Congressional Democrats blew a kiss to Wall Street last week while Senate Republicans were giving Main Street a swift kick in the, well, you know.
The kiss came when Democratic House and Senate negotiators worked out a weakened financial regulation measure in Friday morning's wee hours.
The kick was delivered when Senate Republicans once again blocked passage of a multi-faceted stimulus measure.
Admittedly, the financial regulation legislation Democrats hope to pass before the July 4 recess would do several good things. But it fails to adequately address a couple of issues that were at the heart of the worst economic collapse since the Great Depression — hedge funds and derivatives.
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Under what is now being called the Dodd-Frank Bill (after the two Democrats who spearheaded the reform efforts, Senate Banking Chairman Christopher Dodd and House Financial Services Chairman Barney Frank), bank holding companies will still be able to invest up to 3 percent of their capital in speculative hedge funds, a loophole that could put billions of dollars of taxpayer-backed holdings at risk.
In another step backward from the original intent of the legislation, the weakened Dodd-Frank would allow banks to retain control of their most lucrative derivatives, including the credit default swaps some financial institutions used to turn a profit from loan failures.
A proposal pushed by Democratic Sen. Blanche Lincoln of Arkansas would have forced banks to spin off all derivatives into a separately capitalized affiliate, thus keeping banking deposits from being put at risk.
Even a weakened regulation bill was enough for President Barack Obama to declare victory. But with all the troubles piled at his door, what president wouldn't spin a win out of some relatively thin air?
While the weakening of the financial regulation bill was disappointing, Senate Republicans' continued stonewalling on the jobs bill is nonsensical.
It is counterintuitive because it deprives the economy of money that could keep the recovery moving along toward the day when Uncle Sam once again can balance his budget and start paying down the debt obstructionist Republicans trot out as the bogeyman in all discussions of stimulus spending — except the bailout of their Wall Street banking friends.
Without the extension of expanded unemployment benefits in this bill, 200,000 Americans will lose their benefits each week. By June 30, 1.2 million people will have lost benefits since the last extension expired.
Without the bill's $16 billion in new aid for states, thousands of state and local government workers will find themselves on the unemployment line. At least 30 states, including Kentucky, built budgets around an expected extension of expanded Medicaid benefits.
Kentucky's budget banked on $238 million from that source. Without it, Medicaid spending takes a drastic hit or jobs get cut elsewhere. Either way, more money gets taken out of Main Street's economy.
And that's not a smart thing to do in the midst of recovery.