Wall Street Strikes Again-- Against America

By this morning, progressives started signaling that they're not getting on board with the two corrupt Beltway party establishments' intention of using the last minute/must pass omnibus appropriations bill-- to keep the government open-- as an excuse for some especially ugly legislation they could otherwise not pass. Jim McDermott (D-WA) was as clear as a bell: "Republicans in Congress got burned for shutting the government down last year. They are clearly not going to let that happen again. However, their price for keeping the government running is a 2015 Omnibus Bill that contains a pair of unacceptable provisions. The first is a legislative rider, bought and paid for by bank lobbyists, that loosens regulation on risky derivatives trading. It is inconceivable that Congress would cut crucial regulations in the Dodd-Frank Act, when risky derivatives trading was at the center of the 2008 financial crisis. Why is Congress giving Wall Street a massive Christmas present, when so many hardworking Americans are struggling to make ends meet? Secondly, I have grave reservations about the billions of dollars appropriated to the Pentagon to combat ISIS in Iraq and Syria. Exactly what this money will be spent on has not been openly and thoroughly debated on the House Floor. Congress essentially has no idea how these expenditures fit into a comprehensive strategy in Iraq, or how much more money might be needed to combat ISIS in the coming months or years. I will be voting NO on this bill. Sadly, the 2015 Omnibus Bill shows that Congress has not learned crucial lessons when it comes to calamitous derivatives trading or costly proxy wars in the Middle East."

Let's stick to this big smooch Congress is giving Wall Street. Barney Frank-- the Frank in Dodd-Frank-- issued a statement to his former colleagues urging them to reject it outright:

"The provision inserted into the Appropriations bill is a substantive mistake, a terrible violation of the procedure that should be followed on this complex and important subject, and a frightening precedent that provides a road map for further attacks on our protection against financial instability. Ironically it was a similar unrelated rider put without debate into a larger bill that played a major role in allowing irresponsible, unregulated derivative transactions to contribute to the crisis. How to regulate derivatives is a question about which responsible people can differ, and the subject of what insured banks should be doing in this area is a legitimate subject for debate-- but not for a non-germane amendment inserted with no hearings, no chance for further modification, and no chance for debate into a mammoth bill in the last days of a lame-duck Congress. Those who have consistently opposed any significant financial regulation should be willing to put forward their proposals to cut back on the rules we adopted in response to the crisis in a manner that allows full, open discussion, and members supporting this retreat should be required to do so by their votes without the cover of an Omnibus Appropriation, not subject to amendment."

Pelosi has actually been trying to rally all the House Dems to vote no: "Once more, Republicans are working to stack the deck for the special interests against everyone else. Buried in the more than 1,600 pages of the omnibus package Republicans posted in the dead of night are provisions to put hard-working taxpayers back on the hook for Wall Street’s riskiest behavior. This provision, allowing big banks to gamble with money insured by the FDIC, opens the door to another taxpayer-funded bailout of big banks-- forcing middle class families to bear the burden of Wall Street’s mistakes. To make matters worse, the package includes a provision that would work to drown out the voices of the American people and massively expand the role of big money in our elections. With this provision, Republicans would multiply ten times the amount of money wealthy individuals can give to a political party. These provisions are destructive to middle class families and to the practice of our democracy. We must get them out of the omnibus package."

And Pelosi is more than relevant in this debate. Boehner does not have 218 votes for any spending bill that doesn't back forced deportation of Hispanic and Asian immigrants-- and that kind of nonsense isn't going to get more than than half a dozen Blue Dogs in the House and will fail in Senate. Obama wouldn't even have the opportunity to veto it. At least 50-60 radical right Republicans-- which the Beltway media idiots inappropriately refer to as "conservatives"-- will vote against any funding bill without deportation. That means the only way a bill passes is with significant Democratic support. But there are some Wall Street Dems from the Republican wing of the Democratic Party-- the New Dems and Blue Dogs and other regular suspects-- pushing strongly in the other direction, especially Wall Street allies like Jim Himes, the Connecticut New Dem Vice Chair who has already taken $4,512,177 in legalistic bribes from the finance sector since first being elected in 2008. Democrats are already trying to blame this travesty on Republicans-- who do deserve the bulk of the blame-- but the Republicans couldn't do it without Wall Street whores like Himes in the House and Schumer in the Senate.

In the Senate you have Elizabeth Warren leading the charge against the Wall Street provisions with strong backing from progressives like Bernie Sanders and Jeff Merkley. Her floor speech this morning was a barn-burner. "Who does Congress work for?," she began. "Does it work for the millionaires, the billionaires, the giant companies with their armies of lobbyists and lawyers? Or does it work for all of us?"

[T]he House of Representatives is about to show us the worst of government for the rich and powerful. The House is about to vote on a budget deal-- a deal negotiated behind closed doors that slips in a provision that would let derivatives traders on Wall Street gamble with taxpayer money and get bailed out by the government when their risky bets threaten to blow up our financial system.

These are the same banks that nearly broke this economy in 2008 and destroyed millions of jobs. The same banks that got bailed out by taxpayers and are now raking in record profits. The same banks that are spending a whole lot of time and money trying to influence Congress to bend the rules in their favor.

You will hear a lot of folks say that the rule that will be repealed in the Omnibus is technical and complicated, and that you shouldn't worry about it because smart people who know more than you about financial issues say that it's no big deal. Don't believe them. Actually, the rule is pretty simple. Here's what it's called-- the rule that the House is about to repeal-- and I'm quoting from the text of Dodd-Frank-- "PROHIBITION AGAINST FEDERAL GOVERNMENT BAILOUTS OF SWAPS ENTITIES." What does it do?  The provision that's about to be repealed requires banks to keep separate a key part of their risky Wall Street speculation so that there's no government insurance for that part of their business. As the New York Times has explained, "the goal was to isolate risky trading and to prevent government bailouts"-- because these sorts of risky trades-- called ‘derivatives' trades-- were "a main culprit in the 2008 financial crisis."

We put this rule in place after the collapse of the financial system because we wanted to reduce the risk that reckless gambling on Wall Street could ever again threaten jobs and livelihoods on Main Street. We put this rule in place because people of all political persuasions were disgusted at the prospects of future bailouts. And now, no debate, no discussion, Republicans in the House of Representatives are threatening to shut down the government if they don't get a chance to repeal it.

That raises a simple question-- why? If this rule brings more stability to our financial system, if this rule prevents future government bailouts, why in the world would anyone want to repeal it, let alone hold the entire government hostage in order to ram through the repeal?

The reason, unfortunately, is simple. It's about money, and it's about power. Because while this legal change could pose serious risks to our entire economy, it'll also make a lot of money for Wall Street banks. According to Americans for Financial Reform, this change will be a huge boon to just a handful of our biggest banks - Citigroup, JP Morgan, and Bank of America.

...[T]his provision goes too far. Citigroup is large, and it is powerful. But it is a single, private company. It shouldn't get to hold the entire government hostage-- to threaten a government shutdown-- in order to roll back important protections that keep our economy safe. This is a democracy, and the American people didn't elect us to stand up for Citigroup. They elected us to stand up for all of the people.

I urge my colleagues in the House-- particularly my Democratic colleagues, whose votes are essential to moving this package forward-- to withhold support from it until this risky giveaway is removed from the legislation. We all need to stand and fight this giveaway to the most powerful banks in the country.

Yesterday Sherrod Brown (D-OH) was clear where he stands on this as well: "This giveaway to Wall Street would open the door to future bailouts funded by American taxpayers. It’s been just six years since risky financial practices put our economy on the brink of collapse and cost millions of Americans lost jobs, homes, and retirement savings. This provision, originally written by lobbyists, has no place in a must-pass spending bill."

The White House says Obama opposes the rider but, predictably, that they aren’t inclined to pick a fight, blow up the whole bill, and risk a government shutdown over it. They should. Credit default swaps were the biggest factor in blowing up the economy in 2008. The Wall Street criminal class of predators love being able to use the swaps to dramatically raise the stakes on their speculative bets. If we lose this fight, it makes it 10 times more likely we will get another financial crisis sometime in the next few years. No one is trusting Schumer's bullshit blandishments that in exchange for going along with the Republicans and their Wall Street donors, Democrats have secured more money for the enforcement budgets at the Consumer Financial Protection Bureau and the Securities and Exchange Commission.