How Quickly They Forget

Wasn’t it just a few years ago that the U.S. economy was in the toilet?

And wasn’t it clear that it was in the toilet in large part because of the immoral, rapacious, cynical business practices of Wall Street, a collective community that, when left to its own devices, always does the wrong thing because of its unquenchable greed?

And didn’t Congress respond, albeit weakly, with legislation commonly known as Dodd-Frank that regulated credit cards, loans, and mortgages, all of which were abused by financial companies and contributed to the economy’s crash; provided oversight over the financial industry; stopped banks from gambling with their depositors’ money; regulated the complex derivatives that wreaked havoc on the economy; forced hedge funds to stop conducting their business in secret; provided for oversight of the credit rating agencies that gave good credit ratings to failing companies because it was the failing companies that paid their fees; and provided new oversight over insurance companies and their risky and reckless practices.

Dodd-Frank was decent, but not ideal; it was watered down by Republicans (and, to be fair, some Democrats, too) beholden to Wall Street.

But the economy has at least partly recovered, and those same Republicans (and, to be fair, some Democrats, too) beholden to Wall Street now want to water down those Dodd-Frank requirements.

They want to raise the threshold of what constitutes a bank that’s too big to be allowed to fail, apparently because even though Republicans (and, to be fair, some Democrats, too) don’t want government meddling in financial industries, they don’t mind bailing out banks.

They want to ease the mortgage-lending rules even though millions of Americans lost their homes because of deceptive mortgage-lending practices in the past. Ease off how? By once again permitting banks to extend mortgages to people who can’t demonstrate that they’ll be able to pay those mortgages.

They want to permit smaller banks – you know, the ones with the less-skilled staff – to engage in the kind of risky trading that helped cause the financial meltdown in the first place.

So why is the chairman of the Senate Banking Committee proposing all of this?

Does he think the Wall Street and financial industry people got a bum rap for causing the recession?

Does he think the Wall Street and financial industry people have learned their lesson and won’t do those bad things anymore?

Does he think the regulations are no longer needed since the economy’s now returned to some kind of equilibrium?

Or are he and his fellow Republicans (and, to be fair, some Democrats, too) under pressure from their big campaign contributors to remove the handcuffs and free them once again to do anything they can think of to swindle ordinary people out of their last dime?

About that last one: Richard, Shelby, chairman of the Senate Banking Committee and the guy advancing this proposal to dilute Dodd-Frank, raised $6.7 million in campaign contributions between 2009 and 2014 (even though he’s eighty-one years old and has no business running again). Of that $6.7 million, $710,000 came from securities and investment firms; $362,000 from insurers; $279,000 from real estate interests; and $262,000 from finance and credit companies. His biggest corporate sources of contributions? Travelers, Bank of New York Mellon, General Electric (although you know GE mostly for its manufacturing, it makes much of its money from GE Capital, its lending arm), American Express, Fidelity Investments, Morgan Stanley, and Goldman Sachs.

But surely that’s just a coincidence.





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  • Barbara  On May 22, 2015 at 7:22 am

    I don’t know Curmudgeon. I may have to stop reading your blogs. This stuff just makes my blood boil. And, unless the blood boiling is burning calories, my old heart can’t take it. Seriously though, keep on writing. It’s good to expose the crooks, but oh, how I wish there were ways to stop them.

    • foureyedcurmudgeon  On May 22, 2015 at 8:37 am

      Thanks. I often feel bad that I don’t do more pieces like this, and I hope to in the future. Just yesterday, I read a piece in the Philadelphia Business Journal about chamber of commerce types dancing on the electoral grave of Wilson Goode Jr., who lost his bid for a fourth (or is it fifth?) seat on Philadelphia’s city council on Tuesday. I’ve never been much of a fan of Goode, but he was often alone among council members in trying to ensure that businesses that came to Philadelphia to make a lot of money were accountable for their actions and invested in the working people from whom they expected to reap all that money. That kind of voice will be missed, but the business types thought it was just great that they may now be able to move forward with their plans without the inconvenience of needing to become good corporate citizens.

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