Roadblock Republicans At It Again

by: Jennifer Daler

Mon Apr 19, 2010 at 08:01:06 AM EDT

And so-called "moderates" Susan Collins (R-ME) and Scott Brown (R-MA)

moderate Republican Scott Brown (R-MA), once considered a swing vote on regulatory reform, explicitly threatened to vote to block the bill from even being debated.

Sen. Susan Collins (R-ME) also said she'd vote to block debate on the Democrats' bill, unless Republicans get to take a crack at it, but that was before the concession on the liquidation fund was first reported.

And our own Judd Gregg (R-NH)

"We want to be back at the negotiating table, and the way we get there is by making it clear that they're not going to be able to pass it," Gregg said. "We're not going to let it off the floor unless they come back and negotiate with us."

How can one side negotiate with the other when there have been no substantive ideas presented by that side?  Blocking is all they seem to be able to do. Wall St. trumps Main St. on their list of priorities.

The Republicans started loudly objecting only after Senator Blanche Lincoln, an Arkansas Democrat who is chairwoman of the agriculture committee, took an unexpectedly strong stand in favor of reining in financial derivatives, the complex and largely unregulated instruments that were at the heart of the financial crisis. (Her committee has jurisdiction, because derivatives have long been used to trade commodities.)

I wonder whether Lincoln's "unexpectedly strong stand" has anything to do with her being seriously challenged in a primary by Bill Halter.

For those, like me, who don't exactly know what derivatives are, here's a definition from Forbes's Investopdeia

A security whose price is dependent upon or derived from one or more underlying assets. The derivative itself is merely a contract between two or more parties. Its value is determined by fluctuations in the underlying asset. The most common underlying assets include stocks, bonds, commodities, currencies, interest rates and market indexes. Most derivatives are characterized by high leverage.

Back to the Times

Of all the regulatory changes under consideration, the outcome of derivatives reform is arguably the single most important issue for the banks. Why? Because derivatives are where the money is.

Where the money is...until it isn't. And then who's left holding the bag? Not the big banks and their executives. Goldman Sachs, now facing multiple fraud investigations in the US, Great Britain, and Germany, is paying $5 billion dollars in bonuses to staff for three month's work. This is a bank that had to be bailed out in three countries because of mortgage derivatives:

The U.S. charges against Goldman Sachs relate to a complex investment tied to the performance of pools of risky mortgages. In a complaint filed Friday, the Securities and Exchange Commission alleged that Goldman marketed the package to investors without disclosing that the pools were picked by another client, a prominent hedge fund that wanted to bet the U.S. housing bubble would burst. Within months, most of the mortgages had been downgraded as the U.S. housing boom went into reverse and the securities fell sharply in value.

Goldman Sachs already is facing an EU investigation into a 2002 swap deal it carried out with Greece that may have helped hide the extent of the country's financial troubles.

This is probably the tip of the very, very large iceberg that the Titanic world economy hit. But the ones responsible are in their luxury lifeboats at our expense. And it seems the GOP is okay with that.

It's more important to fight Obama tooth and nail than to participate in the process. The deregulation begun under Ronald Reagan has proven to be a failure.  We tried it. It led to the highest unemployment in half a century, people losing their homes, their savings. It's hit New Hampshire in a myriad of ways, including an alleged Ponzi scheme.

The moniker "moderate New England Republican" is headed for the dustbin of history, replaced by party discipline. The candidates for national and state office are more interested in attending tea party rallies than communicating solutions to the very real problems we face. And that's a shame, because as much as I would probably disagree with their solutions, it's better to have more ideas than less.

"Just say no" is not an option.