The Working Families Party has sent out an email to supporters encouraging them to write to east side Congresswoman Carolyn Maloney and urge her to rethink her opposition to a component of the Dodd-Frank financial reform bill which would bring transparency to derivative swaps.
Ms. Maloney has been a fairly reliable ally for most liberal causes, something the left-leaning WFP makes note of in their email:
When a friend is about to do something dangerous, you have a responsibility to try to change the friend’s mind.Only 18 months after strongly supporting the Wall Street reform bill (Dodd-Frank), Congresswoman Carolyn Maloney, who represents parts of Manhattan and Queens, is siding with Wall Street lobbyists and Tea Party conservatives by co-sponsoring a bill that undermines transparency.
The strike against Ms. Maloney takes on particular relevance since the retirement of Barney Frank. Mr. Frank is the ranking member of the House Financial Services committee, and Ms. Maloney is second-in-line, behind California Rep. Maxine Waters.
Last year, Ms. Maloney faced a primary challenge from Reshma Saujani who argued that the longtime incumbent has been too hard on Wall Street, so it is a little interesting that she is catching flak from her other flank as 2012 approaches.
The full WFP email is below:
Will you join with us in calling on Rep. Maloney to reconsider, and stand strong for reining in Wall Street speculators?
We’ll deliver our petitions to Rep. Maloney’s office in person.
Working Families has supported Rep. Maloney in the past, because she’s been a reliable ally for working families and for the Main Street economy. In addition to backing the Wall Street reform bill, she championed legislation to stop usurious credit card interest rates.
That’s what makes her turn-around distressing. Recently, she came out against the stock transfer tax that would rein in reckless short-term transactions like the ones that caused the crash. Now, she’s working to undermine transparency on Wall Street.
Here’s what this is about, in a nutshell:
The Wall Street reform bill passed by Congress in 2010 included a number of important provisions. One was the establishment of a Consumer Financial Protections Bureau, championed by Elizabeth Warren. Another was to establish transparency on the ‘swaps’ market.
A swap is a type of financial instrument that can be useful. Farmers might use a swap to buy insurance against a bad harvest. But too often, swaps are made one-on-one, with no public listing of prices. No one but the trader knows if the farmer is getting a fair deal.
What’s more, keeping consumers and businesses in the dark can be dangerous. According to this weekend’s New York Times, “When markets are opaque, the risks grow that problematic positions, like those that felled the American International Group in 2008, might once again create financial turmoil and spread through the system.”
The Wall Street reform bill passed in Congress requires some transparency on those deals. But Rep. Maloney’s proposal would let more deals stay in the dark.
It sounds complicated. But dealing in the dark just gives Wall Street executives one more way to squeeze the rest of us. And when those deals are big enough, they risk throwing the whole economy into turmoil again.
That’s why we’re calling on Representative Maloney to stand firm for regulating Wall Street, and shedding a little sunlight on the swap market.
Join us in calling on Rep. Maloney to do the right thing here:
The economy still hasn’t recovered by the damage the unregulated banks caused a few years ago. We can’t let the banks write their own rules any more.
Thanks for all you do.
-Bill Lipton, WFP