Hell Is Other People
House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Chris Dodd may be regretting their promise to make the regulatory reform conference quite so open.
Instead of trying to reach final agreement on a range of pending issues in regulatory reform, some lawmakers used the process instead to rehash old debates like which political party was more to blame for the failure of Fannie Mae and Freddie Mac. As a result, House discussion of its proposals often took the better part of the day, with the Senate not even beginning its counter-offer until the evening.
Eight hours into debate on day two of the conference, Dodd appeared to be channeling Jean-Paul Sartre, who famously wrote a play in which the characters are trapped in hell but don't know it.
"My great fear is that we've all died and this is our purgatory," Dodd said gesturing at the conference. "We are going to spend the rest of our lives here in conference."
By Thursday evening, both sides seemed a little fed up with one another.
At one point, Frank expressed frustration with how the Senate conducts its own internal negotiations, noting that Democrats in that chamber cut deals with Republicans who still voted against the bill.
"It's an interesting concept," he said.
"We are told that we have very bipartisan agreements which apparently led up to a partisan vote and I'm a little perplexed as to the untouchability of bipartisan agreements joined in by people who voted no."
Frank conceded that Democrats must have at least minimal support from the GOP in order to secure 60 votes to stave off a veto threat, but did not understand why it should honor agreements with those who still oppose the legislation.
"I do want to say the fact that there was an agreement in the Senate amongst senators, particularly some who are going to vote no, is not binding on us, and I hope people understand that," he said.
Dodd responded to Frank's point by saying, "That's why we have a bicameral system. We keep each other mystified."
Given the drawn-out debate over U.S. regulatory reform, it's hard not to notice how quickly our friends on the other side of the pond seem to move on these kinds of issues.
The U.K.'s chancellor for the Exchequer gave a speech in London last week and — poof! — an entire national regulatory system was turned on its head.
The Financial Services Authority, created in equally out-of-the-blue fashion in 1997, was given the pink slip, leaving Bank of England in charge of supervisory duties again after a transition period. The move left reform-weary Americans to wonder: how did they just DO that?
"It is extraordinary, but it is just very British," explained Michael Foot, chairman of the U.K. office of Eugene Ludwig's Promontory Financial Group, and a former Bank of England official who helped develop the FSA. When the FSA was created under a strong, majority government, he noted, "a lot of people didn't want it but everyone cooperated because they knew the government would deliver it."
The re-engineering process might go less smoothly under the current minority government, but it no doubt will be easier than hammering out financial reform in the United States.
"We respect your separation of powers," Foote quipped, "but, boy, does it cause you problems."
As the government calculates the tab for the Troubled Asset Relief Program, it appears Uncle Sam could get more than just money back from those accused of trying to defraud Tarp.
In the 16-count indictment against Lee Bentley Farkas, the former Taylor, Bean & Whitaker chairman charged with trying to scam the program to help both Colonial Bank and his flagging company, the government laid claim to Farkas' fleet of high-end and classic cars in the event he is found guilty and cannot pay the proposed damages.
Topping the list of nine vehicles is a 1963 Rolls-Royce, followed by a 1929 Ford Model A. According to the court documents, Farkas also owns a 1973 Triumph TR6, 1970 Cadillac El Dorado, 1958 Mercedes-Benz Cabriolet 220, 2008 Infiniti, 1961 Porsche and 1937 Packard.
If that weren't enough, the "forfeiture notice" also includes five real estate properties.
Farkas' lawyer did not return a call seeking comment.