public. The "Will and Grace" generation is about to become a significant voting block and have kids themselves, and all the polling data suggests that they might find such hyperbolic appeals insensitive and ridiculously out of touch with reality. TVC is clearly trying its best to stun them into support (and donations!) with a parade of potential ENDA horrors. But as with its potty paranoia reports, TVC is really stretching to make a compelling case. In fact, some of its material could end up backfiring. features all of three instances since 1999 where children were forced to learn from someone undergoing gender reassignment and whose parents were unable to either get the teacher fired or move their kids to another classroom. Some people might consider that progress.

Bailed-out automakers like General Motors and Chrysler and their banking brethren who the government rescued in 2008 and 2009 are on a K Street shopping spree. As The Hill reports today, those companies that pleaded for billions in government funding to stay afloat are now hiring the top lobbying firepower that Washington has to offer, making sure their voices are heard as Congress tackles a spate of new bills like comprehensive financial-reform and health-care legislation.

General Motors, for instance, has hired three big lobbying outfits—Public Strategies, Navigators, and Dutko Worldwide—to press lawmakers on issues such as tax reform and auto safety, the latter a hot-button issue given the recent hearings in Congress on Toyota's safety woes. And two big-name players in the banking world—Goldman Sachs and Morgan Stanley—have ramped up their lobbying arsenal as well in the past two or three months. In December and January, Goldman hired the Harold Ford Group and Gibson Dunn & Crutcher to lobby on financial-reform legislation, and Morgan Stanley retained the law firm Sonnenschein Nath & Rosenthal in January to work on financial-reform—an issue that could have seismic effects on how the two firms and the rest of Wall Street do business.

This ramp-up of lobbying firepower, especially among the big banks, almost surely means a weaker financial-reform bill will emerge from Congress. As our own Kevin Drum reported earlier this year, Big Finance's foot soldiers in Washington pretty much own capital already. And if Goldman and its allies are now beefing up their ranks even more, you can bet they'll win more than a few victories in watering down any effort, however well-intended, to rein in the big banks.

Sen. Bob Corker (R-Tenn.), the top GOP negotiator in the Senate's arduous financial-reform talks, is doing the dirty work for one of the dirtiest of financial industries: payday lending. Corker, the New York Times reports today, is pushing hard to throw a loophole in Senate banking committee's bill for the payday lending industry—essentially a form of loan sharking—to blunt any new oversight. The move sets up a potential showdown with Sen. Chris Dodd (D-Conn.), banking committee chair and leader of the financial-reform talks, whose November draft of legislation empowered a new, independent consumer-protection agency to crack down on payday lenders, among other non-banking institutions.

According to the Times, while a consumer agency tentatively agreed to by Dodd and Corker might be able to write new regulations for payday lenders, it would have to consult with other regulators to enforce those rules. Consumer advocates have repeatedly said gutting a consumer agency's rule-enforcement power would kneecap the new agency and limit its usefulness. And if the Senate goes lightly on the payday lending industry, it's likely to set up a battle between the House—whose bill last winter called for new oversight of the industry—and the Senate when the two try to merge their bill.

Corker's support for the payday lending industry is no surprise given the power the industry wields in his home state. The main trade group for payday lenders, the Community Financial Services Association, was founded in Tennessee in 1999, and has donated $1,000 to Corker. Corker has also received thousands more in donations from other heavy-hitters in the payday lending business, like $6,500 from the founders of Advance America, a leading payday lender. And overall, the industry's lobbying efforts almost tripled between 2005 and 2008 to maintain lax regulation of their industry, while at the same time business is booming for payday lenders. Especially with all those unemployed workers to prey on.