April 25, 2010

(h/t David at Video Cafe)

Guests today on This Week with Jake Tapper included Sen. Bob Corker, Sen. Sherrod Brown and White House economic advisor Austan Gollsbee. Corker, at times a relatively reasonable Republican, talked about an amendment he will introduce for the financial reform bill that will financially penalize Wall St. executives if their firm fails. Is it sincere - or obstructionism? Goolsbee seems to think it's the latter:

CORKER: There is no question, and I think that first of all, I plan to offer changes to this resolution authority that say that, if a large entity like this has to go through this resolution where in essence they're liquidated in an orderly way, I think that everything that the executive team and the board members have earned through this company over the last five years needs to be clawed back.

In other words, there needs to be some penalties assessed to the management that have caused the country to have to go through this orderly liquidation process. So absolutely, I will be offering an amendment that deals with that, so that we're taking back, we're clawing back all the earnings that management has made out of this firm, if it has to go through orderly liquidation. I think that's very appropriate, and certainly I'm going to be doing that on the floor if it doesn't make it into the base bill.

TAPPER: Austan, can the White House get behind that clawback provision? Are you being out-populisted by Republicans?

GOOLSBEE: Well, look, in the bill now -- the president went to Cooper Union this last week to revisit the spot where more than two years ago, he went and said we need to have fundamental reform--

TAPPER: But there is no clawback in this bill?

GOOLSBEE: There is a requirement that they're all fired. If you get to that point, all the management is fired--

TAPPER: So they take their $500 million to their home in the Hamptons.

GOOLSBEE: -- all the shareholders are wiped out. Well, look, as I say, on any details, we're open to looking at negotiating the details of how we carry out the president's principles. But if negotiation -- and Senator Corker, to his credit, is not in this camp -- but if the negotiators are going to come forward more as a delaying tactic and we're just going to put in hundreds of amendments and try to keep this going so as to stall, delay and kill reform, that's not going to happen. This is going to pass.

Wall Street and global banking interests have shown a remarkable ability to shape regulation to their ultimate benefit. This bill won't really solve that problem.

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