Depending on which lobbyist or activist you talk to, the bill has been variously described as heavy-handed profit-killing government interference with efficiently functioning markets, a bound-to-fail toothless attempt to restrain Wall Street irresponsibility that has already been gutted, or the last best chance to actually bring sense and order to the wild and woolly world of derivatives. Barney Frank, meanwhile, is either the bought-and-sold tool of Wall Street or a marauding socialist, or to take him at his own word, not quite capable of understanding the complexity of his own bill.

What makes this particular bill -- H.R. 4173, Wall Street Reform and Consumer Protection Act of 2009 -- at this particular moment in time so interesting is that never before have we had so many eagle eyes watching every move legislators and lobbyists are making. We are watching the sausage get made, in real time. I don't think it is hyperbolic to say that the future health and prosperity of our democracy hinges on whether or not we can lever the Internet's hydra-headed watchdog abilities into an effective  force for change.

Here's the latest, in what looks to be a pretty important post by Rortybomb's Mike Konczal, published moments ago at The Baseline Scenario. The bottom line is that it appears that yet another attempt to render the legislation powerless is underway, just as the bill hurtles towards a vote.

I'm going to republish Konczal's post in full. It's complicated, it's wonky, and it's the kind of thing that for most of our lives  has rarely seen the light of day as the House and Senate go about their business. But we should all be talking about it, because the wider this news spreads, the more pressure there will be on mainstream media to follow up, and the better chance we will have of shaming the real tools of Wall Street:

Have lobbyists snuck another major loophole into the OTC Derivatives bill? This week the final touches are being put on Barney Frank's financial regulation bill -- H.R. 4173 -- "Wall Street Reform and Consumer Protection Act of 2009." One of the centerpieces of this reform is Title III: Over-the-Counter Derivatives Markets Act. And one of the goals of this reform would be to get as many derivatives as possible to trade on exchanges.

An initial hurdle for Barney Frank was what to do with an "end-user exemption." This would exempt certain types of derivative buyers who use derivatives, say corporations hedging interest rate risk without speculating, from the extra scrutiny and regulation that comes with the exchange/clearing system. One of the narratives of financial reform so far has been that this initial end-user exemption was too large a loophole at first, and instead of just handling 10-20 percent of the market, it would let a large majority of the market sneak through, but ultimately Barney Frank was convinced by consumer groups and people pushing for stronger financial regulation and fixed this issue. See Noah Scheiber here in "Could Wall Street Actually Lose in Congress?" for this story, and it shows up as well in a recent profile of Barney Frank in Newsweek.

I thought it was a little too early to declare victory, and sure enough instead of attacking and weakening how people will have to use the exchanges, lobbyists have re-focused their attack on the idea of the exchange itself. For a while, reformers have been worried about an "alternative swap execution facility." This would be a way of essentially allowing the current way things are done to be allowed to count as an exchange. Fighting off this loophole was a battle from a month ago, and it had appeared to be won. Now many are worried that this language appears to have snuck back into the final bill now.

Colin Peterson (D-MN), Chairman of the House Committee on Agriculture, along with Barney Frank, has added an amendment to the OTC Bill (opens large pdf). There are two relevant sentences for reformers from the long document. The first is on page 32:

(49) SWAP EXECUTION FACILITY. -- The term 'swap execution facility' means a person or entity that facilitates the execution or trading of swaps between two persons through any means of interstate commerce, but which is not a designated contract market, including any electronic trade execution or voice brokerage facility.

This replaces other language in the original bill (opens even larger pdf), on page 546:

SEC. 5h. SWAP EXECUTION FACILITIES.

(a) REGISTRATION.

(1) IN GENERAL.

(A) No person may operate a swap execution facility unless the facility is registered under this section.

(B) The term 'swap execution facility' means an entity that facilitates the execution of swaps between two persons through any means of interstate commerce but which is not a designated contract market.

So notice any differences? First the definition of a swap execution facility has been expanded to include "a person" (different from the "or entity"). It's also expanded to an "or trading" definition, and includes voice brokerage firms. So now we are moving from the definition of something that is a platform for swaps to be traded on to instead something that simply helps swaps get traded. This could, quite simply, be a telephone over which two people trade a derivative (with one person declaring himself to be the exchange?). Instead of changing the way business is done for reform it looks like it redefines reform as the way things are currently done, and just calls it a victory.

Now on page 89 of the amendment:

(2) RULES FOR TRADING THROUGH THE FACILITY.

Not later than 1 year after the date of the enactment of the Derivative Markets transparency and Accountability Act of 2009, the Commission shall adopt rules to allow a swap to be traded through the facilities of a designated contract market or a swap execution facility. Such rules shall permit an intermediary, acting as principal or agent, to enter into or execute a swap, notwithstanding section 2(k), if the swap is executed, reported, recorded, or confirmed in accordance with the rules of the designated contract market or swap execution facility.

The second sentence here allows an intermediary to execute a swap, ignoring the section 2(k) which is the meat of the reform, as long as the swap is recorded somewhere. Now we already have, from above, that a swap execution facility can be something other than the exchange. This is a rule that guts the regulation right out the door, and for no apparent benefit to reform. Many of these alternative swap facilities will be owned by the banks, so it won't necessarily force the price transparency that has been promised. To trust regulators to simply do the right thing is naive at best when the ability to follow fixed rules is available.

From what I'm hearing, it is possible Frank doesn't even know that this language, once in the bill as an amendment but removed, has snuck back into his reform legislation. Things are moving very quickly on the hill right now, and this is scheduled to be wrapped up by tomorrow. However this new language runs counter to the reforms Frank has promised to deliver to the American people. Either this language needs to be clarified before the bill is complete, or removed entirely.

If anything could make the scientists at the Climate Research Unit of East Anglia University feel worse than they already do about their irresponsible and dumb e-mailing, it would have to be handing the likes of Sarah Palin a bully pulpit from which to posture. But one has to snort at Palin's characterization of these scientists as "a highly politicized scientific circle." I'm as upset as anyone at the evidence of scientists attempting to avoid Freedom of Information Act requests, but let's not forget the larger context here. For decades climate researchers have been assaulted by political attacks funded by the energy industry and right-wing think tanks who care nothing at all about the science -- their sole goal has been to shield "free" markets from the consequences of their actions. If you or I faced this kind of daily barrage, we'd probably do stupid things too.

The heart of Sarah Palin's argument isn't really about the science.

But while we recognize the occurrence of these natural, cyclical environmental trends, we can't say with assurance that man's activities cause weather changes. We can say, however, that any potential benefits of proposed emissions reduction policies are far outweighed by their economic costs.

Carbon dioxide levels in the atmosphere are at their highest point in 15 million years. According to the World Meteorological Organization, the current decade is the warmest on record, and the current year is the fifth warmest ever -- observations that are supported by data collected by multiple climate research centers. Evidence of global warming comes from many reinforcing points -- melting polar ice, rising sea levels, changes in plant and animal ecology across the globe. Palin's assertion that we can't "say with assurance that man's activities cause weather changes" is far more highly politicized than anything that comes out of the Climate Research Unit. It is fundamentally anti-science.

Sarah Palin and James Inhofe and the Competitive Enterprise Institute and Exxon and all the rest can hold their breath and turn blue in the face and argue as long as they want that the hacked e-mails from East Anglia undermine and refute the work done by thousands of scientists across the world for decades. And in all likelihood, they and their allies will probably succeed in postponing and delaying any prudent action that might have a chance at ameliorating the effects of hotter temperatures in our lifetimes. The problem is hard. Coordinating the actions of governments across the globe on such a complex challenge is near impossible.

I don't think future generations will remember the Inhofes and Palins fondly, but the great thing about science is that it will continue marching on, whatever they do. If there was significant manipulation of data at the Climate Research Unit -- and the evidence of real smoking guns proving fraud is mighty thin -- hardworking scientists will correct it and move forward. That's how science works. That's how we've unlocked the mysteries of the atom and the human genome. That's how we've built computers and space ships and cancer drugs.

The great irony and tragedy of ClimateGate is that decades of anti-science pressure from special interests pushed some scientists over the edge and made them act in ways that are not very scientific. But whether or not that imbroglio scuppers an agreement at Copenhagen or prevents a climate change bill from passing during the current administration, we will continue to accumulate more data and understand better what is happening to our planet as time goes on. And Sarah Palin's malign and conscious stupidity will only grow more historically transcendent.

UPDATE: Mark Ambinder blasts away at Palin's Op-Ed in the Atlantic.

Ken Vogel has the definitive conservative-goldbug nexus story in Politico. But everyone who has investigated this issue seems to be missing a key point: Gold's popularity is a sign that apocalypse is being averted, not that it is nigh.

The standard theory is that buying gold is a hedge against a weak dollar. The dollar has been falling in value for months in part because investors fear that the inflationary consequences of all the liquidity that the Fed has pumped into the global economy to avert a second Great Depression. But take a closer look at that dynamic: the dollar is weakening not because there is any imminent sign of inflation now but because the fledgling steps towards economic recovery make people assume that eventually inflation will be inevitable. (And, as Matthew Yglesias points out, the dollar is only now back to where it was before the financial crisis began.)

Notice the contradiction? Economic recovery, not disaster, is fueling the gold-buying binge.

No clearer evidence of this could be asked for than the data offered by today's markets -- the dollar strengthened and gold fell, as investors worried that the downgrade of Greece's credit rating, along with disappointing industrial production numbers from Germany and more problems in Dubai, signaled that the global economy is still in peril.

When real danger threatens -- where do investors put their money? Back in the dollar.

I suppose some movie aficionados might quibble with the "classic" sobriquet. But they would be foolish to do so. The original "Red Dawn" provided a key early showcase for the talents of both Patrick Swayze and Charlie Sheen and perfectly captured the cartoon elements of Reagan-era Cold War posturing. And while some moviegoers at the time might have judged unrealistic the prospect of a handful of plucky Michigan teenagers -- the Wolverines! -- fighting the mighty Red Army to a standstill, there's no getting around the historical reality that within five years of "Red Dawn's" premiere, the Soviet Union had effectively collapsed. As many a rowdy bar patron would discover in the future, you just don't mess around with Patrick Swayze. He will take you and your totalitarian communist army down.

The new "Red Dawn 2010" stars Josh Peck as one the latter-day teens determined to resist the forces of collectivism. Peck is best known as the shlubby half of the Nickelodeon teen duo that starred in "The Adventures of Drake and Josh." Here's hoping that Josh has been working out lately, because as last seen on Nick, he was no Patrick Swayze. But maybe that's just part of Hollywood's fiendish plan to lull the Chinese into a sense of complacency before our cultural commissars destroy the People's Republic just as they did the USSR.

The best parts of "Red Dawn 2010" -- judging from the various trailers and YouTube videos leaking across the Net, are the socialist realist Chinese propaganda posters adorning the crumbling walls of Detroit slums. Judging by the poster slogans, -- "Repairing Your Economy," "Helping You Back On Your Feet," "Defeating Your Enemy" (complete with a sledgehammer busting up the Capitol building) the Chinese have chosen to invade while the U.S. is in the middle of deep economic trouble. And by depicting Washington as the problem, the Chinese are deftly attempting to rally both the populist TeaParty Right and the disenchanted progressive left to their cause. Real socialists to save us from the faux socialists!

Given that the the invasion is supposed to occur in 2010, the chances that the U.S. will remain mired in the economic doldrums, with the masses yearning for for delivery from our woes via foreign hands, could be high. So here's a little more pressure for the Obama administration. Fix our economic problems now, or the Chinese will arrive to fix them for us.

UPDATE: Grey Munford, Director of Corporate Publicity, Metro-Goldwyn-Mayer Studios Inc., responds:

Saw your post and just wanted to correct one thing about your synopsis. The 2010 version of Red Dawn begins when the Chinese and Russians attack a small northwestern town and a group of teenagers take the fight to the intruders in an attempt to disrupt the invasion and save their home.

Chinese and Russians! The plot thickens.