A Handful Of Democrats Are On Board With The GOP To Repeal Dodd Frank

The Republicans have gotten down to brass tacks in terms of dismembering and repealing pieces of Dodd Frank. Thursday they passed two bad bills, Ann Wagner's SEC Regulatory Accountability Act, which passed 243-184, and Michael Conaway's Commodity End-User Relief Act, which passed 239-182. The Republicans got help from a small handful of Democrats who are generally seen as Wall Street allies on each bill-- and populist Walter Jones (R-NC) voted with the Democrats against each.

The SEC Regulatory Accountability Act will require the SEC to review the costs of rules and justify the benefits and prohibits the commission from issuing a rule when it cannot make “a reasoned determination that the benefits of the intended regulation justify the costs of the regulation.” These were the bad Democrats who crossed the aisle on this-- plus how much they took from the Finance Sector this past cycle:

• Sanford Bishop (Blue Dog-GA)- $126,252
• Tony Cárdenas (New Dem-CA)- $292,550
• Henry Cuellar (Blue Dog-TX)- $219,650
• Josh Gottheimer (Blue Dog-NJ)- $884,619
• Scott Peters (New Dem-CA)- $456,441
• Jacky Rosen (D-NV)- $131,157
• Kurt Schrader (Blue Dog-OR)- $204,475
• Kyrsten Sinema (Blue Dog-AZ)- $1,056,190
• Tom Suozzi (D-NY)- $379,200

The idea behind the Commodity End-User Relief Act is to get rid of the ability of the Commodity Futures Trading Commission (CFTC) to set position limits on commodities, agricultural as well as metals, oil, gasoline and natural gas. The position limits were included in Dodd-Frank because speculative trading-- i.e., gambling-- had driven up the costs of gasoline, diesel and other commodities and contributed to the 2007-08 financial crisis. The banksters who pay off members of Congress want to be able to continue speculating and running up their own commissions. These are the 7 Democrats who voted with the Republicans-- along with the amount they took this cycle from the Finance Sector:

• Sanford Bishop (Blue Dog-GA)- $126,252
• Henry Cuellar (Blue Dog-TX)- $219,650
• Josh Gottheimer (Blue Dog-NJ)- $884,619
• Scott Peters (New Dem-CA)- $456,441
• David Scott (New Dem-GA)- $595,490
• Kyrsten Sinema (Blue Dog-AZ)- $1,056,190
• Tom Suozzi (D-NY)- $379,200

Not even the ultimate Wall Street puppets-- Jim Himes, Joe Crowley, Sean Patrick Maloney and John Maloney-- could bring themselves to vote for these two crap bills. Pelosi should never have appointed Gottheimer to the House Financial Services Committee. That was a terrible move, one we will all regret. But she made a good mover yesterday in appointing Ro Khanna (D-CA) to the Budget Committee. During the election, watching the tremendous amount of Wall Street cash ($919,601) flowing into Khanna's campaign coffers, I was outspokenly worried about him being another Wall Street shill like Gottheimer. But it looks like I was wrong. So far he's proven himself to be exactly what he said he would be-- am outspoken progressive, standing up for working families. Yesterday on his Facebook page, he posted an unfortunate picture of Cory Booker with an article about how he sold out on Big Pharma Wednesday night-- along with this message: "I stand with Bernie Sanders in supporting lowering drug prices for Americans by importing drugs from Canada. I am deeply disappointed in the 13 Senate Democrats who voted against this. The pharmaceutical lobby has way too much influence. It's why I am proud to be one of six members of Congress not to take PAC money and believe we need to ban PAC money from Congress."

This morning Khanna told me that he said "throughout the campaign that the two biggest policy mistakes of our time we're the war in Iraq and the repeal of Glass Steagell and deregulation that led to the financial crisis. I had opposed the war in Iraq as a 27 year old when I challenged Tom Lantos in 2003 in the nation's first anti war primary on Iraq. And I have always been for the Volker rule and re-writing the rules of corporate governance so it does favor short termism. I have also been a strong support of the financial transaction tax, influenced by Roberto Unger's work whom I had in law school.

"Open Secrets reports all individual contributions as part of an industry and they lump venture capital contributions as securities and investment. The reality is most of the individuals who supported me did so because of my vision of bringing tech jobs across America and liked my plans to speak about job creation from a Democratic perspective.

"I will fight for Sanders economic values and add to that a focus on job creation and how we need to re wire the labor markets to adapt to automation and globalization and invest in the right type of education and development. I also will make the case that the progressive economic values lead to the best economic growth. After all, my district has Apple, Google, Intel, Yahoo and Tesla!"

Yesterday, Matt Stoller, writing for the Washington Post critiqued Obama's bad financial policies, which he claims have derailed the Democratic Party's electoral outreach towards the working class.

Two key elements characterized the kind of domestic political economy the administration pursued: The first was the foreclosure crisis and the subsequent bank bailouts. The resulting policy framework of Tim Geithner’s Treasury Department was, in effect, a wholesale attack on the American home (the main store of middle-class wealth) in favor of concentrated financial power. The second was the administration’s pro-monopoly policies, which crushed the rural areas that in 2016 lost voter turnout and swung to Donald Trump.

Obama didn’t cause the financial panic, and he is only partially responsible for the bailouts, as most of them were passed before he was elected. But financial collapses, while bad for the country, are opportunities for elected leaders to reorganize our culture. Franklin Roosevelt took a frozen banking system and created the New Deal. Ronald Reagan used the sharp recession of the early 1980s to seriously damage unions. In January 2009, Obama had overwhelming Democratic majorities in Congress, $350 billion of no-strings-attached bailout money and enormous legal latitude. What did he do to reshape a country on its back?

First, he saved the financial system. A financial system in collapse has to allocate losses. In this case, big banks and homeowners both experienced losses, and it was up to the Obama administration to decide who should bear those burdens. Typically, such losses would be shared between debtors and creditors, through a deal like the Home Owners Loan Corporation in the 1930s or bankruptcy reform. But the Obama administration took a different approach. Rather than forcing some burden-sharing between banks and homeowners through bankruptcy reform or debt relief, Obama prioritized creditor rights, placing most of the burden on borrowers. This kept big banks functional and ensured that financiers would maintain their positions in the recovery. At a 2010 hearing, Damon Silvers, vice chairman of the independent Congressional Oversight Panel, which was created to monitor the bailouts, told Obama’s Treasury Department: “We can either have a rational resolution to the foreclosure crisis, or we can preserve the capital structure of the banks. We can’t do both.”

Second, Obama’s administration let big-bank executives off the hook for their roles in the crisis. Sen. Carl Levin (D-Mich.) referred criminal cases to the Justice Department and was ignored. Whistleblowers from the government and from large banks noted a lack of appetite among prosecutors. In 2012, then-Attorney General Eric Holder ordered prosecutors not to go after mega-bank HSBC for money laundering. Using prosecutorial discretion to not take bank executives to task, while legal, was neither moral nor politically wise; in a 2013 poll, more than half of Americans still said they wanted the bankers behind the crisis punished. But the Obama administration failed to act, and this pattern seems to be continuing. No one, for instance, from Wells Fargo has been indicted for mass fraud in opening fake accounts.

Third, Obama enabled and encouraged roughly 9 million foreclosures. This was Geithner’s explicit policy at Treasury. The Obama administration put together a foreclosure program that it marketed as a way to help homeowners, but when Elizabeth Warren, then chairman of the Congressional Oversight Panel, grilled Geithner on why the program wasn’t stopping foreclosures, he said that really wasn’t the point. The program, in his view, was working. “We estimate that they can handle 10 million foreclosures, over time,” Geithner said-- referring to the banks. “This program will help foam the runway for them.” For Geithner, the most productive economic policy was to get banks back to business as usual.

Nor did Obama do much about monopolies. While his administration engaged in a few mild challenges toward the end of his term, 2015 saw a record wave of mergers and acquisitions, and 2016 was another busy year. In nearly every sector of the economy, from pharmaceuticals to telecom to Internet platforms to airlines, power has concentrated. And this administration, like George W. Bush’s before it, did not prosecute a single significant monopoly under Section 2 of the Sherman Act. Instead, in the past few years, the Federal Trade Commission has gone after such villains as music teachers and ice skating instructors for ostensible anti-competitive behavior. This is very much a parallel of the financial crisis, as elites operate without legal constraints while the rest of us toil under an excess of bureaucracy.

With these policies in place, it’s no surprise that Thomas Piketty and others have detected skyrocketing inequality, that most jobs created in the past eight years have been temporary or part time, or that lifespans in white America are dropping. When Democratic leaders don’t protect the people, the people get poorer, they get angry, and more of them die.

Yes, Obama prevented an even greater collapse in 2009. But he also failed to prosecute the banking executives responsible for the housing crisis, then approved a foreclosure wave under the guise of helping homeowners. Though 58 percent of Americans were in favor of government action to halt foreclosures, Obama’s administration balked. And voters noticed. Fewer than four in 10 Americans were happy with his economic policies this time last year (though that was an all-time high for Obama). And by Election Day, 75 percent of voters were looking for someone who could take the country back “from the rich and powerful,” something unlikely to be done by members of the party that let the financiers behind the 2008 financial crisis walk free.

This isn’t to say voters are, on balance, any more thrilled with what Republicans have to offer, nor should they be. But that doesn’t guarantee Democrats easy wins. Throughout American history, when voters have felt abandoned by both parties, turnout has collapsed-- and 2016, scraping along 20-year turnout lows, was no exception. Turnout in the Rust Belt, where Clinton’s path to victory dissolved, was especially low in comparison to 2012.

...Many Democrats think that Trump supporters voted against their own economic interests. But voters don’t want concentrated financial power that deigns to redistribute some cash, along with weak consumer protection laws. They want jobs. They want to be free to govern themselves. Trump is not exactly pitching self-government. But he is offering a wall of sorts to protect voters against neo-liberals who consolidate financial power, ship jobs abroad and replace paychecks with food stamps. Democrats should have something better to offer working people. If they did, they could have won in November. In the wreckage of this last administration, they didn’t.