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President's financial-reform record should sour many supporters' enthusiasm

October 2, 2012 - Mike Maneval
People of a progressive or reform-minded mindset may feel relieved by President Barack Obama's consistent leads in polling averages. The website RealClearPolitics places the average of the president's lead, over the past several days, at between 3 percent and 3.5 percent, roughly. Obama leads by 6 percent in Gallup's tracking poll, and the website's projection-based electoral map has 269 electoral votes leaning toward Obama, while he needs 270 votes.

Perhaps they shouldn't.

Alex Klein, reporting for the website the Daily Beast, exposes the ugly truth about oversight of the financial sector under the Obama administration. The Justice Department has failed to convict a single figure from the "too-big-to-fail" banking community - anyone - in the more than three years since taking office. The department was understaffed to handle the task, and the Treasury Department and Federal Reserve stymied investigations. When the administration has pursued action against financial institutions engaged in fraudulent or otherwise criminal practices, they've settled outside of prosecution for amounts well within the abilities of the corporations to pay without real sacrifice, and without admission of wrongdoing. The attorney heading securities fraud prosecutions in the U.S. Attorneys' Southern District of New York - the district with jurisdiction over Wall Street - prioritized cybercrimes against banks in the wake of the financial collapse rather than the banks' deceptive practices.

"Dangerous crisis-era practices," Klein reports, were "untouched" by the Obama administration. Some of the blame for the Obama administration's appalling inaction rests with Attorney General Eric Holder and Treasury Secretary Tim Geithner. The president's choice to lead the Federal Deposit Insurance Corp., Republican Sheila Bair, said, according to Klein's article, that Geithner "seemed to view his job as protecting Citigroup (from authorities) when he should have been worried about protecting the taxpayers from Citi."

But the blame deserves to rest much more widely than just on Geithner and Holder, of whom the optimistic voter concerned with financial reform can hope will not return for a second term. It deserves to rest with an ineffectual Securities and Exchange Commission, and with many staffers at all levels of the administration. And most importantly it deserves to rest with the president who chose to hire this team and these cabinet members, and to retain them as they proved not to be up to the task.

And that should sour any optimism voters concerned with the protection of consumer rights and oversight of the financial sector feel about that lead in the polls.


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