Focus on financial reform

Opinion: January 25, 2011 at 12:00a.m.

Seattle Times: “While the financial system is far stronger today than it was a year ago, it is still operating under the exact same rules that led to its near collapse.”

President Obama’s quote is as true today as it was last January.

Congress passed financial legislation in 2010, but it hardly qualifies as reform. Certainly not the re-regulation appropriate in light of the brutal lessons learned at the expense of investors, homebuyers and taxpayers.

Banking executives are lining up to receive bonuses that date to 2007, the front end of the international economic collapse. America’s largest banks, bailed out by the U.S. Treasury, prospered.

The grim reality of how little was accomplished on Capitol Hill and the reasons for so little remedial progress were recounted by reporter Christine Harper of Bloomberg News.

Lawmakers are loyal to those who make fat campaign donations and work the corridors of congressional power. Wall Street lobbyists have more voice, clout and presence than voters back home in the district.

No serious progress was made to limit the size of lenders, separate commercial and investment banking, and ban the trading of derivatives with taxpayers covering the gambling losses.

Revolving door

The revolving door between the regulators, Congress, the executive branch and lucrative private employment ensured sympathy stayed with keeping a light rein on the financial industry.