Good News on Financial Reform

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Blanche Lincoln’s legislation to rein in derivatives trading passed its first hurdle today:

The Senate Agriculture Committee on Wednesday approved legislation to tighten regulation of derivatives trading, with a single Republican, Senator Charles E. Grassley of Iowa, joining Democrats in supporting the measure. The vote was 13 to 8.

The defection of Mr. Grassley, who is the senior Republican on the Finance Committee and is up for re-election, illustrated the increasingly difficult political position for Republicans in opposing the legislation….His vote to support the measure underscored the potential political peril in opposing tighter rules for Wall Street, at a time of public frustration over the return of huge earnings and blockbuster bonuses even as unemployment remains high and the economy struggles to recover in much of the country.

Like I said yesterday, originally I didn’t take Lincoln’s proposal seriously. It seemed like it was just a stalking horse, a way for her to look tough and get some good hometown headlines even while knowing that it would quickly get watered down. And that might still happen, of course. Her derivatives language still has to survive a merger with the Banking Committee bill, a vote on the Senate floor, and then the conference report. The odds of coming through all that unscathed are pretty remote.

But….you never know. Republicans are obviously feeling some heat on this, and it’s not as though anyone outside of Wall Street has any sympathy for the derivatives industry. For now, this remains a possible bright spot on the financial reform horizon.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily crazy—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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