StupidiNews Focus

Two StupidiNews items today I feel warrant a closer look because they're related as to why Obama and the Democrats have a major Wall Street problem.  First, Wall Street pulled down record cash in 2009, having an even better year over 2007.

The 38 largest financial institutions on Wall Street will pay out a total of $145.85 billion in compensation for 2009, an 18 percent increase over 2008 and "slightly more than in the record year of 2007," the Wall Street Journal reports.

(By "slightly," the Journal means a 6 percent increase over 2007, amounting to some $8 billion.)

Contrast this with the state of affairs on Main Street, where average earnings increased 2.2 percent in 2009 -- and that number excludes the 7 million jobs lost since the recession began.

So what does Obama plan to do about it?

The president's plan would see the largest institutions bailed out under TARP pay out a total of $90 billion to the government. Only firms that took TARP money, and have more than $50 billion in assets, would be required to pay. That amounts to about 35 US-based companies, with the big-name investment banks, like JP Morgan and Goldman Sachs, paying the largest share of the fee.

But the banks targeted by the fee are already making sounds suggesting they will fight it tooth and nail. Politico reports that the banks plan to argue that the fee will cost the US economy $1 trillion in lost potential lending -- a questionable claim, given that the fee will at most represent 5 percent of profits at the banks (according to the Journal), and given the overall lack of bank lending since the start of the recession.

Again, this seems like a no-brainer for the Dems.  Most Americans haven't seen a six percent raise over 2007, in fact Americans have seen their hours, benefits, pay and opportunities remain exactly the same or in most cases, cut sharply.  But the problem isn't Obama, it's Democrats in Congress who simply refuse to do anything about it -- Democrats like Chris Dodd.

Senate Banking Committee Chairman Christopher Dodd has indicated he may consider dropping the Consumer Financial Protection Agency from the financial regulatory overhaul bill he is drafting with members of his panel, according to people familiar with negotiations.

Dodd, 65, may agree to shelve the proposed agency, a priority for the Obama administration, and replace it with a division within another federal agency to help advance the broader bill, said the people, who declined to be identified because negotiations are ongoing. The Wall Street Journal reported the matter earlier, citing people it didn’t identify.

Again this should be a no-brainer.  But the Democrats are the ones who can kill this bill and frankly a bill to really and fully regulate the banks is harder for the Democrats to pass than health care reform.  Dodd is retiring.  He's free to make whatever votes he wants to...but his colleagues in the Senate are not.  They know that without backing of the financials, no candidate can win an election.  Besides, Dodd's going to need a job in January anyway.

America is run by oligarchs, and the biggest of them are the financials.  Digby reminds us why we should fight them, but it may soon be much harder to fight corporate influence on elections.

And that still doesn't solve the perception that the Democrats are even more in the pockets of the banksters than the Republicans were.