Sen. Scott Brown: Wall Street, Main Street … or State Street?

Wow, real man-of-the-people we elected here.

Senate staffers tonight are hammering out the shape of the so-called Volcker rule, which would limit insured financial firms' ability to take speculative bets with their capital, or prohibit it altogether.

Brown for weeks has been seeking a carveout in the legislation–originally authored by Sens. Carl Levin (D-MI) and Jeff Merkley (D-OR)–that would allow banks to invest a portion of their profits in hedge and private equity funds.

…  [Brown said:] “Obviously it's important…for Massachusetts businesses, and businesses throughout the country to continue to operate as they have [for] many many years.”

Operating as they have … wait … since 2000, the end of Glass-Steagall? isn't that what got us into this mess?

Sen. Brown seems to have some rather parochial interests in mind, but it's not guys from Wrentham who drive trucks: It's State Street Bank.

The bank has a powerful advocate: Sen. Scott Brown (R-Mass.), whose vote the Democrats need to pass the financial overhaul bill. Brown is worried that a key provision in the regulations known as the “Volcker rule” would hurt State Street, BNY Mellon and other banks with major operations in his state. Even though Democrats have fought to include a strong version of the rule, which could restrict the kinds of trading banks engage in, Obama administration officials and Democratic aides on Capitol Hill say Brown is likely to get his way because his vote is critical for approval of the House-Senate draft.

… unless Feingold comes back into the fold.

Anyway, this is the problem with parochial politics: Probably lot of states have some banks that have done some big-casino stuff out the back door with our money. But if they're all playing under the same rules, no big deal. Brown's just trying to get special treatment for ours.

'Casino' banks targeted in Volcker rule from Marketplace on Vimeo.

Again, this is how we got into this mess to begin with. A safer, more secure, transparent and trustworthy system has broad-based benefit. There's no economic lubricant like trust. Make the laws clean, and economic activity will kick up again.

Update: In the comments, HesterPrynne notices the irony … 

So if Massachusetts businesses would be hurt…

it's important for Senator Brown to protect them.  

But if Massachusetts workers would be hurt, then “our country's economic stability requires that we get our fiscal house in order” and it's important for Senator Brown not to protect them.  

Let's remember that Sen. Brown is filibustering an extension of unemployment benefits.