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Home Publications Blogs Beat the Press Credit Rating Reform: "Even Senator Schumer"

Credit Rating Reform: "Even Senator Schumer"

Wednesday, 16 June 2010 03:59

It's no secret that New York Senator Charles Schumer is very close to Wall Street. As a senator from New York he directly represents Wall Street firms and their employees. He also gets huge amounts of campaign contributions from Wall Street. For this reason it would not be surprising that he would oppose any measure that changes the way business is conducted on Wall Street.

This is why it is surprising that the NYT told readers that: "Even Senator Charles E. Schumer (emphasis added)" raised questions about an amendment put forward by Senator Al Franken that would require that credit rating agencies be selected by the SEC rather than the issuer seeking the rating. The current situation creates an obvious conflict of interest since the credit rating agency has an incentive to issue positive ratings to ensure more business. Senator Franken's amendment eliminated this conflict by taking away the power for the issuer to pick the agency.

Given his close ties to Wall Street, it would be surprising if Senator Schumer would support any measures that interfer with a pattern of business that is very profitable for both issuers and credit rating agencies. The article notes that Schumer originally voted for the Franken amendment. It is of course common for members of Congress to vote for popular measures when they know that their vote will not make a difference. Since the Franken amendment passed with strong bi-partisan support, Senator Schumer's vote would not have made a difference in its passage. It does however give him more standing now with naive observers as he works to kill it.

Comments (2)Add Comment
written by izzatzo, June 16, 2010 9:16
Even George Wallace was for segregation in schools before he was against it, even Timothy McVeigh was for government in the military before he was against it, even Boy Monarch Bush was for not-too-big-to-fail before he was against it ...
written by cartias, June 16, 2010 10:05
The person who has been good with keeping all of his own bills current.Lets not forget paying taxes with no loop holes working for the man is the one who takes the hit.The little people's voices always seem to be left out, or are the last resort to be heard,and just maybe we'll throw you a bone.The last I checked good hard working employees help make money for the employer. Schumer its business as usual " ON THE TAKE !!!!!"

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.