The House and Senate have reached an agreement and we have a financial reform bill. That means we'll see significant improvements over the status quo as it existed yesterday. It also means we still haven't addressed the gravest risks to the economy. And for those of us who care about this country, it means that we still have work to do. We must be the voices of reason, the ones who praise what's been accomplished but call for even deeper reforms going forward.
This bill has a number of very positive features, and progressive voices helped build the momentum for them: We'll see an audit of the Federal Reserve, which will shine a light on the hidden workings of the crony-ized banking system. A Consumer Protection Bureau will be created to protect people from bank predators. We'll see an end to the cynical speculation in food and fuel prices that have wreaked havoc on household budgets throughout the nation. We'll also have a new provision that gives the SEC authority to ensure that brokers act with "fiduciary responsibility" toward their clients (after a period of study). While this most directly benefits wealthier investors, it will help end abuses like the Goldman Sachs ABACUS program that nearly destabilized the entire economy.
Those who want to fall into cynicism and despair can find material to feed that worldview, if they're so inclined. This legislation will not stop Wall Street speculation in derivatives, and our financial system will still be dominated by a few "too big to fail" banks, which means our economy is still in danger. Auto dealers got their sleazy carve-out from the consumer protection bureau. It was a frustrating spectacle to watch elected officials on the Hill shoot down amendments that would have solved these problems. And cynics might be forgiven for believing that Treasury Undersecretary Neal Wolin's blog post yesterday , where he overpraised the bill's accomplishments and said "we don’t have to wait until (the bill's done) to know what reform will look like,” was a signal to Hill negotiators that they could gut the Lincoln amendment without White House objection - which they promptly did.
But, to those who would take that route, consider the words of labor leader Joe Hill: Don't mourn, organize. We've learned that elected officials in Washington will respond to eloquent and impassioned voices calling for change, whether those voices are raised on phone calls to representatives, in letters and commentary, or in voting booths in Pennsylvania and Arkansas. But remember that elected leaders are human. If they come to see the progressive movement or any other voting bloc as relentlessly negative, they'll stop listening.
And, for those who celebrate what this bill accomplishes, a Joe Hill variation: Celebrate, then organize. The two activities aren't mutually exclusive. In fact, that should be the preferred approach. Without the principled stand of some Democratic leaders in the White House and on the Hill, coupled with some surprise moves by courageous Republicans, we wouldn't have the reforms we have today. So, by all means, celebrate. Reward our leaders for what they've done right, just before we go about the business - our business, as citizens - of pushing them to do more.
What can we do to frame the argument going forward and build momentum for deeper reform? It seems to me that there are five things that must be done:
1. Create the right context
Are people saying that President Obama is no FDR? Let them know that FDR was no FDR either - at least not at first. Zach Carter  is right to point out that it took years for Roosevelt to enact all his banking reforms. In an equally strong historical parallel, a conservative bank-oriented faction persuaded FDR to focus prematurely on the deficit, as Obama is being persuaded now by the "AmericaSpeaks " contingent. It took years of trial and error before FDR came to realize that this concession was undermining the recovery he had put into motion.
2. Criticize - but don't lose perspective
Let people know that the President is right when he says that this is the most significant financial reform since the 1930s. And remind them that it took several years for FDR and Hill leaders to get that right, too. Imagine how different - and how much worse - history might have been if Roosevelt and his allies had gone down to defeat in the polls because nobody bothered to balance their criticisms with recognition of their accomplishments.
FDR became a great leader because he had the capacity and the willingness to learn - from his critics, from events, and even from his own mistakes. That's the standard to which we should hold our leaders.
3. Keep framing the moral argument
Too often we forget that there are basic issues of right and wrong involved here. We're perpetrating an unethical system as long as bankers can gamble with discounted Federal Reserve money or other public subsidies, and as long as they know taxpayers will bail them out whenever they lose. When financiers can make more money speculating than they can serving consumers and smaller businesses, the system isn't working for its intended purpose.
California readers were outraged to read yesterday that welfare recipients can use the debit cards issued by the state at ATMs in casinos , making it possible to receive a public subsidy and immediately gamble with it. Isn't it ironic that more voters don't feel the same level of outrage when bankers do it? Bankers, who hardly need the money, receive far more in public funds for their gambling - and they endanger the entire system when they do it.
Concerned citizens can and must keep making the case for financial reform as a moral issue.
4. Keep pointing out the risks
Those of us who keep warning that we're still at risk must feel sometimes like Kevin McCarthy in Invasion of the Body Snatchers, screaming "they're here! they're here!" as indifferent drivers whiz past in their comfortable cars. Keep those warnings coming anyway. Our system is just as much at risk as it was before this bill was finalized. Millions of people are still victims of the last crisis. There are those who suggest another downturn may be coming soon. Historical trends suggest that crises will keep returning every seven years on average - unless and until we do something to change things. From a risk management point of view, we're flying a plane with our eyes closed and congratulating ourselves that we haven't crashed into anything ... lately.
There are political risks, too, and we shouldn't hesitate to point those out. If we experience another crisis after this bill passes, voters will be ruthless toward the incumbents who celebrated its passage. Polls show that the public despises big banks, so the concessions we've seen will be a political liability - that is, until tougher reforms are enacted.
5. Look for teachable moments
There will be a temptation to put this issue behind us now that the bill has passed. But history has a way of offering teachable moments - another economic downturn, a "flash crash " like the one Wall Street experienced a few weeks ago, or the conviction of a malefactor like Bernie Madoff. Negative events are tragic, but the hard truth is that they will keep coming until we make systemic changes . They are "teachable moments" for voters and elected officials alike, and should be opportunities to speak out. The Federal Reserve audit will provide additional opportunities to inform the public.
Activists and concerned citizens should be pushing for indictments of corrupt bankers, too. There are a number of signs of malfeasance, with so many potential crime scenes to investigate that half the buildings on Wall Street should be marked with yellow police tape. A perp walk is a very teachable moment.
So, if someone were to ask me what to do now, I'd say keep those letters, emails, and calls coming - to your Representatives, to the White House, to newspapers and talk shows. Keep talking to people around you. Be unstinting in your praise for what's been accomplished and unhesitating in your demands for demand more. Their job is to respond to pressure. Our job is to provide pressure for the right things.
Financial reform has been passed. Long live the movement to demand financial reform. Let's pause for a moment of celebration ... and then get back to work.