From The Nader Letter
In late June, the Banking Committee of the U. S. House of Representatives adopted by anarrow 28 to 26 margin the most far reaching financial legislation since the New Deal.
Big news? Not in the eyes of much of the national media which, for the most part, left coverage to the wire services and specialized publications directed at narrow audiences in the financial community.
While declaring the Committee’s adoption of the 300-page bill the “most drastic reshaping of U. S. financial laws in 60 years,” the Washington Post brought the news to its readers in nine lines of small type in a roundup “digest” of miscellaneous business news.
It was also ho-hum in the newsroom of the New York Times. Instead of assigning a reporter from its sizeable Washington bureau, the Times left coverage of the Committee passage to a dispatch from the Reuters wire service. And even this short item was buried on the inside pages of its business section.
It is difficult to understand the news judgment that was employed to relegate the legislation to the “also ran” category.
The legislation affects how the widest array of banking, insurance and investment services will be delivered to millions of consumers. It has a major impact on neighborhoods that already face major hurdles in obtaining loan funds and insurance vital to economic survival.
By adopting ill-considered amendments to allow the mixing of banking and commerce over the objections of its Chairman, Jim Leach, the Committee opened the door to a drastic change in the nation’s economic system. As former Federal Reserve Board Chairman Paul Volcker warned the Committee, these provisions threaten to distort the flow of bank credit, dampen competition and concentrate economic and political power in a handful of gigantic bank/industrial conglomerates.
Even if these issues do not register on the scales of “all the news that’s fit to print,” there should be concern about the new risks that the legislation adds to the taxpayer-supported deposit insurance system.
But, then we must remember that the news media virtually ignored the passage of the Garn-St Germain bill and companion measures in state legislatures in the 1980s which expanded the investment powers of the savings and loan industry and opened the door to wild speculative lending. Not until the industry and the insurance funds lay in ruins did the national media give the American public any inkling of the legislative and regulatory excesses and misdeeds.
If the national media is dimming the lights on the pending legislation, the financial lobbyists are working overtime in an effort to push through the package before the public finds out what the price tag may be for consumers and the nation’s economic system.
It was a huge turnout of lobbyists from an array of financial trade associations and Washington corporate law firms who provided standing-room-only audiences packed into the main Committee hearing room and a special audio-equipped “overflow” room. Hallways were constantly abuzz with hurried conferences between lobbyists, Committee members, staff and, on occasion, Undersecretary of the Treasury John Hawke and Assistant Secretary Richard Carnell plus a full contingent of regulatory personnel guarding agency turfs.
[Note to the news media: Those thousand dollar suits were not well-heeled tourists from Dubuque learning how their government works.]
Financial legislation is invariably complex. The lobbyists like it that way and they do their best to keep the legislative dialogue in the code-like language of the industry.
The last thing these emisaries of special interests want is for the public to be on equal terms in following the legislation and understanding its impact on consumers and the economic future of the nation. In the eyes of the financial lobby, that’s best left to the insiders — in Congress and the industry. When the bill comes due, as it did in the savings and loan failures, then the public is expected to become a bailout partner.
The financial lobbyists are quite happy to see major newspapers like the Washington Post and the New York Times provide low key coverage of the deregulation legislation. Minimal press coverage certainly makes it less embarrassing for the industry’s friends on the Committee when they offer the lobbyists amendments and cast anti-consumer votes.
Darkness is usually the lobbyist’s best friend. The media is providing it in ample quantities.