Council members having second thoughts about bank penalties

Let's hope so. The notion of severing agreements with major lenders, being pushed by Councilman Richard Alarcon, is misguided and irresponsible, to be sure, but it's also an example of shameless pandering to the city unions and the Occupy L.A. protesters that are both peddling this truly idiotic idea. Thankfully, the city has budget chief Miguel Santana, who warns that breaking agreements with banks is no small matter and could cost at least $58 million - money that cash-strapped L.A. cannot afford to lose. From the LAT:

Those arguments have not swayed Councilman Richard Alarcon, whose 2-year-old "responsible banking" ordinance has found new life and a groundswell of support in the Occupy L.A. movement. Alarcon said Santana is "pandering to the banks" and "out of sync with the social dynamic" that has emerged across the nation in recent weeks. The northeast San Fernando Valley councilman said his proposal, which would rate banks based on their commitment to social responsibility and local communities and deny business to those who fail to measure up, could save the city money.

What utter bullshit. Others are beginning to have second thoughts:

Councilman Paul Koretz last week backed passage of a responsible banking measure, saying the nation is "going to hell in a handbasket and it's time people spoke out about it." On Monday, he offered a more muted message. "If it costs us $20 million or $30 million or $40 million to do the right thing, then we're probably doing the wrong thing," he said.

Clearly, the banks got away with murder in some cases, and clearly reforms are in order. We all know that. But a great many voters are pushing for less regulation, not more. And as we're seeing with the Dodd-Frank legislation, passing a financial overhaul is not the same as implementing it - and bank lobbyists are doing all they can to water down the particulars. Columbia University Prof. Jeffrey Sachs laid out the problem quite well the other day on KCRW's "To the Point."