What You Need To Know About Financial Reform

Posted by John Atlas on April 29, 2010

Is the public in favor of regulating Wall Street?

A national survey conducted in March by the nonpartisan Pew Economic Policy Group found that 68 percent of the public have an unfavorable opinion of big banks. Two-thirds of the public blame either the big banks or Congress’ failure to regulate banks for the current financial crisis. Seventy-nine percent think it is important for Congress to take action quickly to reform Wall Street’s abuses.

But don’t the banks control Congress by contributing millions of dollars to their campaigns?

There are two kinds of power: organized money and organized people. While the banking industry and its corporate allies have the crude influence of campaign contributions and lobbying clout, ordinary, people, if well organized, can counter the banks by voting, marching and mobilizing public opinion. That’s why a coalition of major community organizations, unions, and religious groups have launched a campaign this week to challenge political influence of giant banks, beginning with a series of protests in San Francisco, Kansas City, Charlotte, Chicago, Washington, D.C. and New York.

If you favor of strong financial reform legislation, what is the best way to frame the issue so the public will pressure Congress to act?

According to a recent Gallup poll, if you ask voters whether Congress should pass and new financial regulations on large banks, voters are evenly divided pro and con. But if advocates call for new financial regulations on Wall Street, voters favor new regulations by a 14 percentage point margin. The poll showed 50 percent of voters in favor of new regulations and 36 percent in opposition. Voters are outraged by the huge bonuses that big banks gave to their top employers after taxpayers had bailed them out.

Voters are also outraged by how Goldman Sachs and other mega financial institutions are making huge profits but failing to make loans to mainstreet. They are angry, too, at the ongoing epidemic of foreclosures and the persistently high levels of unemployment caused by the banking industry’s irresponsible and greedy practices.

If you are a Republican and you don’t want to rein in Wall Street, but want to get their money and oppose Obama, then what do you do?

You follow the playbook of message maven Frank Luntz, who wrote a memo for Republicans last year. In his memo titled The Language of Financial Reform he wrote that “the single best way to kill any legislation is to link it to the Big Bank Bailout.” Luntz went on to lay out a strategy urging Republicans to describe a measure that makes Wall Street foot the bill for future rescues as imposing the cost on taxpayers. Luntz, the Republican master of Orwellian doublespeak, is hoping to insulate Republicans who are more in the pockets with greedy bankers than even Democrats.

Who do voters trust to carry out new financial regulations?

Democrats are favored over Republicans by eight percentage points.

How much is Wall Street spending to defeat new regulations?

About $1.4 million so they can do what they want and some day drive us into another deep recession.

What is the name of the House financial overhaul bill?

“Wall Street Reform and Consumer Protection Act of 2009.”

What about the Senate bill?

Banking Committee Chairman Sen. Chris Dodd (D-Conn.) refers his financial legislation as the, “Wall Street Reform Bill.”

Does the business community support Goldman Sachs?

Much of the business community, in solidarity with greedy corporate brothers, oppose financial regulation. The Chamber of Commerce, the business community’s umbrella group in Washington, strongly opposes the Consumer Financial Protection Agency (CFPA). But even business leaders are concerned. A recent poll shows that a majority believe Goldman has been guilty of fraud.

About the author more »

John Atlas is president and one of the founders of NHI. Atlas is the author of Seeds of Change: The Story of ACORN, America's Most Controversial Antipoverty Community Organizing Group (Vanderbilt University Press, 2010), a story about one group’s efforts to reduce inequality. Atlas lives in Montclair, NJ, and is working on an upcoming theatrical documentary funded by the Sundance Institute, Tribeca Film Institute, and PBS.

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