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Posts tagged with 'regulation'

Weekly Audit: Can Elizabeth Warren Save the Economy?

Posted Sep 21, 2010 @ 10:51 am by
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by Zach Carter, Media Consortium blogger

Flickr, david_shankbone, Creative CommonsPresident Barack Obama’s decision to appoint Elizabeth Warren to set up the new Consumer Financial Protection Bureau (CFPB) couldn’t have come at a more critical time.

Over 44 million Americans were living in poverty last year. That’s the highest number on record. The Great Recession is taking a terrible toll on everyone outside the executive class, but policymakers have been reluctant to pursue an economic agenda that improves the lives of ordinary Americans.

The uniqueness of Warren’s new post raises plenty of questions, but it puts a fierce defender of the middle class in office at a time when the middle class most needs help.

So what exactly will Elizabeth Warren do?

As Annie Lowrey emphasizes for The Washington Independent, it’s not entirely clear what Warren’s new job will be or how long she will have it. (more…)

Weekly Mulch: BP Spill Plugged, But What About Michigan?

Posted Aug 6, 2010 @ 10:42 am by
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by Sarah Laskow, Media Consortium Blogger

Image courtesy of Flickr user mic stolz, via Creative Commons LicenseBP is on the verge of escaping headlines, and if you’re ready to forget about the oil spill, fine. But disasters just like the Gulf spill are playing out across the country.

Yesterday, BP cemented the well that has been spewing oil into the Gulf of Mexico shut. The Obama administration is saying that the majority of the oil released is no longer a problem. The spill was supposed to drive the Senate to finally pass a bill touching on energy issues and taking the oil industry to task, but this week Senate Majority Leader Harry Reid (D-NV) pushed back work on his minimalist energy bill until the fall.

But in states like Michigan and New York, similar stories are developing on smaller scales. For-profit companies, unburdened by strong regulations, are taking what they want, regardless of the consequences for the environment or for communities that depend on having clean soil, air, and water. (more…)

Weekly Audit: Deficit Reduction = Selling Out to Wall Street

Posted Jun 8, 2010 @ 10:35 am by
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by Zach Carter, Media Consortium blogger

 

Image courtesy of Flickr user epicharmus, via Creative Commons LicenseIn the fall of 2008, decades of finance-first, bankers-know-best economic policies coalesced to create one of the worst economic crises in history, one that the banks themselves could not survive without staggering levels of government support.

 

Yet astonishingly, nearly two years after the crash, Wall Street is still setting the economic agenda in Washington. As Congress begins to examine broader economic policy, lawmakers are under heavy Wall Street pressure to reduce the federal budget deficit—even though that could mean deepening the jobs crisis without any substantive economic benefits. (more…)

Weekly Mulch: Slick of Oil Industry Cash Gummed up Regulatory Works

Posted May 7, 2010 @ 10:52 am by
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by Sarah Laskow, Media Consortium blogger

The Deepwater Horizon oil spill  in the Gulf of Mexico is worse than anyone thought, and the crisis will likely go on for months. British Petroleum (BP) is tripping over itself to say it’ll cover the costs of the clean-up, yet before the spill, the company spent its time and money pushing back against government regulation and safety measures.

Care2 reports, “A piece of machinery costing .004% of BP’s 2009 profits might have prevented the Gulf of Mexico oil spill that is currently threatening the U.S. gulf coast. An acoustic valve designed as a final failsafe to prevent oil spills costs $500,000; the Wall Street Journal writes that the valve, while not proven effective, is required on oil rigs in Norway and Brazil, but not in the U.S.”

Oil is drifting towards the southeastern coastline as clean-up crews and politicians scramble to respond. BP has not staunched the leaks that are pouring more than 200,000 gallons of oil into the Gulf of Mexico each day.

Beach communities in Louisiana, Mississippi, Alabama and Florida are bracing for the oil’s arrival and waiting to see what the damage to their businesses and their natural resources will be. And in Washington, members of Congress, who just a couple of weeks ago were willing to compromise on off-shore drilling expansion are rallying against the practice.

As Sen. Joe Lieberman (I-CT) said this week, “accidents happen,” but in this case, it’s becoming clear that the oil industry and government regulators did not do all they could to minimize the risks of a spill.

The slick

Over the past week, reporters trying to describe the size of the spill have compared it to Jamaica or Puerto Rico. Public News Service talked to Steve Bousquet, Tallahassee bureau chief for the St. Petersburg Times, who saw the slick in flight.

“It’s really a horrifying thing to see because of the magnitude of it,” Bousquet said. “They use these chemicals to break up the oil and it takes on a kind of rust-colored look to it. And we saw these long streaks, miles and miles long of oil, and just oil as far as the eye can see.”

The visual stretch of the spill hardly represents the scope of its impact, either. As Dr. Riki Ott, a Chelsea Green author, explained to CNN:

“This is Louisiana sweet crude, and it’s got a lot of what’s called “light ends,” which evaporate very quickly into the air and also dissolve very readily into the water column. So what you see on the surface is like the tip of the iceberg…Imagine a big cumulus cloud of dissolved and dispersed oil under the slick, wherever it is. And that cloud is extremely toxic to everything in the water column — shellfish, eggs and embryos — so shrimp eggs and young life forms that are in the water column, young fish.”

According to Dr. Ott, the extent of the damage won’t be clear for a few years. Oyster fisherman, for instance, would usually be seeding oysters now, as the crops take two years to mature. That work needs to be done within the next few months to avoid economic losses two years in the future, but the precautionary measures shutting off access to waters east of the Mississippi are keeping that from happening.

Oiling the machine

It’s no accident that oil interests work under looser rules. As Lindsay Beyerstein reported last week for Working In These Times, BP wrote to the U.S. Minerals Management Service (MMS) saying that tighter regulation of the oil industry was unnecessary. MMS doesn’t have a stellar history of oversight, and if you’re not familiar with its sordid past, TPM’s Justin Elliott put together a tour through the agency’s history with sex and drugs.

The industry hasn’t just been selling snake oil to MMS, though. Oil companies have been greasing the palms of politicians with campaign donations for years. Democracy Now! spoke to Antonia Juhasz, author of The Tyranny of Oil, about the oil industry’s influence.

“The entire oil industry, will continue to use its vast wealth – unequaled by any global industry – to escape regulation, restriction, oversight and enforcement,” Juhasz says. “BP, now the source of the last two great deadly US oil industry explosions, has shown us that this simply cannot be permitted.”

The new politics of climate

To see the oil industry’s influence in action, look no further than the ongoing work on the Senate’s climate legislation. Two weeks ago, before the spill, Sen. John Kerry (D-MA) announced that the oil industry would back the tri-partisan legislation that he was working on with Sen. Lieberman and Sen. Lindsey Graham (R-SC). Since then, Graham has stepped away from the bill, and off-shore drilling, a keystone of the negotiations over the legislation, has become much less politically palatable.

But this Wednesday, Kerry had nothing but nice things to say about the oil industry, as Kate Sheppard reports at Mother Jones.

“While he acknowledged that “we can’t drill and burn our way out of danger,” Kerry also spoke highly of the oil companies backing the draft legislation, which was supposed to be released last week,” Sheppard writes. “BP, operator of the rig currently spewing hundreds of thousands of gallons of oil into the Gulf of Mexico, was expected to be among the supporters.”

“Ironically we’ve been working very closely with some of these oil companies in the last months,” Kerry said. “I took them in good faith. They have worked hard with us to find a solution that meets all of our needs.”

Kerry still seems confident that the climate and energy bill will move forward, but, Steve Benen writes at the Washington Monthly, that’s things are far from certain.

“The legislation was predicated on something of a grand bargain — the left would get cap-and-trade and investment in renewables; the right would get nuclear plants and offshore drilling,” Benen explains. “But in the wake of the catastrophe in the Gulf, there is no deal. Key Dems now insist drilling be taken off the table, while Republicans and Democratic industry allies (Louisiana’s Mary Landrieu, for example) now insist they won’t even consider a bill unless it includes plenty of drilling.”

While the White House is saying that the oil spill may spur interest in and support for clean energy legislation from Congress, that hasn’t happened yet. Congressional leaders might have to wait for the noise from the Hill to die down before they can re-start serious discussions about how to pass a climate bill.

This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Mulch: Oil Rig Sinks, as Does Senate Climate Bill

Posted Apr 30, 2010 @ 9:58 am by
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by Sarah Laskow, Media Consortium blogger

Image courtesy of Flickr user NASA Goddard Photo and Video, via Creative Commons LicenseTwo disasters flared up this week, one environmental, the other political. Off the coast of Louisiana, oil from a sunken rig is leaking as much as five times faster than scientists originally judged, and the spill reportedly reached land last night. And in Washington, Sen. Lindsey Graham (R-SC) jumped from his partnership with Sens. John Kerry (D-MA) and Joe Lieberman (I-CT) just before the scheduled release of the draft of a new Senate climate bill.

The trio had worked for months on bipartisan legislation on climate change. After Graham’s defection, his partners promised to press on, but the bill’s chances of survival are dimmer.

The next Exxon Valdez?

As Grist puts it, the spill off the Louisiana coast is “worse than expected, and getting worser.” The oil rig sank on April 20, and since then, oil has been pouring out of the well and into the Gulf of Mexico. (more…)

Weekly Mulch: Cochabamba Summit Offers New Approach to Combating Climate Change

Posted Apr 16, 2010 @ 11:46 am by
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By Sarah Laskow, Media Consortium blogger

Image courtesy of Flickr user swperman under Creative Commons LicenseOn Monday, climate activists, nonprofit leaders, and governmental officials will gather in Cochabamba, Bolivia, to look for new ideas to address climate change. The World People’s Conference on Climate Change and the Rights of Mother Earth, organized by leading social organizations like 350.0rg, “will advocate the right to “live well,” as opposed to the economic principle of uninterrupted growth,” as Inter Press Service explains.  In the absence of real leadership from the world’s governments, the conferees at Cochabamba are looking for solutions “committed to the rights of people and environment.”

The United States certainly isn’t stepping up. Sen. John Kerry (D-MA), along with Sen. Joe Lieberman (I-CT) and Sen. Lindsay Graham (R-SC), were supposed to release their climate legislation next week, just in time for Earth Day. But yesterday the word came down that the release was being pushed back by another week, to April 26. (more…)

Weekly Audit: Congress Must Get Tough On Wall Street

Posted Apr 13, 2010 @ 9:49 am by
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by Zach Carter, Media Consortium blogger

Congress returns from its April recess this week with financial reform at the top of its to-do list. With millions of Americans still bearing the brunt of the worst recession in 80 years, Congress needs to start protecting our economy from Wall Street excess, and repair the shredded social safety net that has allowed the Great Recession to exact a devastating human cost.

Big banks are an economic parasite

In an excellent multi-part interview with Paul Jay of The Real News, former bank regulator William Black explains how the financial industry has transformed itself into an economic parasite. Black explains that banks are supposed to serve as a sort of economic catalyst—financing productive businesses and fueling economic growth. This was largely how banks operated for several decades after the Great Depression, because regulations had ensured that banks had incentives to do useful things, and barred them from taking crazy risks.

The deregulatory movement of the past thirty years destroyed those incentives, allowing banks to book big profits by essentially devouring other parts of the economy. Instead of fueling productive growth, banks were actively assaulting the broader economy for profit. None of that subprime lending served any economic purpose. Neither do the absurd credit card fees banks charge, or the deceptive overdraft fees they continue to implement.

(more…)

Weekly Mulch: Murkowski Vs. the EPA

Posted Jan 22, 2010 @ 11:54 am by
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By Sarah Laskow, Media Consortium Blogger

On Thursday afternoon, Sen. Lisa Murkowski (R-AK) pulled out a rarely-used Congressional tool in an attempt to keep the Environmental Protection Agency (EPA) from regulating carbon and other greenhouse gasses. Sen. Murkowski offered a “resolution of disapproval” of the EPA’s impending action, which would limit companies’ carbon emissions.

The resolution would overturn the EPA’s finding that carbon dioxide is harmful to the public health. Three Democrats—Sen. Ben Nelson (D-NE), Sen. Blanche Lincoln (D-AR), and Sen. Mary Landrieu (D-LA)—joined Sen. Murkowski and 35 Republicans in sponsoring the resolution.

“Ms. Murkowski’s Mischief‘”

“This command and control approach is our worst option for reducing the gasses associated with climate change,” said Sen. Murkowski on the floor of the Senate yesterday. She called the EPA’s actions “backdoor climate regulations with no input from Congress” and said they would damage the country’s flailing economy.

The EPA first announced in April 2009 that carbon dioxide and other greenhouse gasses posed a threat to the public health. The agency formalized that finding last month, giving itself the power to regulate emissions of greenhouse gasses under the Clean Air Act. In March 2010, for instance, the agency is expected to announce carbon emissions rules for the auto industry that would match California’s higher standards. Sen. Murkowski’s resolution would derail that process.

Sen. Murkowski argued that she wants to give Congress room to come up with a legislative solution to climate change, but her critics see a more dangerous tilt to her resolution. “It’s a radical attempt by the legislative branch to interfere with executive branch scientists,” writes David Roberts at Grist.

Responding to “Ms. Murskowski’s mischief” on the Senate floor yesterday, Sen. Barbara Boxer (D-CA) called the resolution an “unprecedented effort to overturn scientific decision” and “a direct assault on the health of the American people.”

Resolution of disapproval

What is a “resolution of disapproval?” Grist’s Roberts called it “the nuclear option.”

“It would rescind the EPA’s endangerment finding entirely and thereby eliminate its authority over both mobile and stationary sources,” Roberts explains. “Furthermore, the administration would be prohibited from passing a regulation “substantially the same” as the one overruled, so the constraint on the EPA would effectively be permanent.”

This type of resolution was created by the Clinton-era Congressional Reform Act. The resolution has one big advantage: It cannot be filibustered. Passage requires only a majority in both houses of Congress. Members have tried using it in the past to delay the Dubai Ports World deal, derail FCC regulations on new media, and stop the flow of bailout funds.

Kate Sheppard at Mother Jones has been following Sen. Murkowski’s actions closely. She reports that “Senate supporters of climate action say Murkowski could obtain the votes of moderate Democrats from coal, oil, and manufacturing states. However, a resolution would still need to be approved by the House and signed by the president—both long shots, to put it mildly. ‘I think we’re a little worried about [Murkowski’s resolution] winning. I’m not sure we’re worried about it becoming law,’ a Senate Democratic staffer says.”

But Grist’s Roberts argues that passage in the Senate alone would be a problem. “Even if blocked by the House or vetoed by the president, such a public, bipartisan slap at the administration would be highly embarrassing and demoralizing,” Roberts writes. “It would mean at least ten conservative Democrats washing their hands of the administration’s initiative.”

Climate change and Congress

Sen. Murkowski insists that she’s still ready to work with her colleagues on climate change and that it’s better to approach the problem of climate change via legislation, not regulation.

But no one in Washington believes that climate change legislation is going to pass—even come to the Senate floor—any time soon. The issue was already in line behind health care, and the election of Republican candidate Scott Brown to Sen. Ted Kennedy’s Massachusetts seat this week means that none of the bills that the Senate is working on are likely to come to a vote this year.

“There was hope that the [climate] bill would come to the floor in the spring,” writes Steve Benen at Washington Monthly. “Regrettably, a narrow majority of Massachusetts voters have made it significantly more likely that Congress won’t address the problem at all. Proponents focused on solutions have vowed to “persist,” but Massachusetts has made a difficult situation considerably worse.”

The role of special interests

Sen. Murkowski has come under criticism for allowing Bush-era EPA administrators, now lobbyists representing clients on climate change issues, to help her craft an earlier amendment cracking down on the EPA. Yesterday, she said that those criticisms are “categorically false.”

But as JP Leous reports at Care2, Sen. Murkowski does receive substantial backing from energy industries that oppose climate change legislation and regulation.

“According to OpenSecrets.org Sen. Murkowski has received hundreds of thousands of dollars from polluting companies, and some of her biggest campaign contributors in recent years include firms with fossil-fueled motives like Exxon Mobil Corp,” Leous writes “Add those dots into the mix and a different picture emerges — and it starts to look like a person who is poised to introduce legislation next week attacking the Clean Air Act.”

On the Senate floor yesterday, Sen. Boxer charged, “Why would the Senate get in the business of repealing science? Because that’s what the special interests want to have happen now. Because they’re desperate.”

The Democratic Senators who co-sponsored the resolution also come from energy producing states where companies object to the new EPA regulations.

If at first you don’t succeed…

If Sen. Murkowski’s resolution does pass the Senate, there’s little chance it will pass the House as well. But this isn’t the only option that regulation opponents are looking at to fight the EPA. The Chamber of Commerce and other groups are planning to challenge the regulatory action in court, as Mother Jones’ Sheppard reports.

Last week, these opponents met to discuss their strategy. What’s interesting, Sheppard says, is that “the group was apparently divided on the best course of action. The Hill observes that “two camps have emerged.” One wants to challenge whatever rules the EPA issues, while another wants to question the science of global warming itself.”

We’re back to that old saw? With legislation off the table, the fight over climate change, for now, is in the regulatory arena.

This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Mulch: EPA, Clean Air Act Facing Opposition

Posted Jan 15, 2010 @ 12:00 pm by
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By Sarah Laskow, Media Consortium Blogger

Climate change legislation is off the table for now, but the Environmental Protection Agency (EPA) is still working to regulate greenhouse gasses. The organization is up against strong opposition from Republicans and some Democrats. Sen. Lisa Murkowski (R-AK) is heading the charge, with the assistance of Bush-era EPA officials, now lobbyists with clients in the energy industry.

The EPA and the Clean Air Act

In April 2009, the EPA found that carbon dioxide and five other greenhouse gasses pose a hazard to public health. This finding obligated the EPA to regulate these pollutants under the Clean Air Act, a responsibility the Bush administration fought to avoid. The power the agency now has to limit carbon emissions extends far beyond its usual scope, and the EPA’s decisions will have a lasting impact on environmental regulation in this country. As the agency moves to act, everyone from Sen. Murkowski to the state of California is protesting the changes. Kate Sheppard of Mother Jones reports:

“The California Energy Commission last month sent a letter to the EPA asking it to slow down on implementation of regulations on greenhouse gas emissions….The CEC argues that phasing them in too fast could hurt efforts in the state to expand use of low-carbon energy.”

Opponents in Congress are taking action to shut down the EPA’s attempts to curb greenhouse gasses, Sheppard writes. Both Sen. Murkowski and Rep. Earl Pomeroy (D-ND) have filed bills that would delay or stop the EPA’s regulatory process.

Attempting to ‘gut the Clean Air Act’

Grist’s Miles Grant is also keeping a close watch on opponents of the regulation.

“At first it seemed like simply one bad idea from Sen. Lisa Murkowski,” he writes. “But now we know the real story—a tangled web of public officials, polluter lobbyists, and efforts to gut the Clean Air Act.”

It emerged this week that Murkowski had help in drafting her bill from EPA administrators from the Bush administration, as first reported by the Washington Post. These former officials now work in Washington as lobbyists and represent clients like Duke Energy and the Alliance of Food Associations on climate change matters.

“Every day it seems we’re learning more,” says Miles. “More about the revolving door between the Bush administration and polluter lobbyists; more about their influence with senators and their staffers; and more about who’s really pulling the strings on efforts to block climate action—Big Oil’s MVP, Sen. James Inhofe (R-OK).”

Even the American Farm Bureau Federation…

Another opponent, as Care2 notes, is the American Farm Bureau Federation (AFBF), the country’s largest farm group. The organization approved a special resolution during its four-day convention on Sunday. The resolution supports legislation like Murkowski’s or Pomeroy’s that would “suspend the EPA’s authority to regulator greenhouse gases under the Clean Air Act.”

During a speech, AFBF president Bob Stallman said that American farmers and ranchers “must aggressively respond to extremists” and “misguided, activist-driven regulation.”

“The days of their elitist power grabs are over,” he said.

More opportunities to improve climate policy

The EPA’s new power is not the only opportunity that the Obama administration has to improve U.S. climate policy. David Roberts, also reporting for Grist, writes about $2.3 billion in new tax credits for clean energy manufacturing companies, announced last Friday.

“There were 183 projects selected out of some 500 applications; one-third were from small businesses; around 30% are expected to be completed this year. The winners are spread across 43 states,” Roberts reports.

Roberts calls it “better than usual industrial policy.” The credits are meant to give a boost to the new green energy economy.

But Roberts warns, “It’s also absurd that clean energy industries still depend on capricious, short-term extensions of tax credits. … Obama has called on Congress to cough up $5 billion a year for these credits, but how enduring will yearly appropriations be the next time Congress changes hands?”

Iowa and the biodiesel tax credit

The answer likely depends on how much support these projects get from the representatives of states that will benefit from the tax credits. In Iowa, for instance, the state’s three Democratic Representatives have asked the House leadership to prioritized a 2010 renewal of the biodiesel tax credit, as Lynda Waddington reports for the Iowa Independent.

“If members of the U.S. Senate do not act on last year’s program extension, however, it might be a moot point,” Waddington writes. The renewal has gotten stalled in the Senate, where both Iowa Senators are blaming the opposite party for delays.

From policy to people

When politicians jockey over regulations and renewals, climate change work in Washington can seem very abstract. But people like John Henrikson, a forester who’s committed to farming 150 acres of trees in sustainable ways, help ground lofty policy ideas down in reality.

“Henrikson’s approach embodies a new way of thinking about our relationship with forests. For years he has been processing his own trees into trim and molding, sold through a broad network of local businesses,” reports Ian Hanna for Yes! Magazine. “Five years ago he got his forest certified to Forest Stewardship Council (FSC) standards, a global system for eco-labeling sustainably managed forests and the products derived from them. And, most recently, he’s developed a project to sell rights to the carbon sequestered on his property.”

Without strong policy coming out Washington, it’s harder for entrepreneurs like Henrikson to make green business a reality. If legislators like Sen. Murkowski and groups like the AFBF don’t block them, the EPA’s new rules are going to begin coming out in March. There’s a major action to combat global warming that the U.S. can take before then, though—for example, we could officially commit to our promise to reduce emissions 17% from 2005 levels by 2020. The deadline for registering climate pledges under the new Copenhagen Accord is the end of this month.

This post features links to the best independent, progressive reporting about the environment by members of The Media Consortium. It is free to reprint. Visit the Mulch for a complete list of articles on environmental issues, or follow us on Twitter. And for the best progressive reporting on critical economy, health care and immigration issues, check out The Audit, The Pulse, and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.

Weekly Audit: House Bank Bill Fatally Flawed

Posted Dec 15, 2009 @ 8:44 am by
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By Zach Carter, Media Consortium Blogger

Last week, the House of Representatives finally approved a financial regulatory overhaul and President Barack Obama announced a new initiative to address the unemployment crisis. Both are a step in the right direction, but neither offer effective solutions to problems that still plague the U.S. economy.

The House bill doesn’t do away with too-big-to-fail banks and that’s a big problem. As John Nichols explains for The Nation, “the big banks aren’t going to get sidelined—let alone broken up—anytime soon.” Instead of splitting large, risky banks into smaller firms that could fail without wreaking economic havoc, the House bill gives regulators more power, including the ability to bail out a faltering bank with billions of taxpayer dollars. When push comes to shove, regulators are not going to risk letting a major bank fail. They’ll just bail the company out. We all saw what happened when Lehman Brothers collapsed last year.

By imposing a tougher set of rules on banks, it’s conceivable that regulators could prevent some future failures. But as Mary Kane notes for The Washington Independent, Congress carved so many loopholes in the new laws that banks will have little trouble skirting them.

Obama had hoped to create a new Consumer Financial Protection Agency (CFPA) to crack down on predatory lending, but a coalition of bank-friendly Democrats pushed through amendments that significantly weaken it. Obama wanted states to have the power to enforce stronger rules on predatory lending. Under a loophole that Rep. Melissa Bean (D-IL) pressed into the House bill, states are prevented from writing or enforcing rules that limit interest rates charged by credit card companies and payday lenders. That’s a really destructive move, Kane notes, since it was state regulators, not federal regulators, who cracked down on abusive lending over the past decade.

Obama also hoped to require that risky derivatives transactions would be conducted via exchange like ordinary stock trades. Derivatives are the type of trades that brought down AIG. But the House bill exempts a huge portion of transactions from this requirement and changes the definition of “exchange” to include private, unregulated derivatives trades, as Nick Baumann explains for Mother Jones. This is a fatal flaw in the regulatory overhaul. Derivatives are the primary technique that banks use to make themselves too-big-to-fail. Over 95% of the $290 trillion derivatives market is housed at just five banks. These derivatives tie the bank to other financial firms in a complicated web of risk that is impossible for regulators to navigate. If one of those five banks goes down, there’s no way a regulator can predict the consequences.

The only hope for meaningful reform right now rests in the Senate, which is considering a much tougher bill than what the House approved. But the Senate has yet to even conduct mark-up hearings on its legislation and the pressure from the banking lobby is going to be enormous. Progressives have to keep pushing for a better bill if we want to protect our economy from the abuses that brought on the current recession.

And while huge federal bailouts for banking giants like Citigroup and Bank of America have helped the financial sector recover, the broader economy is battling the highest unemployment levels since the early Reagan era. Things are poised to get a lot worse. As Daniela Perdomo emphasizes for AlterNet, a full 3.2 million workers will lose their unemployment benefits by the end of March 2010. Even if the unemployment rate stays where it is—and Perdomo notes that a vast majority of experts think its going to go higher—the impact on ordinary people is going to be even more severe than today’s nightmare.

In a blog post for Working In These Times, Roger Bybee highlights a piece by Harvard University Law School Professor Elizabeth Warren, who emphasizes the hardships faced by ordinary families. The statistics are grim—one-eighth of Americans are on food stamps, one-eighth cannot pay their mortgages and 120,000 families are filing for bankruptcy every month.

We need to take serious steps to get people back to work. Mass unemployment means that consumers don’t spend money, which means that companies don’t sell as much, which makes companies lay off more workers to cut costs. It’s a self-reinforcing cycle. The market can’t fix unemployment without help.

So Obama’s Dec. 8 speech announcing a new job-creation plan was a welcome event. But the concrete aspects of Obama’s plan are not effective. All the tax cuts in the world won’t necessarily put people back to work. Obama did endorse a public jobs plan which involved the government hiring people to improve the nation’s infrastructure and clean up communities ravaged by the economic crisis, but he shied away from any specific numbers.

As David Roberts explains for Grist, Obama’s willingness to sign off on a $23 billion program for environmentally friendly home renovations is a step in the right direction. The plan is being referred to as “cash-for-caulkers” and is modeled on the very successful cash-for-clunkers program. The government will pay people to increase the energy efficiency of their homes, helping people cut down on utility bills and increasing the demand for construction labor and products like new windows and doors. It’s a good idea. But if all we get are tax cuts and $23 billion for greener homes, the jobs bill is not going to assuage the unemployment crisis.

There is no reason to be concerned about the cost of a thorough jobs program. Taxpayers committed trillions of dollars to help the financial sector weather the economic storm. Anybody who is worked up about the prospect of spending money on jobs should read Amitabh Pal‘s piece for The Progressive. A modest tax on speculative trades of stock and derivatives could easily raise $150 billion a year to finance a robust jobs program.

At this point in the economic downturn, the government needs to take much stronger steps to rein in Wall Street and create jobs. We know what needs to be done to protect the economy from risky banking and we can afford to fix the unemployment crisis. All we need is the political will.

This post features links to the best independent, progressive reporting about the economy by members of The Media Consortium. It is free to reprint. Visit the Audit for a complete list of articles on economic issues, or follow us on Twitter. And for the best progressive reporting on critical economy, environment, health care and immigration issues, check out The Mulch, The Pulse and The Diaspora. This is a project of The Media Consortium, a network of leading independent media outlets.