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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Thank you!

We didn't know what to expect when we told you we needed to raise $400,000 before our fiscal year closed on June 30, and we're thrilled to report that our incredible community of readers contributed some $415,000 to help us keep charging as hard as we can during this crazy year.

You just sent an incredible message: that quality journalism doesn't have to answer to advertisers, billionaires, or hedge funds; that newsrooms can eke out an existence thanks primarily to the generosity of its readers. That's so powerful. Especially during what's been called a "media extinction event" when those looking to make a profit from the news pull back, the Mother Jones community steps in.

The months and years ahead won't be easy. Far from it. But there's no one we'd rather face the big challenges with than you, our committed and passionate readers, and our team of fearless reporters who show up every day.

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