A Thousand Cuts - by U.S. Rep. Barney Frank

A Thousand Cuts
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Barney Frank
OP-ED / July 30, 2011

In bits and pieces, conservatives attack Wall Street reforms.

SOME CAUSES are more easily sloganized than others. “Let’s Re-deregulate Derivatives’’ has a certain rhythm, but it doesn’t sell well politically. So the conservative ideologues who want to roll back the Wall Street Reform and Consumer Protection Act, and return to a time when there were fewer regulations to restrain the reckless behavior of the financial-services industry, avoid saying so directly. Instead, they engage in indirect assaults which, if successful, will recreate the conditions that led to the crisis and caused millions of Americans to lose their jobs or homes.

Conservative opponents of the law, with a majority of Americans against them - every poll shows that financial reform is broadly supported - hope that the public is too distracted by the showdown over the debt limit, a slow economic recovery, and two wars that it won’t notice the stealth attack on that law.

These opponents rely on collateral, but damaging, attacks to disguise their effort to undo the reform.

¦ Catch 22.

House Republicans have drastically reduced the funding needed by the Securities and Exchange Commission and the Commodity Futures Trading Commission to adopt rules to regulate derivatives - the financial instruments that made AIG a symbol of financial destruction and allow speculators to drive food and energy prices higher. They then say that because the rules have not been adopted it is impossible to create any rules at all.

¦ Defying the laws of physics. Opponents of financial reform argue that they must roll back regulation of American firms to put them on “a level playing field’’ with their foreign competitors. But European financial institutions also argue that they are the victims of a playing field which tilts in favor of American firms. These unlevel playing fields - if they exist - defy the laws of physics because everyone claims to be on the bottom.

¦ “I’m only doing this for your own good.’’ Those wishing to free large financial institutions of regulation argue that requiring banks to have sufficient capital will cause small businesses to suffer. Conservatives pretend to defend the little guy while they carry water for the big guys. They claim that an independent agency to protect consumers against predatory practices will actually hurt consumers by depriving them of products which - although they may appear harmful - will prove ultimately to be in their best interest.

¦ Throwing a temper tantrum. Senate Republicans, lacking the votes to roll back Wall Street reform, have blocked it by hijacking the constitutional provision that requires the Senate to advise and consent regarding nominations. They refuse to confirm anyone to run the Consumer Financial Protection Bureau unless the law is rewritten to substantially weaken it. Having lost the legislative battle over financial reform, they are throwing a temper tantrum in defiance of the Constitution. This is especially ironic for a political movement that claims that it is the most faithful defender of the constitutional spirit.

Those seeking to undermine the Wall Street Reform and Consumer Protection Act are in the difficult position of having to persuade the American people that our problem is not the reckless financial practices that led to the worst economic disaster in 80 years, but rather new rules designed to reduce the chance that it will happen again.

But they understand one important principle of debate - try to refrain from saying something that almost no one will believe. So they do not come right out and state that derivatives should be re-deregulated or that consumers need no protection. Instead, they are trying to induce mass amnesia while they try to recreate the conditions that led to the economic mess we are in today. But those of us who fought to adopt the law are determined to keep them from succeeding.
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U.S. Representative Barney Frank of Massachusetts is coauthor of the Wall Street Reform and Consumer Protection Act. 

The Fast Track to Change - by Renée Loth

Ela Bhatt The Fast Track to Change
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Renée Loth,
Boston Globe OP-ED / July 30, 2011
LAST MONTH the US Supreme Court ruled that more than 1 million female workers couldn’t proceed with a gender bias suit against Wal-Mart because they were too numerous and diverse to constitute a class. The justices ought to have a look at the Self Employed Women’s Association, a trade union of 1.3 million women in India working in “the informal economy.’’

The women certainly have a diverse array of jobs: they are cigarette-rollers, hawkers, weavers, fruit venders, rag-pickers, cart-pullers. Or they work at home cleaning oil tins for recycling or pulling gold threads from used saris. They have no bosses. They have no hours. And, before SEWA, they had no rights.

Ela Bhatt, the 77-year-old lawyer who founded SEWA in her native Ahmedadad in 1972, remembers the dismissive response when she tried to certify the union. “You are a rag-tag bunch,’’ she said authorities told her. How could she hope to organize women who were poor, illiterate, and had addresses like “the third shed from the municipal water tap’’? Some of the women didn’t even have last names.

Bhatt was in Cambridge recently to receive the Radcliffe Institute medal. In an interview, she said working with the kind of people society considers “marginal’’ can be a fast track to change. “Margins are fertile ground,’’ she said. “Edges are dynamic areas where there is room for growth.’’ It is on the fringes that change often begins, migrating eventually to the mainstream. The Tunisian fruit vendor whose suicide catalyzed the Arab Spring uprisings, she noted, was also member of the “marginal’’ economy.

Besides, she said, “in India the margins are wide.’’ She estimates that self-employed workers account for 62 percent of India’s GDP.

Bhatt recalled her youth as an idealistic law student, just a few years after India gained its independence. It was a heady time. Mahatma Gandhi’s example of nonviolent revolution was still fresh. “What pricked me always from the inside was injustice, she said. “I saw with my eyes the thousands of people working in economic activities where there were no employer-employee relationships. Why does the minimum wage not apply to them?’’

She became a lawyer for the Textile Labor Association, and convinced the union to accept a group of self-employed women cart-pullers who worked in the local cloth market. But it was an uneasy fit, and eventually SEWA became independent. “What is work? It defies categories,’’ she said. “The poor are of course workers, or they would not survive.’’

Today SEWA has chapters all over the vast Indian subcontinent and in South Africa, Pakistan, Nepal, and Afghanistan. It operates a cooperative bank, a housing trust, day care centers, and a training academy for its members. It provides health insurance, micro-credit, and legal representation. Annual dues are 5 rupees, about 11 cents. This seems ridiculously low until you realize that 270 million people in India earn less than a dollar a day.

One of the themes at a Radcliffe symposium accompanying Bhatt’s award was whether progress comes most readily through passing laws or changing culture. It is clear where Bhatt stands. “Laws come and go,’’ she said. “Culture is far stronger and deeper.’’

She said practices in developing societies such as wearing the burka, or even child marriage, need to be respected and changed slowly. She didn’t so much defend these traditions as try to as explain them. Still, SEWA has been criticized by some women’s rights advocates for not taking a stand on what we would call “the social issues.’’

For Bhatt, economic independence is the empowering requirement for social liberation. In prepared remarks she said that once a woman begins bringing in wages, the power dynamic shifts in the most traditional homes. “The husband that refused to let his wife go to her cooperative is now seen bringing her hot lunch to work.’’

From the potters to the incense-makers, the million-plus women SEWA organizes have these things in common: They are vulnerable to economic forces beyond their control. They are easily exploited by middlemen who take a profit from their labors. They are nearly powerless acting alone.

Come to think of it, that’s what the Wal-Mart women have in common, too.
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Renée Loth’s column appears regularly in the Globe.