Congress gives Wall Street Banks “Get Out of Jail Free” card

“The six largest banks will still enjoy the enormous implicit subsidy that results from the expectation that the federal government will bail them out in the event of a crisis.”

Statement on Wall Street Reform Bill

Dean Baker: “Reform Bill Will Improve Regulation in the Financial Sector”For Immediate Release: July 15, 2010 
Contact: Alan Barber, (202) 293-5380 x115

Washington, D.C.
– Dean Baker, co-director of the Center for Economic and Policy Research, issued the following statement on the passage of the financial reform bill by Congress:”The final bill passed by the Senate today and already approved by the House of Representatives will improve regulation in the financial sector. However, given the severity of the economic crisis caused by past regulatory failures, the public had the right to expect much more extensive reform.”

On the positive side, the creation of a strong independent Consumer Financial Protection Bureau stands out as an important accomplishment. Such an agency would have prevented some of the worst lending practices that contributed to the housing bubble. It will be important that President Obama choose a strong and effective person, such as Elizabeth Warren, as the first head of the Bureau to establish its independence.

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GOP: No more help for jobless, but rich must keep tax cuts

WASHINGTON — Republicans almost unanimously oppose spending $33.9 billion for extended unemployment benefits for some 2.5 million people who’ve lost them, because they say it would increase federal budget deficits.

At the same time, they’re pushing a permanent extension of Bush administration tax cuts, especially for the wealthy, which could increase federal budget deficits by trillions of dollars over the next 10 years.

How do they justify this?

“Tax policy is dynamic. If you have the right kind of tax reform, it helps generate a more dynamic economy,” said Sen. Mike Crapo, R-Idaho, a member of the Senate Finance Committee, which writes tax law. While that may be true, even the Bush Treasury Department concluded that its tax cuts increase budget deficits.

Continue reading GOP: No more help for jobless, but rich must keep tax cuts