Hooray for progress on finance reform

Opinion: May 1, 2010 at 12:00a.m.

McClatchy-Tribune News Service

(MCT)

The following editorial appeared in the San Jose Mercury News on Friday, April 30:

———

Could it be that Congress is capable of working together for the public good after all? So it appears — if the people make their wishes clear enough.

Senate Republicans who seemed bent on blocking anything out of the Obama administration have changed their tune on Wall Street reform. Their resistance to regulating the financial industry made them appear to be in the pockets of the institutions that plunged the nation into crisis in 2008 — and that, with elections coming up, was the wrong side to be on from voters’ perspective. So they have dropped their filibuster and appear to be working toward a compromise.

So far talks have been positive. The plan to establish a $50 billion fund in anticipation of future bailouts is gone. It was a proposal from Congressional Democrats that President Barack Obama hadn’t favored any more than Republicans did. Talks are continuing on the consumer protection provisions, where there should be room for compromise.

See, this is the way government is supposed to work. California Legislature, take note.

The main thing Obama must protect is the goal of making derivatives transparent — that is, allowing investors to see what they’re getting into. The investment instruments that crumbled during the financial meltdown, including those doomed, bundled mortgages, would not have taken in so many investors if they could have seen how fragile the elements were.

While Americans were mixed on their opinions about health care reform, liberals and tea partyers alike are pretty much of a mind that financial institutions need closer watching. The foreclosure crisis knows no ideological bounds.

Republicans couldn’t afford to go into the fall elections as Wall Street apologists. For the nation, that’s a very good thing.