Obama Gains Financial Reform Win

It's getting harder for Obama's critics to make a coherent analysis of his achievements. Early on he was labeled the empty suit, but his ability to get things done makes such a claim ridiculous, especially when you are simultaneously saying that he will bring diabolical change to the United States.

After a certain amount of do-nothingism and debate, and under the President's urging, the Senate finally followed up with its own version of financial reform. The complaint is that it is insufficient in all the wrong areas, but what cannot be ignored is that this is the second major legislative win for the president. He is doing something, if not exactly what his supporters and detractors want. This follows his health care reform, and if we add various peripheral actions--the nuke deal with Russia, getting his Supreme Court picks onto the bench--we cannot ignore his efforts to make a positive mark.

It's clear in both pieces of legislative victories (health, financial) that the average American remains a central part of whom he hopes to help. Republicans challenged the idea of a consumer protection agency, and also succeeded in getting a financial destabilization fund (financed by the industry) off the table in the Senate version of the bill. Amazingly, they pushed the lie that the fund was a taxpayer bailout fund, when in fact, the new version in the Senate bill, which requires the government to pay for liquidations of troubled firms after the fact is the purer stiff arm to the taxpayer. Hopefully in reconciliation, the House version takes the lead. President Obama's desire to have financial firms pre-pay for their own liquidation was laudable.

The trading of derivatives on unowned assets remained largely unchanged, and yet, one could argue that such bets on the housing market were a large cause of the financial meltdown. When the value of the bets surpasses the actual market in question, one wonders if such should be permitted wholesale.

But the fact that we do have a focus on consumer protection is testament to Obama's considerable efforts to actually touch people in their daily lives.

(The New York Times breaks down the details nicely here.)

We also wonder how long it will take Goldman to make its way toward the door and abandon its bank holding company status, since proprietary trading becomes more restricted under the new legislation under consideration. We've said this was long the likely path that firm would take, should the new laws allow it.

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In other news, we are pretty sure North Korea sunk a South Korean warship via missile, and exactly how you manage to handle this and paper it over should be interesting. Since we can't imagine them going to war, and yet can't imagine ignoring such an incident, we assume some verbal and diplomatic alchemy is on tap. One of those frying pan/fire, damned do/damned do not situations. South Korea promises prudence.