THIS WEEK: Derivatives, resolutions, Internet freedom of speech and the 2012 Corporate Power Tool Award
For better or worse, Washington D.C. is a city of awash with acronyms. And this week, there are a few capital letters that the medical device industry would rather you not pay any attention to: MDUFA. Literally, MDUFA stands for Medical Device User Fee and Modernization Act, but in actuality these letters simply mean danger for consumers. A lot of the coverage of MDUFA has focused on the prescription drug aspect. However, the story is about more than drugs. Medical device safety is at a crossroads, and Congress could really mess things up. Here is where MDUFA stands now. We recently wrote a report, which documented the average number of high-risk recalls of medical devices in 2011 was more than double than in recent years. We also documented the keen interest the medical device industry seemed to have in weakening already lax regulations. This week Congress will vote on MDUFA and we urge them to put patient safety ahead of corporate profit.
Today, amid the news coverage of JPMorgan Chase’s $2 billion loss in derivatives bets, Public Citizen published a report, many weeks in the making, that expounds on the historical lessons of derivatives deregulation and the urgency to implement the rules called for in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Read a copy of the press release which links to the report entitled: “Forgotten Lessons of Deregulation: Rolling Back Dodd-Frank’s Derivatives Rules Would Repeat a Mistake that Led to the Financial Crisis.” The report explains how America’s top financial policymakers deregulated the financial derivatives market in the 1990s and provides a detailed account of how deregulation led to the ensuing housing bubble, financial crisis and Great Recession.
The report comes as members of Congress have introduced nine bills that would weaken the derivatives provisions of the Dodd–Frank Wall Street Reform and Consumer Protection Act of 2010.
All seven bills moving in the U.S. House of Representatives have been approved by committees, and three have passed the full House. Two bills that would exempt overseas transactions from Dodd-Frank’s derivatives provisions may be voted on as soon as Thursday in the House Agriculture Committee. Other bills would exempt trades by supposedly “small” players, reduce transparency requirements and strike down a provision to ban derivatives trading by federally insured banks. At least three other bills would impose impediments for agencies to promulgate rules concerning financial services in general.
Two bills, HR 1838, the “Swaps Bailout Prevention Act;” and HR 3283, “The Swap Jurisdiction Certainty Act,” will be voted on in the House Agriculture Committee on Thursday. The bills call for deregulation of swaps! (Yes, really). And so, this week, Public Citizen’s financial reform policy advocate Bartlett Naylor will be appealing to committee members to not deregulate. Naylor explains, “The massive losses by JP Morgan illustrate the dangers of swaps. The nation’s largest bank, famed for state-of-the-art risk management, posted a $2 billion loss from ‘risk management.'”
Later in the week, Public Citizen will be putting out a second report on dangers in the repurchase agreement market. In the run-up to the 2008 financial crisis, banks came to rely increasingly on a sinister method of funding their activities—through “repurchase agreements,” or repos for short. Repos contribute to what is known as the shadow banking system—non-traditional banking activities that have by and large escaped government regulation. Repos may look like simple short-term borrowing agreements, but they can quickly create vast instability in the financial system. Without reform, the financial system is still susceptible to the sudden and severe shocks that repo presents, and banks will continue to depend on federal intervention to rescue them from market failures. Stay tuned to CitizenVox for more on this report!
Also this week, Public Citizen’s Global Trade Watch group and Global Access to Medicines team will continue to monitor the Trans-Pacific Partnership free trade agreement (TPP) negotiations in Dallas. The Dallas round is the latest in a series of TPP negotiations where the United States Trade Representative (USTR) is pushing unprecedented intellectual property (IP) measures on eight other countries in the Asia-Pacific that threaten access to medicines and public health, among other issues. Find out why U.S. Trade negotiators got the “surprise honor” of being presented with the “2012 Corporate Power Tool” award of the year. And then, check out this post at The Nation regarding how you can TAKE ACTION TO STOP THE TPP!
The actions of hundreds of activists in California who have worked tirelessly with Public Citizen’s Democracy Is For People Campaign and other allies are paying off this week as the California State Senate is expected to pass a resolution calling for the Citizens United v. Federal Election Commission U.S. Supreme Court ruling to be overturned!
We are five weeks out from Resolutions Week, a nationwide campaign to get similar resolutions passed at the local level, and we have already surpassed our 100 resolutions goal! Since the Resolutions Week campaign kicked off, over 200 cities and towns nationwide have passed resolutions calling for a constitutional amendment to overturn Citizens United v. FEC. We expect dozens more to pass in the next few weeks leading up to Resolutions Week itself (June 11) when we’ll showcase these local victories.
On a less positive note, you’ve probably noticed: Faced with budget shortfalls, school districts across the country continue to turn to commercial advertising on school property to raise revenue. This is a phenomenon the New York Times expressed concern about in a recent op-ed. Today, Commercial Alert sent a letter to the President of the Poway Unified School District Board of Education, located near San Diego, advising the board not to sell such advertising. Poway’s plans appear to be particularly egregious, including selling student and parents’ email addresses to advertisers and placing commercial logos on bus drivers’ uniforms.
Speaking of selling out people online . . . tomorrow Public Citizen will be defending a blogger and the First Amendment in court. Public Citizen litigator Paul Alan Levy has carved out most of the case law relating to Internet Freedom of Speech and we encourage anyone who has ever posted a comment to a blog to read this post by Paul about tomorrow’s case.
Of course, there’s always more to come to the surface as the week progresses so keep checking back here for updates from your favorite watchdog as we strive to be your voice in the Halls of Power.
Rachel Lewis is Public Citizen’s new media strategist and online outreach coordinator. Follow @Public_Citizen on Twitter.