Wall Street And Its Rents

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Matt Yglesias points me to Daniel Gross, who writes in Slate about the history of Wall Street opposition to regulation and reform:

For the past several decades, Wall Street has continually told Washington that if the Street can’t do things the way it always has, and if the government changes the rules to mandate greater transparency and customer protection, that the geniuses in Lower Manhattan won’t be able to make money, and it would stunt the industry. They’ve been wrong every time.

It’s worth noting that in all of Gross’s examples, the geniuses were actually right: they complained that they’d make less money, and they did. The reforms may have been good for everyone else, but they really did erode the profits of the banks that had built up their franchises around offering services under the old rules. As Gross says about their latest self-serving whining, “The opposition to moving derivative trades to a clearinghouse isn’t about protecting customers. It’s about protecting the entrenched positions and profits of large banks.”

That’s all perfectly understandable, of course. The real puzzlement is why customers haven’t ganged up to complain about this more. Or, for that matter, aggressive small banks that think they could break into the derivatives market if it were more transparent. It’s pretty obvious why big banks don’t want to give up the massive profits of the OTC derivatives trade, but a little less clear why their opposition is so muted.

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SIX TRUTHS

Reclaiming power from those who abuse it often starts with telling the truth. And in "This Is How Authoritarians Get Defeated," MoJo's Monika Bauerlein unpacks six truths to remember during the homestretch of an election where democracy, truth, and decency are on the line.

Truth #1: The chaos is the point.

Truth #2: Team Reality is bigger than it seems.

Truth #3: Facebook owns this.

Truth #4: When we go to work, we're in the fight.

Truth #5: It's about minority rule.

Truth #6: The only thing that can save us is…us.

Please take a moment to see how all these truths add up, because what happens in the weeks and months ahead will reverberate for at least a generation and we better be prepared.

And if you think journalism like Mother Jones'—that calls it like it is, that will never acquiesce to power, that looks where others don't—can help guide us through this historic, high-stakes moment, and you're able to right now, please help us reach our $350,000 goal by October 31 with a donation today. It's all hands on deck for democracy.

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