"When fascism comes to America, it will be wrapped in the flag and carrying the cross."
-- Sinclair Lewis
Sunday, May 06, 2018
Vulture Capitalist Ken Langone Wants To Combat Bernie By Financing The Republican Wing Of The Democratic Party
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Ken Langone, the Long Island vulture capitalist who put together part of the money for the founders of Home Depot, has a current net worth of something around $3 billion. He'll be 83 before the midterms and he's doing all he can to disadvantage progressives with his money. Generally, he gives contributions to Republicans but he's fine with conservative, Wall Street-friendly Democrats too. Little Chuckie Schmucky always gets a check from Langone, although his biggest contributions inevitably go to the RNC and the NRCC (the Republicans' version of the DCCC)-- so far around $150,000 for the latter. This cycle, understanding the ramifications of the coming blue wave, Langone is donating to centrist Democratic PACs in an attempt to shape the character of the Democratic majority. He's working diligently to save the House for the Wall Street and corporate elites. On Friday, the Wall Street Journal's Alexandra Wolf reported that when Langone saw Bernie’s rallies (on TV of course) during the 2016 presidential campaign, he was "shocked by the number of young people there. It troubled him that they were so enthusiastic for higher taxes and spending and an expanded government role in health care, child care and higher education. 'If these kids are moving up in our system now, we're in trouble,' he recalls thinking." He "decided that capitalism needed a full-throated defense. So he wrote a book being released next week, part memoir and part free-market manifesto, I Love Capitalism. It's not even officially out yet and it already bombed. Last month the House voted on Arkansas former bankster French Hill's bill H.R.4790, the Volcker Rule Regulatory Harmonization Act Two crooked New Dems were co-sponsors-- Josh Gottheimer (NJ) who has taken Financial Sector bribes this cycle that amount to $868,574 already, and fellow House Financial Services Committee members Bill Foster (IL-$234,785 this year). The bill passed with every Republican but one and with 78 Democrats, primarily New Dems and Blue Dogs-- 300 to 104. 103 Democrats, led by Pelosi voted against it. Those 78 spurious Democrats are Langone's kind of congressmembers, despite the "D"s next to their names.
The Volcker Rule Regulatory Harmonization Act was a top priority for Wall Street this year. Why? After a conference committee with the Senate-- and assuming Trump signs it-- the bill will weaken the Volcker Rule, which prohibits banks from gambling-- they call it "making speculative investments"-- with their ordinary depositors' money, by exempting banks with less than $10 billion in assets. The bill takes the FDIC out of the regulatory equation and leaves the policing up to the very Wall Street-friendly Federal Reserve. In an interview with the Wall Street Journal, the chair of the FDIC explained that exempting smaller banks would "open a door" to risky behavior. He said supervisors catch risky trades after they go south, not before: "That is why you have the Volcker rule in the first place."
The American Bankers Association, Citigroup and Bank of America were the big players in lobbying to weaken the Volcker Rule-- as the major campaign contributors to the New Dems.
Blue America doesn't endorse New Dems. New Dems muddy the Democratic Party brand and make it difficult for voters to understand that there is a difference between the two Beltway parties. At one point, for example, we were leaning towards endorsing Harley Rouda as the best-- if flawed (ex-Republican)-- candidate to take on Dana Rohrabach. There are no good New Dems. They are the Wall Street wing, the Republican wing, of the Democratic Party and they do a great deal of damage to the party and to the country. Earlier today we ran the names of all the candidates who have been endorsed by the New Dems this cycle. Here's a list of all the current members of the heinous organization. The bolded names voted with the GOP last month to weaken the Volcker Rule. First the New Dems' 9 elected offices:
Are New Dems Really Democrats. A Vote Yesterday Answers The Question
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One of the smarter members of Congress told me this after reading this post today: "Generally speaking, if someone offers you campaign money in order to change a law affecting that certain someone, it’s safe to say that it’s not a change for the better. This basic understanding seems to elude virtually every Member of Congress, in both parties-- but some more than others."
Friday morning there was a vote in the House-- not covered by the media at all-- that separated actual Democrats from the New Dems, the Republican wing of the Democratic Party. The bill came out of the House Financial Services Committee and was presented for the committee by French Hill of Arkansas. Only one Republican voted against it, former Democrat, Walter Jones (R-NC). H.R.4790, the Volcker Rule Regulatory Harmonization Act, had 3 co-sponsors from the committee, Randy Hultgren (R-IL) and two New Dems who have been bought by Wall Street, Josh Gottheimer (NJ-$868,574 this year) and Bill Foster (IL-$234,785 this year). The bill passed with every Republican but one and with 78 Democrats, primarily New Dems and Blue Dogs-- 300 to 104. 103 Democrats, led by Pelosi voted against it. The Volcker Rule Regulatory Harmonization Act was a top priority for Wall Street this year. Why? After a conference committee with the Senate-- and assuming Trump signs it-- the bill will weaken the Volcker Rule, which prohibits banks from gambling-- they call it "making speculative investments"-- with their ordinary depositors' money, by exempting banks with less than $10 billion in assets. The bill takes the FDIC out of the regulatory equation and leaves the policing up to the very Wall Street-friendly Federal Reserve. In an interview with the Wall Street Journal, the chair of the FDIC explained that exempting smaller banks would "open a door" to risky behavior. He said supervisors catch risky trades after they go south, not before: "That is why you have the Volcker rule in the first place." The American Bankers Association, Citigroup and Bank of America were the big players in lobbying to weaken the Volcker Rule-- as the major campaign contributors to the New Dems. Blue America doesn't endorse New Dems. They muddy the Democratic Party brand and make it difficult for voters to understand that there is a difference between the two Beltway parties. At one point, for example, we were leaning towards endorsing Harley Rouda as the best-- if flawed (ex-Republican)-- candidate to take on Dana Rohrabach had already endorsed two other candidates when the New Dems offered them tentative endorsements. One rejected it and she stayed on our endorsement list. The other happily accepted it and-- she's no longer a Blue America candidate. There are no good New Dems. They are the Wall Street wing, the Republican wing. And endorsement of a New Dem means the Republican is so bad that you're holding your nose and openly, consciously embracing a lesser-of-two evils approach. The Congressional Progressive Caucus always had one thing going for it, a thing that enabled it to influence the House Democratic Conference in a progressive direction. They've left that go and have been surpassed in influence-- completely and utterly surpassed-- by the New Dems, now the power center of the Democratic Party. These are the members of the New Dems and their lifetime bribes-- or "contributions" as they prefer to term it-- from the Financial Sector). The bolded names voted with the GOP yesterday to weaken the Volcker Rule. First the New Dems' 9 elected offices
Takeaway: the New Dems are the heart and soul of the Republican wing of the Democratic Party. And they're taking over. Joe Crowley is trying to vote like a Democrat lately so he can slip into the speaker's chair but he was the chair of the New Dem caucus for many years and still-- along with another "non-member," Steny Hoyer-- calls the shots there. Tim Canova is the independent progressive South Florida law professor running for the seat Wasserman Schultz has been occupying-- and running her scams through-- for far too long. This morning, he told us that "Debbie Wasserman Schultz claims to be fighting for a progressive agenda. Nothing could be further from the truth. She’s been swimming in corporate money for years and shamelessly pushing corporate interests in Congress. For instance, she’s taken millions of dollars from big Wall Street banks, payday lenders and other financial institutions. In return, she shills for payday lenders and votes to deregulate Wall Street banks, most recently voting to exempt banks with less than $10 billion in assets from the Volcker Rule, a key provision in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, that seeks to prevent banks from gambling with their depositors’ money. In the past, Wasserman Schultz has pushed a Republican bill to prevent the federal Consumer Financial Protection Bureau from regulating predatory payday lending-- now part of the Trump administration’s agenda for financial deregulation. Ask Wasserman Schultz about progressive alternatives to payday lending-- such as community banking, public banking, postal banking-- and she will have no idea what you’re talking about. And that’s because it’s not part of the agenda of her Wall Street cronies."
There were only 14 New Dems who voted against the bill many of them breaking with Wall Street out of fear of primaries by real Democrats-- like Darren Soto who will soon be fighting progressive champion Alan Grayson for his political life-- or for similar political considerations. As for the future... the DCCC is not recruiting good government reformers like Canova. No way! Instead it is fanatically recruiting corrupt New Dems like Wasserman Schultz as Democratic candidates this cycle, doing all they can to crush independent-minded progressives.
Zach Carter is one of Huff Po's most perceptive reporters and yesterday he warned his readers that while we were all distracted by the clown show Trump had finally delivered one on big campaign promise-- not for his voters, of course, but for his Wall Street donors-- he pretty much gutted Dodd-Frank. "Trump," he reminded us, "campaigned on conflicting promises about big banks. One minute, he was going to stick it to the corrupt financial insiders who had wrecked the middle class. The next, he’d vow to liberate our benevolent princes of capital from crushing regulations Obama had cruelly imposed." Pushed by the traditional GOP swamp creatures all around him-- from Pence, Ryan, Priebus and Hensarling to Mnuchin, Ross and Cohn-- the Trump Regime has been all about deregulation.
Last week, a council of top regulators quietly met to discuss the future of the Volcker rule-- the most important structural change Obama established for the financial system. A few days later, a freshly installed Trump official went further, threatening to defang the rule “unilaterally” by “reinterpreting” its entire purpose. The rule is basically dead, Keefe Bruyette & Woods analyst Brian Gardner wrote in a note to clients last Monday: “Examiners can start giving banks the benefit of the doubt regarding compliance with Volcker almost immediately.” The Volcker rule was conceived as an update to the Depression-era Glass-Steagall law, which banned traditional banks from engaging in risky, high-stakes securities ventures, which became the domain of investment banks, hedge funds and other firms that didn’t rely on federal support. Until its repeal in the 1990s, Glass-Steagall put an end to many conflicts of interest that had plagued banking during the Roaring Twenties, and prevented government subsidies from flowing into speculative securities schemes, which made it harder for big crazy asset bubbles to accumulate. Glass-Steagall was as powerful as a sledgehammer, but only slightly more precise. The Volcker rule tried to draw a finer distinction. Instead of banning banks from the securities business outright, it only barred proprietary trading. Banks were no longer allowed to make reckless bets for their own accounts, but other types of trading to help clients meet legitimate market needs would be permitted. Done right, the Volcker rule would have been a technocratic improvement on Glass-Steagall, providing all the benefits of its New Deal predecessor without its costs. It reflected the broader approach Obama and congressional Democrats took with Wall Street reform, treating the financial crisis as a mechanical malfunction best corrected by expert regulators who could write specific rules for nuanced situations. The economic system, they believed, could not be properly repaired with blunt instruments or lines in the sand. Twenty-first-century banking is indeed a nasty thicket of money and numbers. But the financial crisis was more than a technocratic breakdown. It was an abuse of power. And the 2010 Dodd-Frank law didn’t really try to reshape the political dynamic between Wall Street and Washington. A handful of financial titans retained control over multitrillion-dollar institutions tasked with socially essential functions. They were not prosecuted for fraud, they continued to lobby both Congress and federal agencies with ferocity, and their firms continued to provide lucrative jobs for political operatives from both parties. Against this mountain, Obama set the willpower of individual regulators. It didn’t work. Consider the Volcker rule, which ran into trouble almost immediately. “One of the world’s largest banking firms” enlisted the Podesta Group-- a lobbying powerhouse founded by Democratic power brokers John and Tony Podesta-- to water down the rule in Congress. The Podesta Group still boasts about the effort on its website, under “Wins.” “The client’s desired language on the ‘Volcker Rule’ was passed into law,” reads the page, titled “Challenging Wall Street Reform To Defend Jobs.” The lobbying barrage continued at the regulatory agencies, whose final version of the rule stretched to 300 pages of loopholes, exemptions and special considerations. Bank lobbyists succeeded in delaying the implementation of key elements of Volcker for years. Now the beast is being put out of its misery by Trump appointees with close ties to the financial industry, demonstrating that Wall Street’s political clout remains as strong as ever. Volcker’s destroyers will include former bank lawyer Keith Noreika, along with Treasury Secretary Steve Mnuchin, a Goldman Sachs alum, and Securities and Exchange Commission Chairman Jay Clayton, who served as Goldman’s bailout attorney. A similar fate will soon follow for the derivatives regulations and other rules written during the Obama years. Even capital requirements, the simplest and last line of defense against bad bank behavior, are under assault following the resignation of Federal Reserve Governor Daniel Tarullo. We will never know if Obama’s tweaks and adjustments would have prevented or ameliorated another financial crisis. Today, big banks are bigger than they were before the crash, and are returning to pre-crash levels of oversight. The potential for financial turmoil under an erratic president is just as strong as the potential for foreign policy dislocation. The one element of Dodd-Frank that will likely survive the Trump presidency is also the only aspect that seriously restructured the power relationship between government and finance. The new Consumer Financial Protection Bureau is important not because it involves a host of complicated new rules-- stealing from customers was illegal before, during and after the crisis-- but because it changes the way these protections are enforced. Prior to Obama, consumer banking products were regulated by five different agencies that competed with each other for “assessment” fees paid by the banks they regulated. This gave banks political power over their regulators-- an agency that was too tough on consumer protection risked losing its banks, and the funding they brought, to another regulator. Obama scrapped this regime in favor of a single consumer finance overseer, the CFPB, and charged lifelong consumer advocate Elizabeth Warren with setting up the agency and hiring critical personnel. This established a new power center in Washington capable of challenging not only big banks, but also broken bureaucracy. When Obama’s Education Department turned a blind eye to student loan abuses, the CFPB took action. It has returned over $11 billion in ill-gotten bank gains to customers since its inception. So the next meltdown probably won’t be caused by consumer fraud. Other than that, we’re pretty screwed.
As we mentioned a couple of weeks ago, the corrupt nest of thieves headed by Texas crook Jeb Hensarling-- the House Financial Services Committee-- has almost been entirely bought off by the banksters. Millions and millions of dollars in bribes have gone to corrupt Republicans like Hensarling ($7,372,690), Ed Royce ($6,931,797), Steve Stivers ($4,192,037), Patrick McHenry ($3,949,286), Peter King ($2,761,274), Sean Duffy ($2,376,646) and Blaine Luetkemeyer ($2,371,565) and to corrupt Democrats on the committee as well-- Jim Himes ($5,545,212), Gregory Meeks ($3,120,688), DavidScott ($2,770,894), Charlie Crist ($2,474,349), John Delaney ($2,100,202) and Kyrsten Sinema ($1,662,043). There's no doubt the House is going to pass the legislation the bank lobbyists have written for Hensarling, destroying as many consumer protections as they can, especially the CFPB. But even McConnell admits that the greed and avarice of the banksters and the bribed House members won't get the legislation through the Senate for Señor Trumpanzee to sign. McConnell told Bloomberg News "I’d love to do something about Dodd-Frank, particularly with regard to community banks but that would require Democratic involvement. I’m not optimistic... So far, my impression is the Democrats on the banking committee believe that Dodd-Frank is something akin to the Ten Commandments."
Despite McConnell’s remarks, helping community lenders hasn’t been the main sticking point in negotiations between Republicans and Democrats. Ohio Senator Sherrod Brown, the banking panel’s top Democrat, has said he supports relaxing rules for the smallest banks. But Democrats have been vocal in resisting any changes to Dodd-Frank that they say will aid Wall Street, such as scrapping Volcker Rule trading restrictions and weakening the Consumer Financial Protection Bureau. On Tuesday, Brown pushed back on McConnell’s contention that Democrats are blocking efforts for a bipartisan compromise. “The Senate Republican leader seems to have forgotten the harm Wall Street’s greed and reckless behavior caused to millions of working families and taxpayers,” Brown said in a statement. “If this were really about community banks, we might have come to an agreement years ago. Republicans are once again using them as leverage to help a rogue’s gallery of special interests.” [Senate Banking Committee chair Mike] Crapo has previously said efforts to revise Dodd-Frank would be slow as most major bills require 60 votes to pass the Senate, and Republicans hold just 52 seats. The House is moving faster, with that chamber’s Financial Services Committee approving legislation earlier this month that would alter many of the law’s key provisions. House Speaker Paul Ryan has said he wants the legislation to move to a floor vote as soon as possible. Absent action by Congress, McConnell said rolling back Dodd-Frank will fall to the Trump administration. After a slow start, President Donald Trump has made progress in recent weeks in filling the agencies that oversee Wall Street with his own appointees. Trump, who has called Dodd-Frank a “disaster” that has made it difficult for businesses to get loans, signed an executive order in February requiring regulators to examine financial rules. The Treasury Department is scheduled to issue a report on the findings next month, kicking off what the administration has promised will be a broad rewrite of regulations implemented under Dodd-Frank. Unless the situation in Congress changes, we will be “stuck with whatever the administration thinks it can do on its own to modify the impact of Dodd-Frank,” McConnell said.
Elizabeth Warren And Keith Ellison Double-Teaming For America's Working Families
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Yesterday Elizabeth Warren was the keynote speaker at an AFL-CIO conference. Her speech is embedded above and I didn't quote too much from it below. The coverage-- from Politico and the Wall Street Journal on the right to The Nation on the left-- was far more serious than coverage of speeches by other senators and far more serious than speeches by presidential candidates, whether serious ones like Hillary Clinton, Jeb Bush or silly ones like Mike Huckabee and Jim Webb. The three lead paragraphs-- Politico: "Sen. Elizabeth Warren savaged trickle-down economics and took a swipe at President Ronald Reagan on Wednesday, blaming both parties for policies she said have devastated U.S. workers while propping up the wealthy." Wall Street Journal: "Sen. Elizabeth Warren delivers a stinging critique of Republicans and Democrats alike in a speech this morning that said policies pushed by both parties have created financial hardships for everyday families while further enriching a narrow sliver of Americans." The Nation: "If you want to understand the coming intra-party battles on economic issues between progressive Democrats and their moderate colleagues-- which will no doubt bleed into the 2016 Democratic presidential primary-- Senator Elizabeth Warren’s keynote speech to an AFL-CIO conference on Wednesday might be your best blueprint." We'll stick with George Zornick's insights at The Nation since its more revelatory than the other two more straight forward reports. Zornick set the background by reminding his readers that President Obama's message is that everything is getting better. But that isn't how Warren sees it. "Despite these cheery numbers," she told her audience regarding the recent White House charm offensive of stats showing an economy clearly turned around, "America's middle class is in deep trouble."
Her argument was that while individual indicators are looking up, there is a structural problem in the American economy that’s only getting worse. “When I look at the data here-- and this includes years of research I conducted myself-- I see evidence everywhere about the pounding that working people are taking. Instead of building an economy for all Americans, for the past generation this country has grown an economy that works for some Americans.” She cited familiar stats about how wages flattened out in the early 1980s while profits grew, and that expenses grew as well: she noted Americans are paying far more for mortgages, health insurance and tuition than they did 30 years ago. Warren described how quite literally 100 percent of the income gains in the past 32 years went to the top ten percent of earners. “These families are working harder than ever, but they can't get ahead. Opportunity is slipping away. Many feel like the game is rigged against them-- and they are right,” Warren said. “The game is rigged against them…. The world has changed beneath the feet of America's working families.” No doubt Obama agrees with much of that analysis-- and has voiced it himself at various times. But he either doesn’t agree with, or expends no energy undertaking, some of Warren’s solutions to structural problems: like, say, breaking up the big banks, which Warren expressly advocated in her speech Wednesday. Warren also has spent a lot of time raising concerns about the Trans-Pacific Partnership trade deal in recent months, and referred Wednesday to “trade pacts and tax deals that let subsidized manufacturers around the globe sell here in America while good American jobs get shipped overseas.” Obama, of course, is pushing hard for TPP to be fast-tracked. These specific policy disagreements between Warren and Obama-- and between many progressive and moderate Democrats more broadly-- are best explained by the philosophical difference Warren tried to outline in Wednesday’s speech. If you believe the economy is basically doing fine, you’re less likely to want to rock the boat policy-wise. You’ll push for some nice things like increasing the minimum wage, but nothing enormous. Things are good! But if you believe, as Warren and many of her progressive allies in Congress do, that the game is fundamentally rigged, the rhetorical and substantive response to economic problems is much different. We’ve seen this difference play out in small skirmishes already. Warren led an unsuccessful charge against relaxing a substantial Dodd-Frank rule during the year-end appropriations process-- a measure backed by Democratic leadership in the Senate and not deemed veto-worthy by Obama. Right now, a House bill to delay the Volcker Rule is being backed by House Minority Whip Steny Hoyer. These are fundamentally fights about how much power Wall Street should be allowed to have, and the government’s role in checking it.
While Warren was talking to the AFL-CIO, Keith Ellison was on the House floor leading the Democrats' efforts to stop the Republicans from rushing through a hodgepodge of 11 bills meant to weaken Wall Street reform and further reward conservative campaign contributors at the expense of America's working families. Because the Republicans were still getting "corrections" to the bill from Wall Street lobbyists, they were forced to put the toxic package on the floor as a motion to suspend the rules and pass, which requires a 2/3 majority to pass. Klan Whip Scalise may have thought they had enough right-wing Democrats crossing the aisle to get it through... but he turns out to be as bad a vote counter as McCarthy was. The final vote was 276-146 and it certainly separated the wheat from the chaff inside the Democratic Party. Starting with the Democratic freshmen (bolded), these are the 35 most eager to sell out their constituents to Wall Street banksters:
• Brad Ashford (Blue Dog-NE) • Don Beyer (New Dem-VA) • Gwen Graham (Blue Dog-FL) • Ami Bera (New Dem-CA) • Sanford Bishop (Blue Dog-GA) • Julia Brownley (New Dem-CA) • Cheri Bustos (Blue Dog-IL) • John Carney (New Dem-DE) • Jerry Connolly (New Dem-VA) • Henry Cuellar (Blue Dog-TX) • John Delaney (New Dem-TX) • Suzan DelBene (New Dem-WA) • Elizabeth Esty (New Dem-CT) • Bill Foster (New Dem-IL) • John Garamendi (CA) • Jim Himes (New Dem-CT) • Hank Johnson (GA) (says he voted YES by mistake... oops) • Derek Kilmer (New Dem-WA) • Ron Kind (New Dem-WI) • Rick Larsen (New Dem-WA) • Dan Lipinski (Blue Dog-IL) • Dave Loebsack (IA) • Sean Patrick Maloney (New Dem-NY) • Patrick Murphy (New Dem-FL) • Scott Peters (New Dem-CA) • Colin Peterson (Blue Dog-MN) • Jared Polis (New Dem-CO) • Mike Quigley (New Dem-IL) • Raul Ruiz (CA) • Bobby Rush (IL) • Kurt Schrader (Blue Dog-OR) • David Scott (Blue Dog-GA) • Terri Sewell (New Dem-AL) • Kyrsten Sinema (Blue Dog-AZ) • Albio Sires (NJ)
Simon Johnson wrote yesterday after the vote about how the Republicans have a strategy of repealing Dodd-Frank for their Wall Street donors. "House Republicans," he wrote, "put their cards on the table with regard to the 2010 Dodd-Frank financial reforms. The Republicans will chip away along all possible dimensions, using a combination of legislation and pressure on regulators-- with the ultimate goal of relaxing the restrictions that have been placed on the activities of very large banks (such as Citigroup and JP Morgan Chase)... The House Republican rhetoric will be 'technical fixes' and 'job creation.' But the reality is that they are determined to strip away all meaningful restrictions imposed on Citigroup, JP Morgan Chase, and other megabanks-- and to roll-back Dodd-Frank as far as possible, until it becomes meaningless or they are finally able to repeal it completely." He neglected to mention that the Republicans have a sizable contingent of Blue Dogs and New Dems working just as hard towards the same goals. Putative Democrats like Kyrsten Sinema (currently being courted by the DSCC to run for the U.S. Senate), Jim Himes, Patrick Murphy, John Delaney, Scott Peters, Henry Cuellar, Sean Patrick Maloney... are at least just as bad and just as eager to ingratiate themselves with the banksters as the Republicans are.
When Warren talked about bad Democrats who undercut working families, that list above is who she's talking about, at least on the House side. Ellison, who led the successful floor fight today for Pelosi, was elated. "Families are only now starting to recover from the devastating financial crisis. Congress must strengthen and fully enforce the Dodd-Frank Wall Street Reform Act. Republicans are starting the 114th Congress by fast-tracking bills to help mega banks and slow-walking legislation to support working Americans. Under the leadership of Ranking Member Maxine Waters and Leader Nancy Pelosi, Democrats will continue to stand on the side of America’s working families." Here's his floor speech:
Volcker Rule: Each Ending Is A New Beginning For Banksters And Their Lobbyists
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As we mentioned Monday, all but one Republican (Walter Jones) voted to exempt private equity fund investment advisers from regulatory registration and reporting requirements. They were joined by 36 Democrats led by Wall Street whores Steve Israel ("ex"-Blue Dog-$800,019) and Jim Himes (New Dem-$1,853,26). Ever since Boehner became Speaker, whittling away at Dodd-Frank has been top priority-- and he knows there are always a couple dozen corrupt Democrats to tag along for the goodies. Conservatives hate the Volcker Rule banning high-risk bank trades but it was something Boehner, the GOP and the ConservaDems weren't able to stop on Tuesday. The Fed and the FDIC (Federal Deposit Insurance Corp) each voted unanimously under guidelines set by Congress before Boehner took over. Oregon Senator Jeff Merkely was one of the most outspoken and effective advocates of the rule and his office released this statement by him and Carl Levin, a cosponsor of the provision during the crafting of Dodd-Frank:
“We fought for the Merkley-Levin provision of the Dodd-Frank Act in order to put a strong firewall between banks and hedge fund-style high-risk trading. Today is a big step toward that goal. We are still reviewing the details of the final rule, but early indications suggest that persistence and common sense can prevail in the face of even the fiercest special interest lobbying campaigns: hedging looks tougher, market-making looks simpler, trader compensation remains appropriately structured, and CEOs are required to set the tone at the top. No regulation is ever perfect, and we will carefully monitor implementation and hold regulators and firms accountable. If problems emerge-- for whatever reason-- we will quickly press regulators to address them. Overall, though, the final rule looks improved over the proposal from two years earlier. “The Merkley-Levin Amendment was intended to change the culture and practices at our nation’s largest financial firms, to prevent Wall Street and the big banks from making swing-for-the-fences bets that put depositors and taxpayers at risk. The regulators have taken a serious step forward in mandating critical changes.” Hedge-fund style proprietary trading at our nation’s largest financial firms was a high-risk, conflict-ridden activity that played a central role in the 2008 financial crisis. Banks should be in the business of serving customers-- including taking deposits from and making loans to ordinary families and businesses. Speculative investing should be left to hedge funds, private equity funds, and other private investors that, if they get in trouble, won’t imperil the lending so critical to our economic growth. The Volcker Rule firewall, as embodied in the Merkley-Levin Amendment to Dodd-Frank: • Bars our lending banks and their affiliates and subsidiaries from engaging in the speculative, conflict-ridden activities of making bets on the stock, bond, derivatives, and other markets and limits those activities at systemically important nonbank financial institutions; • Allows for customer-oriented services, such as underwriting and market-making to facilitate capital formation for clients, risk-mitigating hedging activities to permit safe and sound operations, and fund management services for customers.
Wall Street is not happy. They fought the Volcker Rule at every opportunity and spent millions bribing (legalistically bribing, I guess) Members of Congress to kill it. It didn't work and they and their allies are fuming this week
Regulators' tough stance heralds a new era and new approach for financial markets, CLSA banking analyst Mike Mayo said. "The big picture is that this ushers in an era of Big Brother banking," with regulators closely monitoring details of top banks' risk-taking, Mayo said. "Big Brother was asleep on the couch before the financial crisis."
The new policy reflects Congress' decision that the banking system needed to be "de-risked, de-leveraged and to deliver more consistent financial results," he said. As part of the same overall effort, bank regulators are boosting capital requirements for banks internationally. …The biggest arguments recently have been about how much trading should be allowed to hedge positions, especially since banks typically have more deposits on hand than they have loans outstanding, with the rest of their assets usually invested in the markets. They also typically own securities as part of legal activities such as executing client trades and making markets, he said. Liberal-leaning groups such as Better Markets have lobbied for the toughest version of the rule possible, arguing in a Nov. 21 letter to the agencies that allowing too much trading to let banks hedge risks will allow proprietary trading via loopholes. They pointed to JPMorgan Chase's $6 billion-plus loss in the "London Whale" derivatives trade as evidence that trading that banks say is simply a hedge can pose risks to the system. New rules would hurt access to credit far less than another crisis, they said. "Wall Street and its lawyers are in the loophole creation-and-exploitation business," Better Markets' Dennis Kelleher said. "For 100 years, banks have made the same complaints about every regulation. They said it during the Depression, and we grew the biggest middle class in the history of the world."
President Obama's statement:
Five years ago, a financial catastrophe on Wall Street was rapidly fueling a punishing recession on Main Street that ultimately cost millions of jobs and hurt families across the country. So as we prepared steps to rescue our economy and put Americans back to work, we also put in place tough rules of the road to make sure a crisis like that never happened again-- rules that reward sound financial practices, allow honest innovation and strengthen the financial system’s ability to support job creation and durable economic growth. As part of this Wall Street reform, we fought to include the Volcker Rule-- a rule that makes sure big banks can’t make risky bets with their customer’s deposits. The Volcker Rule will make it illegal for firms to use government-insured money to make speculative bets that threaten the entire financial system, and demand a new era of accountability from CEOs who must sign off on their firm’s practices. Our financial system will be safer and the American people are more secure because we fought to include this protection in the law. I thank Paul Volcker, a former Chairman of the Federal Reserve and advisor I trust, for helping to create this important safeguard. I also thank Secretary Lew and the regulators who worked diligently to finalize the rule by the end of this year as we called on them to do. I encourage Congress to give these regulators adequate funding to effectively and efficiently implement the rule, which will help protect hardworking families and business owners from future crisis, and restore everyone’s certainty and confidence in America’s dynamic financial system.
One of the biggest Wall Street whores in Congress is New Jersey extremist Scott Garrett, Wall Street's fully-owned Republican on the House Financial Services Committee. While sitting on the committee, he's taken a tidy $1,235,537 in bribes from the financial services industry. So far this year, he's the 4th biggest recipient of bribes from securities and investment area, beaten out only by Boehner, Cantor and Tom Cotten (R-AR), another corrupt member of the Financial Services Committee and a candidate for the U.S. Senate. He ran right to Fox Tuesday to whine about the rule:
The Ruling Elites Bought Themselves A Cycle And Now They Want To Squeeze All They Can Out Of Their Investment
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Mark Kirk isn't a teabagger. They don't even like him. He's a relatively refined and mainstream kind of guy... in a conservative kind of way. And he's gay, although afraid to admit it publicly and tightly locked in the closet. And, unlike the neanderthals, who Michael Bloomberg was wailing about in yesterday's Wall Street Journal, Mark Kirk certainly does know how to read and does know where China is. He even crossed the aisle to vote with the Democrats late in September when they passed a bill opposing Chinese currency manipulation-- and against Boehner, Cantor, Dreier, Ryan and the rest of the Republican House leadership. Bloomberg, who fancies himself the anti-Teabag independent and reasonable moderate who should be president, endorsed Kirk last month and has a history of contributing to his campaigns going back to Kirk's first (unsuccessful) try for the Senate.
Visiting China this week, Bloomberg, NYC's globalist, multinational mayor, growled about congressional attempts to prevent China from illegally dumping solar panels into the American market with the express purpose of driving U.S. firms out of business. “If you look at the U.S., you look at who we’re electing to Congress, to the Senate-- they can’t read,” he said. “I’ll bet you a bunch of these people don’t have passports. We’re about to start a trade war with China if we’re not careful here,” he warned, “only because nobody knows where China is. Nobody knows what China is.” Former Rep. Robert Wexler, then a member of the House Foreign Relations Committee, made the same observation in his book, Fire Breathing Liberal, about Know Nothing members of Congress, including members of his committee, for whom not having a passport-- or even eating "foreign" food-- was a badge of honor. Wexler endorsed Charlie Crist for the open Florida Senate seat and Crist lost to one of the bunch of Know Nothings Bloomberg was whining about, Marco Rubio, who's waltzing into the Senate-- and, many fear, the national stage-- after a 49% win, Crist and Kendrick Meek splitting the non-teabaggy vote.
Bloomberg's push to make the GOP more mainstream saw him endorsing Michael Castle in Delaware, who famously lost the Republican nomination to a former witch and anti-masturbation candidate, and Mark Kirk in Illinois. His Illinois candidate, Mr. Kirk, won, thereby helping to empower the provincial Know Nothings like Rubio, Ron Johnson (WI), Mike Lee (UT), Richard Burr (NC), Pat Toomey (PA) and Jim DeMint (SC). Bloomberg is no teabagger; he really is an enlightened mainstreamish kind of conservative. He's pro-choice, pro-gay... But, when push comes to shove, he a billionaire corporatist, one of them, not one of us. Robert Reich's blog yesterday dealt with America's two economies and why one is recovering and the other isn't. Bloomberg's-- the Big Money economy "comprised of Wall Street traders, big investors, and top professionals and corporate executives"-- is just fine, thanks to Bernanke's zero interest rate policies and money-printing mania: free money, as Patti Smith sang, but not for us; for them.
Free money can almost always be put to uses that create more of it. Big corporations are buying back their shares of stock, thereby boosting corporate earnings. They’re merging and acquiring other companies.
And they’re going abroad in search of customers.
Thanks to fast-growing China, India, and Brazil, giant American corporations are racking up sales. They’re selling Asian and Latin American consumers everything from cars and cell phones to fancy Internet software and iPads. Forty percent of the S&P 500 biggest corporations are now doing more than 60 percent of their business abroad. And America’s biggest investors are also going abroad to get a nice return on their money.
So don’t worry about America’s Big Money economy. According to a Wall Street Journal survey released Thursday, overall compensation in financial services will rise 5 percent this year, and employees in some businesses like asset management will get increases of 15 percent.
The Dow Jones Industrial Average is back to where it was before the Lehman bankruptcy filing triggered the financial collapse. And profits at America’s largest corporations are heading upward.
But there’s another American economy, and it’s not on the mend. Call it the Average Worker economy.
Last Friday’s jobs report showed 159,000 new private-sector jobs in October. That’s better than previous months. But 125,000 net new jobs are needed just to keep up with the growth of the American labor force. So another way of expressing what happened to jobs in October is to say 24,000 were added over what we need just to stay even.
Yet the American economy has lost 15 million jobs since the start of the Great Recession. And if you add in the growth of the labor force-- including everyone too discouraged to look for a job-- we’re down about 22 million.
Or to put it another way, we’re still getting nowhere on jobs.
One out of eight breadwinners is still out of work. Most families in the Average Worker economy rely on two breadwinners. So if one out of eight isn’t working, chances are high that family incomes are down compared to what they were three years ago.
And that means the bills aren’t getting paid.
According to a recent Washington Post poll, more than half of all Americans-- 53 percent-- are worried about making their mortgage payments. This is many more than were worried two years ago, when the Great Recession hit bottom. Then, 37 percent expressed worry.
Delinquency rates on home loans are rising. Distressed sales are up as a percent of total sales. Most people in the Average Worker economy own few shares of stock, if any. Their equity is in their homes. But with all the delinquencies and distressed sales, the housing market has a glut of homes for sale. As a result, home prices are still dropping. So the net worth of most Americans is still dropping.
And even though interest rates are falling, most people in the Average Worker economy can’t refinance their homes. They can’t get home equity loans. Banks don’t want to lend to the Average Worker economy because people in it are considered bad credit risks. They still owe lots of money, their family incomes are down, and their net worth has fallen.
And according to the Reuters/University of Michigan survey of American consumers, expectations about personal finances are at an all time low.
Inhabitants of the Big Money economy are celebrating Republican wins last week. They figure financial regulations will be rolled back, environmental regulations will be canned, the Bush tax cut will be extended to the top 1 percent, and it will be harder for workers to form unions.
Inhabitants of the Average Worker economy aren’t so sure. The economy has been so bad they’re angry at politicians. They showed their anger at the ballot box. They took it out on incumbents. But if nothing changes in the Average Worker economy, there will be hell to pay.
If a modern day Madame DeFarge happens to come across this blog, allow me to point cher Thérèse in the direction of Alabama Republican Spencer Bachus, who will replace Barney Frank as the chairman of the House Financial Services Committee in Janvier. Bachus plans to use his committee to attempt to roll back-- or at least cripple-- the Wall Street reforms that passed last year. He owes them that... at least. The next chairman has raised $6.1 million from the finance, insurance, and real estate sector, with more than $1.1 coming in this election cycle alone. Over his career, Bachus has pulled in $1.2 million from commercial banking donors, and another $1.1 million from those representing the securities and investment industry. And you know what... he's not waiting 'til January to get busy paying back the Big Money economy Reich was talking about above.
The corrupt Alabama Wall Street shill, who claims the Volcker Rule, meant to curtail dangerous gambling and expansionist proclivities of barely regulated banks, insists, rather speciously, that it actually curtails job creation. He sent a letter to Geithner, who agrees with him anyway, about not enforcing it. But on Friday the two senators who wrote the provisions, Jeff Merkley (D-OR) and Carl Levin (D-MI), sent a letter of their own. And theirs', unlike Bachus', instructed regulators to follow the law. Merkeley's office pointed out in a press release to Oregon media that "despite recent comments from some who opposed reform of the high-risk trading that contributed to the collapse of the American financial system, strong regulations are essential to preventing future boom and bust cycles that jeopardize the financial stability of American families."
“Now that Congress has passed and the President has signed into law the strongest protections for our financial system in 75 years, we look to you to follow the statutory intent to eliminate high risk and conflict-ridden activities at banks, and limit them at systemically significant non-bank financial firms,” the senators wrote.
“The Merkley-Levin provisions on proprietary trading and conflicts of interest, often called the Volcker Rule, offer key measures to address these issues. The Financial Stability Oversight Council (FSOC) study will hopefully recommend vigorous enforcement of them and provide guidance to agencies on how to ensure their effective implementation. Financial firms must not be allowed to rely on implicit or explicit government support, through access to the Federal Reserve discount window, FDIC deposit insurance, or other taxpayer- financed mechanisms, to place bets where heads they win, tails taxpayers lose.”
In closing, I'd like to recommend an interview by Jan Frel with historian Lawrence Goodwyn, author of The Populist Movement, a condensed version of his harder to find Democratic Promise. Right at the outset, he tells Frel that he "underestimated the capacity for sheer greed that drives American banking. The evidence is compelling that a great many people within the financial community acknowledge no limits because they have a seriously atrophied loyalty to American society as a whole. I speak here of the cornerstone of the American democratic experiment itself: the sense that a majority of us have had-- have always had-- that we are in this thing together. Bankers are not with the rest of us on this. Perhaps they never have been. All exceptions freely conceded, but the general reality still holds: they are killing the promise of this republic." That certainly validates my own experience with that... sector.
The sequence of events is not debatable: 1) In 2001 Republicans inherited Clinton's hard-earned "balanced budget." 2) They immediately moved to dismantle it by generating a trillion-dollar tax cut for the rich. No more balance in the budget. 3) The GOP then added in a war against the threat of Saddam Hussein's "weapons of mass destruction" that did not exist because the "evidence" concocted by Dick Cheney was fraudulent. Another trillion more or less. 4) En route, they tossed in a prescription drug benefit that added more trillions, conceivably forever-- or until we get the public option, whichever comes first. 5) An additional inheritance from Clinton was the culmination of the relentless conservative-championed campaign for "financial deregulation" sanctioned by Alan Greenspan, the old Fed chairman, and buttressed by the Milton Friedman-inspired balderdash trumpeting the emergence of a "rational market." (For reasons that have always escaped me, the latter piece of puffery found a home in the American economics profession.) 6) As a sendoff for his final days, Bush's Secretary of Treasury and his Federal Reserve Chairman found themselves saddled with the inevitable post-regulation financial crisis that (inconveniently enough) could no longer be postponed until after the 2008 election. The $800 billion or so embedded in the Toxic Assets Relief Program was the result.
...Over the past 30 years, the percentage of the national wealth held by the top 1 percent of the population has gone from 9 percent in 1976 to 28.9 percent in 2007. Quite soon this pampered one percent, heavily concentrated in the financial sector, will own one-third of all the wealth in the country. They do especially well in times of severe popular stress, whether these depleting moments are called depressions, recessions or downturns. "Bubbles" can also be counted on to afford opportunities for rapacious plunder, though in advanced capitalist countries, housing bubbles have provided especially lucrative terrain. Democracy as we know it cannot survive this maldistribution of the fruits of the labor of the toiling millions whose belief in the country make America what it is.
It gets better and better and I really recommend you read the whole thing, especially if you'd like to know why there's been so little deviation since Obama won in 2008 from the disastrous Bush years "on the key issues of war, empire and the distribution of wealth in the country."
