Round One to the Banks, More to Come writes Robert Weissman:
On the Wall Street reform bill, the Senate, late last Thursday, rejected probably the most important measure proposed to reduce Wall Street power, strengthen financial stability and fortify our democracy: breaking up the banks.
By a 33-61 vote, the Senate defeated the Brown-Kaufman amendment, which would have forced the largest banks to get smaller. Three Republicans, including Richard Shelby, the ranking member of the Banking Committee, joined 30 Democrats in supporting the measure.
Although the defeat of Brown-Kaufman was crushing, it was, nonetheless, an indicator of the strength of the populist call to break up the banks and reduce Wall Street power. A sign of Wall Street’s ongoing dominance on Capitol Hill had been its success in defining the call to break up the banks as outside the bounds of legitimate debate. Wall Street succeeded in the House, which did not seriously consider proposals to break up the banks. But it could not block the issue from an airing in the Senate; and once aired, the break-up-the-banks proposal gained substantial support, notwithstanding opposition from the White House and the chair of the Banking Committee, Chris Dodd.