Senate Finance Debate Developments

We have the good:

• The Senate defeated Richard Shelby's amendment to gut consumer protection.
• The CFTC gets more authority on derivatives.

The bad:

• The Senate defeated Sharrod Brown's amendment to force the big banks to shrink.

And the confusing:

• The Audit the Fed amendment appears to be on track to pass, though Bernie Sanders has agreed to narrow its scope, getting Chris Dodd as a cosponsor:

The audit sought by Mr. Sanders would scrutinize an alphabet soup of programs that injected liquidity into the markets, ranging from commercial paper to money market funds. Under the proposal, the accountability office will not question whether the loans should have been made but will focus on operational integrity and accounting practices.

The audit, however, would explore “whether the credit facility inappropriately favors one or more specific participants over other institutions eligible to utilize the facility” and “whether there were conflicts of interest with respect to the manner in which such facility was established or operated.”

It appears that Obama/Geithner/Summers still oppose the audit provision, and are implying that they might consider such a provision worthy of a veto.

As I've said before, Summers wants to be Fed chair, so he hates it, Geithner is afraid of being forced to resign in disgrace or of criminal prosecution, and they have Obama's ear,^* so we continue to here noise from the White House in support of opacity as policy.

^*But remember, the Cossacks work for the Czar.