At 5:39 am this morning, Wall Street reform conferees reached a deal:
A 20-hour marathon by members of a House-Senate conference committee to complete work on toughened financial rules culminated at 5:39 a.m. Friday in agreements on the two most contentious parts of the financial regulatory overhaul and a host of other provisions. Along party lines, the House conferees voted 20 to 11 to approve the bill; the Senate conferees voted 7 to 5 to approve.
The specifics are currently unavailable. What reports are available is that Blanche Lincoln's "Section 716" on derivatives was significantly weakened, but not removed entirely. Also the Merkley-Levin "Volcker rule" was stronger than both the versions that passed the House and Senate, but it still contained a significant exemption to win Scott Brown's (R-MA) vote. Tim Fernholtz and David Dayen have these details. And yeah, we won the swipe fee bit.
The bill is murky, because this entire policy area is murky, and its consequences will be difficult to predict. The main test of whether or not it succeeds will be a negative one--we will know it failed if another financial meltdown occurs. In terms of reducing the concentrated power and wealth of larger financial institutions, the bill is relatively weak. Even so, bigger banks and credit card companies will lose billions and billions in profits every year because of this legislation. Consumers will receive more protection, too.
Later today, I will produce a list of the good things in the bill. This will not be done either to stick my head in the sand and deny that a lot of strong reforms were left on the table, or to give the people who engaged in the fight more credit than they deserve. Instead, I simply want to let people know that good comes with the bad, and there efforts were not for nothing. Not recognizing the achievements of the bill is to live in the same amount of denial as not recognizing its failures. We need to know what we achieved, and what we did not achieve, and keep fighting.
The bill could unquestionably have been stronger. However, what political steps were necessary to make it stronger are entirely unclear. If different activists had a viable path to stronger reforms, either they did not articulate that path, or they did not execute that path.
If the bill proves not to be strong enough, then everyone who wanted stronger reforms failed. Everyone. No one gets an exemption, whether you engaged in the fight or not. If our efforts and our complaints were not enough to achieve stronger reforms, we don't get bonus points when the next crash occurs. The crash still happens. The difference in culpability between those who attempted to stop it, and those who egged it one, is a difference of degree, not of type.
While everyone must decide who to act for her or himself, I personally feel a lot better when I engage these fights, then by sitting on the sideline saying how the fight itself sucked. If we are going to fail, I feel a lot more pure if I tried, then if I just washed my hands of the entire matter. For what it is worth, getting a chance to be close to the health care reform, Pennsylvania Senate primary, and wall Street reform these past 13 months has at least convinced me that politics really is run by actual, fallible people, rather than by vague, impersonal, irresistible forces. We can make change, both for good and for bad. Also, failure is an option--we absolutely can just screw everything up. Perhaps most importantly, success is an option, but it only becomes one if we engage in the fight, and figure out a way to marshal enough people and resources behind the causes we believe in, and do so in effective ways.