President Obama and Too Big to Fail

Dear Friends,

Senators Sherrod Brown (D-Ohio) and Ted Kaufman (D-Del) introduced an amendment to the financial reform bill that would have actually limited the size of banks so that they would not be too big to fail.  Unfortunately, the amendment failed 60-33 and got no support from President Obama or anybody else in the Obama Administration.  How can it be that everybody both Republicans and Democrats say they don't want banks that are too big to fail, but an amendment that actually does that doesn't pass and doesn't get White House support.

Here is the first paragraph of a press release by the White House on January 21, 2010:

President Obama joined Paul Volcker, former chairman of the Federal Reserve; Bill Donaldson, former chairman of the Securities and Exchange Commission; Congressman Barney Frank, House Financial Services Chairman; Senator Chris Dodd, Chairman of the Banking Committee and the President's economic team to call for new restrictions on the size and scope of banks and other financial institutions to rein in excessive risk taking and to protect taxpayers.

You would think that with all those important people in favor of limiting "the size and scope of banks" that the Kaufman-Brown amendment would have passed easily.  But President Obama did not speak out in favor of it, and as usual the Democratic leadership caved into the demands of the big banks.  Apparently, money matters more than good policy.

Here are a couple of articles that I would recommend.  The first is by Gretchen Morgenson in The New York Times (here).  The second is by Andy Kroll from Mother Jones (here).

One might argue with the specifics of the Kaufman-Brown amendment but that was not the issue.  President Obama refused to put his support behind true financial reform that might have had a chance of actually preventing future bailouts of banks that are too big to fail.

Please write President Obama and let him know that you know he may be talking the talk, but he is not walking the walk. (here)

Thanks for reading and please comment,
The Unabashed Liberal