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I find it rather interesting to read about how President Obama and many of his Democratic cronies are desperately pushing for financial regulatory reform. It makes me wonder why such legislation has become such a pressing priority. After all, both President Obama, and many Democratic lawmakers have financially benefited from the likes of Wall Street’s heavy hitting investment houses such as Goldman Sachs. This raises questions about who will benefit from the financial reform legislation that both the administration and Democrats in Congress are desperately pushing to pass.
Obama's $995,000 from employees and executives at investment bank giant Goldman Sachs is the most a politician has raised from a single company since the 2001 campaign finance reform law.
Earlier this month, a hedge fund manager at the center of the Goldman Sachs fraud case held a fundraiser for Schumer in New York.
With such a convenient relationship between politicians who have benefited from Wall Street contributions, it seems worth examining the legislation to determine just what it offers for Wall Street. Will this financial regulatory bill protect taxpayers from greedy investors and big government, or does it just pave the way for future bailouts that allow Wall Street to shift their losses to the public?
Recent reports have indicated that President Obama may want the $50 billion slush fund to be used for bailouts removed from Sen. Dodd’s “Restoring American Financial Stability Act” of 2010. But Obama is supporting an even bigger bailout provision for big banks. Writing in BG, Brian Darling of the Heritage Foundation reports:
The irony is that the Obama Administration supports a different provision in the bill that provides an even bigger bailout of Wall Street. The other provision, which appears in both the House and Senate bills, provides the Federal Reserve unlimited amounts of money in the form of “loans” to failing businesses. If you like the AIG bailout, get ready for that style of bailout for companies deemed to be friends of the Fed and “too big to fail.”
The new drafts expand this authority of the Fed and grants them an increased level of secrecy with regard to the granting of these loans.
Clearly, the legislation sought by Obama and the Democrats provides potentially huge benefits for Wall Street that may hurt the average American taxpayer. Rather than safeguard taxpayers and our economy, this legislation embraces banks deemed “too big to fail” by allowing them to keep their profits in the good years while leaving the door open to shift their losses in the bad years to the taxpayers.