I had hoped to get a real update on where things stood with Wall Street — after all, you can take the girl out of the Securities & Exchange Commission, but you can’t take the SEC out of the girl! It was no surprise to me that he didn’t — or couldn’t — say much because the Senate and the House of Representatives are at that touchy reconciliation phase of hammering out final legislative language.
I was a little taken aback, though, when I asked his response to the news stories that have been critical about the proposed legislation that’s supposed to protect us consumers from the big bad Wall Street wolf. He was a smidge defensive, asking me why I would even think to pose such a question.
Actually, I thought it was one that a lot of people would want the answer to — that’s why I asked. I responded in what I thought was a respectful way — as I believed my original question had been — trying to rephrase so he’d understand I just wanted to hear his take on it, and that I wasn’t attacking him or the process. Plus the former SEC-staffer in me has a real interest in knowing how we’re going to move beyond the “disclosure is all you need” theory of Wall Street rules, because there’s no question that leaving hen house protection up to the fox hasn’t turned out so well for anyone but the fox.
If I needed any reminding about that, I’ve found it in Michael Lewis’ new book, The Big Short: Inside the Doomsday Machine, which details in an easily readable way (except for all the financial instrument acronyms) how our economy was brought down by overarching sub-prime mortgage greed. I know my libertarian friends will think I’m crazy calling for more regulation, or more effective regulation, when they think the mortgage mess is really just about personal responsibility. But I do think that’s what is needed because after reading The Big Short, and other books like Den of Thieves, there’s just no question that we don’t stand a chance against the guys who come up with all these investment ideas.
I’m all for personal responsibility when it comes to financial commitments, but when you’ve got investment bankers creating instruments specifically for the purpose of tricking people into thinking they can afford something they can’t and then taking the opposite side of betting against them, that’s when I say it’s time for some effective regulation by skilled regulators.
Even what seem like straightforward investments like our 401(k)’s are impacted by the money and influence of Wall Street. According to the House Education and Labor Committee, Wall Street lobbyists have been able to use their money sway to have fee disclosure requirements taken out of the pending bill. Now, while I generally don’t sit around reading 10Ks (anymore!), I do want to know what kind of fees are associated with a 401(k) or a mutual fund I’m investing in – some fees can be small, but some can be 20 percent or more. I’m betting you’d probably like to know about that, too. Actually, it looks like 50 million of us do since that’s how many of us are trying to sock a little away in those investments. The disclosure requirement was in the House version of the bill, but for some reason Senator Max Baucus took it out of the Senate version. Maybe that’s because he’s a little too chummy with Wall Street?
I know Senator Reid was thinking that a call with a few “mom” bloggers would probably focus on some kinder, gentler issues, but I hope he wasn’t scared off and I hope he and others will continue to be willing to actually answer our questions about financial reform and other topics we’re interested in, because we reall do care about more than just exercise for our kids and how much high fructose corn syrup is in their snacks.
We’re just trying to save and get by like so many other people and we’re up to asking the hard questions. I hope our lawmakers will be up to answering them.