Arianna Takes Aim At 'Toothless' DC Financial Reform

By Arianna Huffington
Posted: May 25, 2009 08:17 PM

Everyone Agrees We Need to Reform Wall Street... Just Like After Enron

Remember how during the 2008 campaign there came a moment when candidates hoping to win the White House realized they had to declare that, like Obama, they were all in favor of "change"? Hillary did it. McCain did it. So did Romney. Giuliani too.

In the same way, today everyone agrees that we need reform of our financial system. Even Wall Street knows it is inevitable.

So the question becomes: are we going to get real reform or are we going to get the DC version of "reform"?

For a snapshot of what DC reform looks like, take a look at the 26-page memo that Frank Luntz put together to show Republicans how to kill health care reform. Here is his unequivocal advice:

"You simply MUST be vocally and passionately on the side of reform." The trick, he says, is to "be for the right kind of reform" -- ie the kind of reform that doesn't reform anything.

We've seen this movie before, just a few years ago. Back then the stars of the show were Enron, Tyco, Global Crossing, and WorldCom. After their orgy of greed and fraud was exposed, everyone suddenly demanded reform. But what we got instead were window-dressing changes and band-aid legislation. And the prevailing philosophy that the free market would regulate itself was, in effect, allowed to remain in place. Indeed, it was given even freer rein.

So now it's déjà vu all over again. You know the drill: first comes the shock, then the outrage, then a few high-profile show trials, then the punishment of a few culprits, then some half-measure reforms, and then we all move on... until it starts again.

Right now we find ourselves in the middle of that cycle.

The financial bandits believe that if they just lay low for a bit, the storm of outrage will blow over. They can just wait it out, feed the people a few Luntzian reformist scraps, and then return to the party.

And they may well be right.

As we wait for the Obama administration to announce its plan for comprehensive reform of the financial regulatory system, the signs don't look promising. Read the rest of story at the Huffington Post.

Watch this video of Yahoo's Tech Ticker Aaron Task interview with Arianna about the Obama administration and Wall Street. Aaron is one of the authors of Bailout Nation.For part 2 of the interview Arianna and the Media click on this link.