Bank reform and Golden Sacks of crap

Too big to fail is just what it means: any financial reform that leaves standing commercial institutions that are "too big to fail" is doomed.

Any reform that fails to bring these monsters down to a size where they can be controlled, instead of them controlling us, fails to protect the American wage earner.

And just to be clear, breaking up the giant oligopoly banks is about as "free market" a policy as we can envision. Government is not the enemy of business, but it is a referee and protector of the market. When one player, like Goldman Sachs, becomes so powerful that it can successfully manipulate the economy in which it plays, the market is broken and needs reform.

Large investment banks command an horrific percentage of corporate profit in the U.S. (as opposed to our beleaguered and important community banks, the ones that would provide loans to you and me if Chase and company had not sucked up all the dollars). Read more here.

They buy and sell politicians of each major party with a stroke of a pen. They send their minions to work for the regulators. They profit from our hardship.

It is time to recognize that, like the oil and rail monopolies of the past, large investment banks need to be brought down to a size that would allow for greater competition, more transparency, and to allow the market to punish any them, even with failure, for bad decisions. They need to be broken up and a stable, competitive market restored.

The current proposed legislation does not go nearly far enough.

Don't rush reform

Two laws need to be recognized by the Oregon Legislature, and neither was passed in Salem.

The first is the law of unintended consequences. The second is that given a chance, most people will do the wrong thing for all the right reasons.

These are immutable, and legislators will obey them, willingly or not.

According to “The Oregonian,” next week the House and Senate will attempt to “clean up our act,” in the words of the estimable Peter Courtney, after revelations that the Oregon Beer and Wine Distributors Association paid for legislators to go to Hawaii for a little golf.

Now, Senator Courtney is a good man by all accounts. And even though the Oregon Beer and Wine Distributors Association should be embarrassed about the trips, lobbyist Paul Romain should be even more so about advising legislators the trips did not have to be declared.

And did Romain really equate a trip to Maui with a drive to Medford or Scappoose? Ah, what exquisite brass. Most who have been to Medford, Scappoose and Maui would say they are not “the same thing.” Especially under these cold gray skies.

But that overarching arrogance is not the topic, not today. The topic is that good men and women in the legislature plan on making big changes in the rules, and they need to move more slowly.

As much as we hate to agree with Rep. Wayne Scott about anything, he is probably (that’s a qualifier) telling the truth when he says he can’t be bought for a $50 steak dinner.

And while Romain should have his shoe laces tied together for trying to slide around the rules and have individual beer distributors make contributions rather than his lobby, it isn’t the steak dinners nor gift bags for spouses at the Grand Wailea Resort (Paul, there isn’t one of those in Scappoose. Not even in Medford) that we need to worry about.

It isn’t the martinis or crab cakes at Bentleys Grill, as good as they are (the crab cakes).

it is time to deal with the real issue.

We as a people need to grapple with the thorny free speech issues of huge, single voice campaign contributions.

Yes, this is hard and difficult there may not be any easy answers. There will be many opponents, from the right and the left, from the Beer and Wine lobby to the Oregon Education Association. But to restrict steak dinners, crab cakes and golf may restrict the flow of information to less-than-fully informed lawmakers.

That would be wrong. An unintended consequence. Even if we want more transparency in government, that might be doing the wrong thing for the right reason.

We don’t want to do that. What we do want to limit is the wink and nod and a $10,000 donation wrapped in a hidden agenda.

A step in the right direction, small but important, would be to return to the days when every bill introduced in the House or Senate had a sponsor.

No more namelessness for lawmakers. They need to own their legislation. If a special interest has gotten a bill into and out of committee, at least we the people have a right to know who carried their water.

It needs to be out in the open, where we can keep an eye on things. Opponents of public interest bills should be identified by name as well. That will take more work by the media, but there is no accountability if anonymity is abused.