Now This is Bipartisanship We Can Believe In

Zandar succeeds in distracting us from health care deform:

Newsweek is reporting that tomorrow, Sens. John McCain and Maria Cantwell will introduce a bill to reinstate Glass-Steagall.

More than a year after the election, the Arizona Republican is looking to repair that reputation by joining up with Democratic firebrand Maria Cantwell to propose something that will be anathema to both Wall Street and the Obama administration. According to two congressional sources, the two maverick senators want to reinstate Glass-Steagall Act, the Depression-era law that forced the separation of regular commercial banking from Wall Street investment banking. The senators' proposal echoes a failed amendment introduced in the House last week by Rep. Maurice Hinchey of New York.

The Senate prospects for the success of the McCain-Cantwell bill—which the two plan to announce together on Wednesday morning—seem bleak at best. But McCain and Cantwell join a still small but not insignificant insurgency of chronic doubters, including former Federal Reserve chairman Paul Volcker, who say not nearly enough is being done to change Wall Street and, in particular, to address the "too big to fail" problem. The issue is one of the few in Washington that can unite the left and right sides of the political spectrum. Democrats like Cantwell deplore Wall Street's outsize role in the real economy and its lobbying influence, and conservatives such as McCain are appalled at the way the market system has been undermined—some would say rigged—by the power of the big banks.

Bankers and regulators, Volcker said earlier this month, "have not come anywhere close to responding with necessary vigor" to the crisis. He wants to ban federally guaranteed commercial banks from risky trading in derivatives and other arcane instruments that could precipitate another huge bailout some day. That too is a proposal no one who currently controls the levers of power in Washington is considering. But among those who now support Volcker is Arthur Levitt Jr., the former chairman of the Securities and Exchange Commission. "I tend to be in the Volcker camp in saying banks should either be investment banks or take deposits and make loans," Levitt told me in an interview this week.

You guys have no idea how much it grinds my gears to blog this, but I hope McCain kicks Obama's ass on this one. I mean it has no chance to pass and we need to have this done, on the other hand McCain knows this and this will put the Dems and Obama on record as against real regulation.

Then again, given McCain's 180 on climate change, McCain will push this just as long as he can benefit from it (where Cantwell really does want to see this pass).

Still, seeing Glass-Steagall reinstated would certainly show the banksters who the boss is.

I'll just add that right now I'm all in favor of anything and everything that exposes in the most publicly humiliating way possible the cowardice, mendacity and corporate ownership of the Obama administration and the Democratic Congress.