More legislative sausage-making, at its finest. In the Wall Street Journal, Damien Palleta reports that the monster banking regulatory bill currently moving through the House exempts particular corporations from compliance with key provisions.
General Electric and Pitney Bowes, for example, receive get-out-of-regulation-free cards and will not be required to spin off their banking divisions to avoid supervision by the Fed.
The administration wanted any company owning a financial arm to be regulated the same way. That means GE would either have to be regulated by the Fed, or spin off its finance arm.
GE and Pitney Bowes won protections during a unanimous panel vote last month pushed by their home-state congressman, Rep. Jim Himes (D., Conn.).
Mr. Himes, who spent 12 years as an executive at Goldman Sachs Group Inc., said he pushed his amendment because he thought the original legislation was "overly broad" and threatened to drain key lending capacity from the economy at the worst possible time. He said he also had "an obligation to keep an eye on [issues] that would impact the operations" of major local employers."
Is it my imagination, or does the attribution "spent 12 years as an executive at Goldman Sachs" now carry with it the stain of the scarlet letter? Nothing more need be said.
I will return to this theme later today when I tackle Matt Taibbi's Rolling Stone assault on President Barack Obama but let's note here for the record that this is yet another case of the White House proposing a sensible piece of regulatory reform -- anything that quacks like a financial services banking duck should be regulated like a financial services banking duck -- that has been watered down by Congress.