Gretchen Morgenson, photo by Robin Holland
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March 26, 2010

Even as the ink dries on health care reform, President Obama has turned his attention to another major legislative push — regulating the financial industry. Eighteen months after the most recent financial crisis, reform is finally moving as the Senate prepares to debate Senator Chris Dodd’s bill in the coming weeks.

But will the bill actually do any good? To understand whether Senator Dodd’s bill will do enough to prevent another meltdown, and to find out how ordinary people can follow the debate, Bill Moyers talks to Gretchen Morgenson, a financial journalist and assistant editor at the NEW YORK TIMES. Morgenson, who first began writing about Wall Street’s excessive risk taking well before the last crisis, doesn’t believe the major bills currently before Congress do enough to regulate Wall Street. As she tells Bill Moyers, “I think that the bills that we have seen have been so half-baked, and really do not address some of the crucial elements of reform that are needed if we want to prevent this kind of crisis from happening again.”

At issue for her is allowing banks to grow “too big to fail,” a size so big that they can present a risk to the whole economy. To reduce the size of banks, Morgenson argues, “You have to increase capital requirements. You have to increase the amount that a bank would pay if it gets over and above a certain level, a certain size in assets or in some measure. You have to increase the cost of doing business for these entities if they grow too big. Put the money that they pay into an FDIC type of an insurance fund. But you do have to make it costly. That’s something these people understand.”

Lobbying the Bill

Getting meaningful reform is often easier said than done in Washington, where lobbyists far outnumber legislators, and many legislators rely on wealthy industries to fund their campaigns.

Last November, the Center for Responsive Politics (CRP) published a seven-part series on the power of the financial services lobby, “Crossing Wall Street.” Since 1989, they report, the finance, insurance and real estate sector has been the largest single contributing sector to Congressional campaigns — contributing $2.3 billion in that period.

And the flow of money isn’t stopping. As the report notes, “Despite a moribund economy, the financial industries that have enjoyed relatively little regulation over the years continue pouring big money into ensuring the government’s control over them remains limited.” In fact, they seem to have increased their spending. Since the beginnning of 2009, the finance, insurance and real estate sector has spent more than $500 million on lobbying and campaign contributions.

As you follow the debate over reform, you can continue to track the financial industry’s lobbying and campaign donations on the Center for Responsive Politics’ Web site,


Gretchen Morgenson

Gretchen Morgenson is assistant business and financial editor and a columnist at THE NEW YORK TIMES. She has covered the world financial markets for the TIMES since May 1998 and won the Pulitzer Prize in 2002 for her “trenchant and incisive” coverage of Wall Street.

Morgenson joined the TIMES as assistant business and financial editor in May 1998. Previously, she was assistant managing editor at FORBES magazine since rejoining the magazine in March 1996. Before that, she was the press secretary for the Forbes for President campaign from September 1995 to March 1996.

From August 1993 to August 1995, Ms. Morgenson was the executive editor at WORTH magazine. As the number two editor, she oversaw all financial coverage. She also wrote an investigative “Full Disclosure” column monthly.

From November 1986 to August 1993, she was an investigative business writer and editor at FORBES magazine. She broke the story of anti-investor practices on the Nasdaq stock market that was followed by Justice Department and SEC investigations. Earlier, she oversaw several FORBES investing sections and their Washington bureau. From January 1984 to November 1986, she was a staff writer at MONEY magazine.

Morgenson was a stockbroker for Dean Witter Reynolds in New York from September 1981 to January 1984. She began her career at VOGUE magazine as an assistant editor in August 1976. By the time she left the magazine in July 1981, she was a writer and financial columnist. She is the author of FORBES GREAT MINDS OF BUSINESS, and co-author of THE WOMAN’S GUIDE TO THE STOCK MARKET.