Rick Sanchez seems shocked to learn that Wall Street's lobbyists out numbered the poor unpaid lobbyists working on the side of financial reform 1800 to 60. No big shock here. Rolling Stone's Matt Taibbi talked to Sanchez about that and the problems with the financial regulation reform bill that would be expected after that amount of intense lobbying on the Congress, such as not addressing to too big to fail and the derivatives market.
SANCHEZ: Now to this. You know how I feel as we have these conversations every day, and we talk about a lot of different things, you and I. But you know how I feel about conventional wisdom. As far as I'm concerned more often than not, you know, a quarter will buy you a blow pop. Conventional wisdom often will get you very little. More often than not it's more like conventional idiocy, as a matter of fact.
I want to bring in somebody who often tackles conventional wisdom as well. As you know, he works for the "Rolling Stone," Matt Taibbi. And he's writing now about this new financial reform that all of us have been reading and writing about that most have believed is the right thing to do that will salvage the situation on Wall Street and never let us have to go through what we've been through before, meaning what happened two and a half years ago.
He joins us now, and let me start -- let me start with this -- general question to you, Matt. If what they're doing is undoing the problem that led us to the meltdown itself, you know, putting back in the regulations that we needed, putting back in some of the laws we've gotten rid of, isn't that a good thing?
TAIBBI: It is, but they just didn't do enough of that. They really address add few things. There are some good things in this bill, but the really, really key thing, the big problems they left unaddressed or they did a half-measures or quarter measures, and they didn't really tackle the problems head-on.
The key things are too big to fail, they didn't really fix that problem, and they didn't really solve the derivatives issue very well.
SANCHEZ: You write about an army of banking lobbyists. You write about them offering senators and congressmen, well, you know, deals. I mean, these guys got to stay elected. What do they get in return?
TAIBBI: Well, you know, I think the number one thing you have to remember is that they get access. I think there were only -- the number one progressive reform agency organization, Americans for Financial Reform, they only had 60 volunteer lobbyists, and that's against about 1,800 paid Wall Street lobbyists that were in on this bill.
SANCHEZ: Say that again. Hold on. Give us those numbers again. How many lobbyists -- how many good guys going against the bad guys? Pardon me for characterizing it that way.
TAIBBI: There were 1,800 financial services lobbyist, from what I understand, and there was really only one organization lobbying on the other side, Americans for Financial Reform, and they had 60 people, and they were all unpaid. They were all volunteers.
SANCHEZ: I bet they didn't do very well.
TAIBBI: Physically, even on the Hill -- you know, they did all right, actually. But that just shows you how they were on the right side. That's why.
SANCHEZ: So what is wrong with this financial reform legislation? What does it not do that it needs to do to make sure that what happened in 2007 doesn't happen again?
TAIBBI: Well, again, the really, really big thing was the too big to fail question. I mean, the really big issue we had in the last decade was we got these companies that were so massive, and there's so much concentrated capital that when -- their irresponsible. And when things go wrong it creates massive financial disasters that ripple throughout the entire planet.
And we didn't tackle that problem. There was an amendment that was offered by Ted Kaufman Sherrod Brown of Ohio that would have mandated the breakup of companies if they got too big, went over certain numerical, and that amendment got beat badly in the Senate.
There was also an amendment put forward by Carl Levin and Jeff Merkley from Oregon that would have restored part of the Glass-Steagle Act, keeping investment banks, commercial banks, and insurance companies separate. And that never got voted on through a very strange senatorial procedure.
So those two things didn't happen, and those are pretty important things.
SANCHEZ: They're trying to reconcile this between the House and Senate. We'll see they read your article and try and tie in some of those loose ends. Matt Taibbi, as usual, I enjoyed talking to you. Keep up the good work.
TAIBBI: Thanks, Rick.
Transcript via CNN.
Update: A side note on Taibbi. He's leaving True/Slant per our team at Crooks and Liars. Forbes bought out True/Slant so I would assume as the rest of us did that Taibbi wasn't exactly a good fit there with the new ownwership. That's too bad since I enjoyed checking out Taibbi's blog there as well as his work at Rolling Stone.
