Michael Gaynor
The true reformer is Wendy Long, not Kirsten Gillibrand
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By Michael Gaynor
April 23, 2012

After Dodd-Frank, true reform IS needed more than ever and Long wants to accomplish it.

Wendy Long (www.wendylongfornewyork.com) is challenging New York's junior Senator, Kirsten Gillibrand, National Journal designee as the most liberal United States senator and Senate Majority Leader Harry Read's pick as the "hottest" Senator.

Long's campaign is about constitutional fidelity, increasing employment and promoting prosperity.

That's what America needs, and Long actually knows what she talks about.

Gillibrand's campaign website (www.kirstengillibrand.com/issues)lists fifteen issues on which Gillibrand comments.

Financial regulation is not one of them.(www.kirstengillibrand.com/issues).

It is a critical issue.

Experience has shown that Gillibrand's ill-considered support of the Dodd-Frank financial reform law has been bad for America and especially bad for New York.

Gillibrand voted for the fundamentally flawed law in 2010.

A United States senator from New York should have known better.

Gillibrand spokesman Glen Caplin asserted that Gillibrand "fought hard for important Wall Street reforms like comprehensive regulation of over-the-counter derivatives and the creation of the important Consumer Financial Protection Bureau to serve as a new watchdog for consumers" (www.capitalnewyork.com/article/politics/2012/02/5318350/schumer-gets-quieter-regulatory-issues-gillibrand-steps-champion-wa?page=all0.

Politico (www.politico.com/news/stories/0511/55223.html#ixzz1sg4QcxCA
) quoted Senator Richard Shelby (R-Alabama) on how the deadly sausage was made, as follows: "The State of New York had a significant voice on the Dodd-Frank conference committee but was silent when Republicans raised concerns about the breadth and imprecision of the statutory language. Their failure to act has now put our markets and economy at the mercy of the regulators."

On April 20, 2012, the Wall Street Journal published an oped by Long titled "Financial Regulation Is Hurting New York" and subtitled "The state deserves a senator committed to preserving its leadership in world markets" (http://online.wsj.com/article/SB10001424052702304432704577348302603397264.html?mod=googlenews_wsj). For nonsubscribers, the whole article is available here: http://e2.ma/webview/38q6e/30431498c3f6e18b90764ce8369cb3f3.

Long made the case that "New Yorkers everywhere are being crushed by federal regulation" and made Dodd-Frank "Exhibit A."

Long pointed out that Dodd-Frank actually is hindering economic recovery instead of putting Wall Street on a sounder footing.

Dodd retired after his bill was passed rather than risk being defeated, and Frank is retiring at the end of the current Congress after a tougher than expecting race in 2010.

Gillibrand strongly supported the bill and Long is calling for "fir[ing] regulation-giddy senators such as...Gillibrand," or else "the U.S. will be unable to protect its position as the world leader in financial markets."

Long's position is sensible, simple and straightforward: "...appropriate federal regulation can encourage innovation and healthier corporate behavior. But the answer to excess on Wall Street is not excess in Washington. Dodd-Frank micromanages and second-guesses businesses, while impairing the availability of credit that is vital to economic expansion. It is a full-employment act for bureaucrats, lawyers and consultants."

Long even offered specific solutions and understandable explanations:

(1) "repeal...the Volcker Rule, which restricts banks' proprietary trading — buying and selling stock and other assets for their own account over the short term — and hedge-fund activities" because (a) "[t]here is no evidence that proprietary trading had anything to do with the financial crisis," (b) "the rule is proving unworkable," with "the covered class of transactions [not defined] with any degree of clarity or consistency" and (c) "indeterminate limitations on banks' activities mean less credit for small businesses and other borrowers."

(2) repeal the so-called "Lincoln Amendment" that "requires banks to outsource many transactions in derivatives (contracts based on the value of another underlying asset) to affiliates, even though banks have been buying and selling derivatives for years with no impact on soundness," because it "will divert capital from well-capitalized banks to new, unnecessary entities, and may drive business offshore."

(3) eliminate the Consumer Financial Protection Bureau, "the new monster agency set to commandeer 10% of the Federal Reserve budget" and "the least accountable of federal agencies, structured so neither Congress nor senior executive branch officials exercise any real control over its activities, making it constitutionally suspect," because (a) "[t]he CFPB's entire ethos is to channel more of bankers' time and resources into satisfying bureaucrats and their paperwork requirements" and (b) "[a]nalysts expect that medium-size banks will have to merge in order to better face this superagency, which means less consumer choice, not more consumer protection."

(4) Repeal Dodd-Frank's "Title VII," "which mandates the creation of new, heavily regulated trading venues for over-the-counter derivatives," because "derivatives enable parties to manage risks by making and balancing contracts for assets at future prices" and thus "are literally the lifeblood of the modern economy" and "Title VII will increase transaction costs for derivatives, impair liquidity, and push derivative trading to Asian markets."

After Dodd-Frank, true reform IS needed more than ever and Long wants to accomplish it.

Long clearly explained:

"True regulatory reform means reforming the regulators. Dodd-Frank shows the morass that is created when multiple agencies are tasked with implementing complex legislation. We need one business-conduct regulator — not the clashing Securities and Exchange Commission and Commodity Futures Trading Commission — that can focus on catching the next Bernie Madoff and MF Global, instead of engaging in turf battles and penny-ante enforcement.

"Does anyone believe we need four primary federal bank regulatory agencies? A single regulator can focus on safety and soundness. And the Federal Reserve can focus on systemically significant institutions.

"Repeal of Dodd-Frank's most damaging requirements should be at the top of any pro-growth, job-creation agenda."

It follows that electing Long to replace Gillibrand needs to be at the top of that agenda too.

For those who want to undo the damage done during the Obama Administration, the most important race for the United States Senate is Long versus Gillibrand, here in New York. Long's election will enable moderate and conservative Democrats to retake control of their party from Gillibrand's Far Left allies, President Obama and former Speaker Nancy Pelosi.

© Michael Gaynor

 

The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
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Michael Gaynor

Michael J. Gaynor has been practicing law in New York since 1973. A former partner at Fulton, Duncombe & Rowe and Gaynor & Bass, he is a solo practitioner admitted to practice in New York state and federal courts and an Association of the Bar of the City of New York member... (more)

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