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Last Thursday the Senate passed the ‘‘Restoring American Financial Stability Act of 2010’’ with a 60 to 38 vote.  Considering the bill is 2300+ pages long, it isn't an easy task to find out what's in it.  Our president assures us that the overall objective is consumer protection.  He assures us that bailouts will be a thing of the past.  Yet, some argue that these are empty promises, and that the real problems are not being addressed.

Thomas Ferguson, political scientist and professor at the University of Massachusetts, Boston, gave a detailed interview to The Real News network concerning the bill.

“It makes some marginal changes but it does not attack any of the fundamental problems that got us into this… financial crisis back in 2008.″

“The too-big-to-fail problem is not even tackled,” but rather it may “lock in” the positions of the largest banks. The new council of regulators contains “precisely the people who failed.”

“They didn’t tackle the derivatives problem.” They let the big banks keep about 80% of what they have, with an exchange market intended to (eventually) require prices to be posted, hopefully limiting corruption with transparency. 

“The derivatives business powerfully reinforces too-big-to-fail.” Simply put: if you’re about to make a risky investment, wouldn’t you gravitate to a larger bank, one that would be less likely to go under due to risky investments?

The “Volcker rule” was a disappointment.  “Too-big-to-fail is still with us.”

The audit position for the Fed is “good,” however was very “watered down” in the end.

Frankly, Professor Ferguson was not impressed with the bill. He also brought up the following fun (or sad) fact, recently reported:

“More than 1,400 former members of Congress, Capitol Hill staffers or federal employees” have been hired to lobby for the bill, through what the Washington Post calls “the revolving door between government and Wall Street,” which “spins at a dizzying pace.”

Rolling Stone’s Matt Taibbi has had a couple of ripe years professionally, thanks in large part to his contributions explaining our economic collapse. In an interview with Democracy Now!, Taibbi reveals the overlapping of government positions and former leaders of unscrupulous financial institutions.

For instance, “the number two guy at the Treasury, Mark Patterson, is a former Goldman Sachs employee.” And Robert Rubin (Secretary of the Treasury under Clinton, head of Goldman Sachs, Citigroup Executive, etc.) still demonstrates considerable influence over the White House. “Timothy Geithner is a former Rubin aide, and he’s the head of the Treasury.”

As Policy Analyst Richard (RJ) Eskow recently wrote:

To call Robert Rubin an overpaid riverboat gambler would be to do a disservice to riverboat gamblers.

[…]

Rubin was Treasury Secretary by then. His appointment was momentous in one way: It was the first time in history that the Treasury Secretary came from the “new banking” world — the one that functioned parasitically, using “innovative” tools to make money without any real connection to business activities that build a sound economy. His appointment was a victory of the unreal economy over the real.

[…]

Robert Rubin’s gambling career ended with other people paying his debts…

Huffington Post

Taibbi continues, saying: “Larry Summers… was an aide to Rubin… it’s all the same camp of Rubinites…”

Eerily, there are new derivative markets on the horizon. Most notably, the carbon credit market, which “Goldman Sachs is heavily invested in.” This is “basically just a tax on pollution,” but “instead of doing it as a straight tax, they create—they’re going to create this new commodities market…”

In conclusion, he says that “the major parts of it have been severely watered down,” referring to the Volcker rule and the Blanche Lincoln amendment. Overall, Wall Street probably sees many aspects of this bill as a “triumph”.

"I think Wall Street thinks they’ve really dodged a bullet with the passage of this bill yesterday.”

Not surprising, considering the fox has built-- and will be guarding-- the chicken coop.