Tales from the Trail

Washington Extra

It was two years in the making, runs to 2,300 pages, took three Republicans to pass it, and 11 pens to sign it into law. President Barack Obama put the seal on a drastic overhaul of the rules governing Wall Street and the banking industry today, using a separate pen for each letter of his name. FINANCIAL-REGULATION/OBAMA

Behind him, Joe Biden chatted throughout the signing ceremony, often with his back to the camera, so we just have to assume the vice president thinks this particular legislative victory is also a “big … deal”.

Influential business groups lined up with Republicans to criticize the new law for the 533 new regulations they say it imposes, while Obama’s one-time friend, JP Morgan CEO Jamie Dimon, was not even invited to the signing ceremony. No sign of a rapprochement in the relationship between the presidency and Big Finance, as Obama used the occasion to take another swipe at “unscrupulous” lenders and the “abuse and excess” that lay behind the financial crisis.

It was Obama’s second major legislative victory of the year, confounding all those obituaries of his presidency written in the wake of Scott Brown’s Massachusetts victory in January. But there was one other set of numbers today that the president may find particularly uncomfortable reading.

Another poll, this time from Quinnipiac, showed the president’s approval ratings falling to a new low, and independents continuing to desert the Obama cause. More voters are now saying they would pick an unnamed Republican over Obama in 2012, although at this early stage the president still comes out ahead when pitted against Sarah Palin.

from Summit Notebook:

What if there were no “too big to fail”? Fed’s Hoenig has a vision

USA/Democrats and Republicans alike on Capitol Hill say they want to toss out the concept of "too big to fail" in the financial regulation reform they are tussling over. That way if a financial firm is going to go under, it will go under, with no thought for a taxpayer handout.

Since the concept of "too big to fail" has yet to be erased by law, and its demise yet to be tested by a failing financial institution, it was interesting to hear how Kansas City Federal Reserve Bank President Thomas Hoenig envisioned the financial industry without that concept to lean on.

Looking back in time -- "If you had a clear resolution process, and you had clear rules on leverage," a domino-like string of large bank failures may have been less likely.

Who are you calling a “punk staffer”?

House Republican leader John Boehner’s comment about “punk staffers” involved in the writing of the financial regulation bill did not seem to sit well with White House economic adviser Lawrence Summers.

FINANCE/SUMMERSIn an appearance at the National Press Club, Summers made a point of bringing up the comments by Boehner, who urged bankers to stand up for themselves and said they should not “let those little punk staffers” working on the bill take advantage of them.

Boehner may not have been spoiling for a fight, but he got one.

Summers pressed his criticism of lobbyists who the Obama administration accuse of trying to water down the proposals for tighter regulation of Wall Street.

from MacroScope:

Another kind of death panels

U.S. Representative Barney Frank has never been shy about expressing his opinions. His opening remarks at a hearing he chaired with Treasury Secretary Timothy Geithner on Wednesday was no exception. Frank poked fun at a political squabble over healthcare reform as he detailed his position on what to do about non-bank financial firms considered "too big to fail."

    "There will be death panels enacted by this Congress, but they will be for non-bank financial institutions that will not be considered too big to die.
    I say that because we have this euphemism that we are going to be 'resolving' these institutions. It has not been my experience that when someone says they are going to resolve something, they kill it. We are talking about dissolution, not resolution. We are talking about making it unpleasant for the entities. This is not a fate people will want."

Have lessons been learned on Wall Street?

President Barack Obama went to Wall Street on the one-year anniversary of the Lehman Brothers collapse to make a push for greater regulation of the financial industry. OBAMA-REGULATION/

He’s proposing creating a “resolution authority” to end the concept that some firms are “too big to fail.” And Obama is hoping that financial regulatory reform gets passed this year.

Obama had some words for those who defend the status quo or argue for less regulation. “There will be those who engage in revisionist history or have selective memories, and don’t seem to recall what we just went through last year,” he said.