CommentsEASTSIDER-All the mainstream media seems to agree that President Trump tweets and talks to give us new bright and shiny objects to obsess about, mostly as a method of taking attention away from what he is really doing.
I say that Trump himself is the ultimate shiny object, taking us on sideshows while Congress and those who actually own the country have their way.
Consider this: All the cable media and TV media spends their entire day talking about what the President tweeted or threatened to do or did. All of them. With all the same news clips. So there is no real news about what our government is actually doing in real time.
May 2018 Dodd-Frank Reform Bill
I’ll bet you didn’t know that in May a major reform bill to the Dodd-Frank law was passed by both houses and signed into law by the President. This bill has an awesomely obfuscating title: The Economic Growth, Regulatory Relief, and Consumer Protection Act (short form “Reform Law”).
In the Senate, this bill passed on a 67-31 vote. In the House, the vote was 258-159. By any standard, this was a bipartisan undertaking. Even as we are being told that there is no such thing as bipartisanship in either house of Congress. And what exactly was in the Bill? Well...
The biggie is that Instead of a $50 billion threshold to trigger enhanced oversight of a big bank, that now goes up to $250 billion!
As the New York Times noted:
“The bill stops far short of unwinding the toughened regulatory regime put in place to prevent the nation’s biggest banks from engaging in risky behavior, but it represents a substantial watering down of Obama-era rules governing a large swath of the banking system. The legislation will leave fewer than 10 big banks in the United States subject to stricter federal oversight, freeing thousands of banks with less than $250 billion in assets from a post-crisis crackdown that they have long complained is too onerous.”
There are also a number of technical but important rollbacks in the legislation, and I urge you to check out the details here in an analysis from Sherman & Sterling.
And Earlier Obama Era Get Out of Jail Action for Banks
Just so everyone understands that “too big to fail” banking is a major bipartisan effort in Congress, no matter what the media reports (or fails to report), here’s a doozy from the Obama Administration era.
Having repealed the Glass-Steagall Act in 1999, which enabled the 2008 housing market crash, Citigroup and JP Morgan had a tame congress critter insert a special provision for them in the 2014 Omnibus Spending Bill. That’s right, the Spending Bill for the entire federal government! As Forbes noted:
“Wall Street banks like Citigroup and JP Morgan Chase have flexed the power of their influence to pressure Congress and the White House into a key change in the law that will allow the trading of risky financial derivatives in bank operations that are insured by the Federal Deposit Insurance Corp.”
Remember, this was the killer issue that meant that you and I wind up on the hook for their reckless behavior that caused the last crash. Groovy.
And Now the Masters of the (Fed) Universe are Back!
As reported from Pam Martens and Russ Martens in Wall Street On Parade, a favorite blog of mine, a September headline read, “Bernanke, Geithner, Paulson: The Fed Should Be Able to Make Secret Trillion Dollar Loans Again.”
That’s right. The three architects of bailing out the banks instead of the suckered homeowners are at it again. As the September 10 article notes:
“Yesterday, as if on cue, the three masterminds of the unprecedented 2007 to 2010 Wall Street bailout that included the funneling of a secret $16.1 trillion in cumulative, almost zero interest rate loans to the miscreant banks of Wall Street and their foreign peers, had the temerity and hubris to whine in a New York Times OpEd that “Congress has taken away some of the tools that were crucial to us during the 2008 panic. It’s time to bring them back.”
It’s a good article and worth a read. f you want to know how totally slimy this whole deal really was, the article continues to say:
“The GAO report notes that the Federal Reserve Bank of New York was tapped to administer most of the Fed’s lending programs while CEOs of some of the largest banks on Wall Street had sat on its Board of Directors for years. As Wall Street On Parade previously reported, Sanford (Sandy) Weill, while Chairman and/or CEO of Citigroup, sat on the New York Fed’s Board as the bank was amassing tens of billions of dollars in toxic off-balance-sheet debt that would eventually blow up in Structured Investment Vehicles (SIVs). The Fed is not allowed to make loans to insolvent institutions and yet the GAO report found that Citigroup was the largest recipient of the Fed’s secret emergency lending programs, receiving a cumulative $2.5 trillion.”
The Takeaway
So you can see why I think that President Trump is himself the bright shiny object designed to keep our eyes focused far, far away from the slimy Congressional lobbying/dealing of Wall Street and the Too Big to Fail Banks.
Personally, I think they know that the current market is going to crater sometime soon, and they have put into place the legislation which will allow them to get away with the crime again. The past three Fed Presidents are simply laying the groundwork for Congress, once again shifting the banking industry losses onto your and my taxpaying backs.
Forget Donald Trump. Ever since the $1 one vote of Citizens United, you and I have been dealt out of the game. After all, unlike us, corporations are immortal, and have bags of money and lobbyists to game the politicians. I think this article indicates how successful they have been and continue to be.
With the watering down of an already toothless replacement for the Glass-Steagall Act, Congress has now put in place most of the legal framework to once again have our government take care of the big banks at the express expense of you and me. Once again, we will foot the bill when it happens.
The “prestige” of the prior Fed Chairs doing op-eds is simply designed to put into place the last brick of the Wall Street Wall -- against us.
Sadly, there is little difference between the two political parties when it comes to the big-bucks financial services industry that put them all in office. At this level, the difference between a Mitch McConnell and a Barney Frank or Chuck Schumer is negligible.
The real solution, and the one nobody in Congress is talking about is to bring back the Glass-Steagall Act. It is not a coincidence that this legislation, formally called, The Banking Act of 1933, was born out of the Great Depression.
For those who are interested, here’s a good article on the Act and how “This 1933 Law Would Have Prevented the Financial Crisis” at TheBalance.com.
Wouldn’t it be nice if we could elect politicians from both parties who would do this, instead of obsessing on the Bright and Shiny Object called President Donald Trump? Consider asking the politicians on this November’s ballot how they voted or would vote on this very real issue.
(Tony Butka is an Eastside community activist, who has served on a neighborhood council, has a background in government and is a contributor to CityWatch.) Edited for CityWatch by Linda Abrams.
