With financial reform now  newly passed, politicians who supported it go into overdrive to exaggerate its likely effects. Their cultivated enthusiasms culminate in the same promises made by every president and congressperson after similar reforms were enacted in the wake of earlier capitalist crises. “This reform,” they all insist, “will prevent crises in the future.” That promise has been broken every time as today’s global capitalist crisis proves yet again.
Reforms and regulations fail for one basic reason. The corporations whose behaviors contributed to the crisis emerge from these reforms and regulations with their basic structures in tact. They remain organized such that the mass of workers come to work, Monday through Friday, produce whatever their employer then sells, and then go home. The corporation’s Board of Directors continues to make all the key decisions: what, where, and how to produce and how to dispose of the enterprise’s profits. In making those decisions, the Board (15-20 individuals) is responsible and accountable chiefly to the major shareholders who elect them (usually another 15-20 individuals). Their job is to make money for the corporation. For them, reforms and regulations are like taxes: obstacles to be minimized, evaded, weakened, and, where possible, eliminated. To grow the corporation’s profits, market share, etc., the Board aims to get around those reforms, regulations and taxes that impinge upon that growth. Because the Board is the first receiver of the net revenues (including profits) of the corporation, they possess the funds needed to succeed. Thus, US corporations basically undid the New Deal in the decades after the 1930s.
If all we do now is enact and impose another set of reforms, regulations, and business taxes – and that is all Obama or either party do, think and talk about – we will shortly have a replay on undoing these reforms just like those of the New Deal. The only difference this time will be that corporations will get that job done faster since they have all the accumulated experience in how to do that (by buying politicians, lobbying massively, and funding think tanks to shape the public’s flow of information and analysis of economic events).