Remember that little worldwide financial meltdown from a couple years ago? It made a few local papers. Those who recall that soundbite of a story may also remember exactly what caused it: repeal of the Glass-Steagal act forbidding banks to gamble on high-risk stocks and derivatives using public money. Because that’s what caused the recession. Now, because of a last-minute proviso sneaked into this year’s spending bill (passed just three hours before the deadline), guess what banks are allowed to do again.
ewThat’s right…gamble on stock derivatives using public money! The bill, written entirely by Wall Street’s Citigroup Bank, effectively repeals the “push-out” rule in the 2010 Dodd-Frank financial reform act. This rule, in every sense the lynchpin of the act, has kept Federally insured Wall Street banks from doing exactly what they did to cause the last global recession.
Banks have been spending millions trying to get the push-out rule eviscerated since it was passed. The bill destroying that rule passed the Republican House in October of last year, but has been dead in the water in the Democratically controlled senate. But yesterday, The Citigroup Amendment was sneaked into this year’s last-minute government funding bill, blitzing through the House Financial Services Committee by a vote of 53-6. Which, not coincidentally, is also the exact ratio of Republicans to Democrats on that committee.
But Democrats certainly don’t have clean hands here. The reintroduction of the Citigroup Bill was sponsored by two democrats, and got 70 democrat votes when it initially passed the House last year. And it would have been more, if not for the fact that the bill’s authorship had already been exposed.
And how much of the bill WAS directly written by Citigroup Bank executives? More than 70 out of its 100 or so lines were taken verbatim — as in, completely cop-and-pasted — from Citigroup’s “model” legislation:
In no uncertain terms, this blatant act of cronyism and corruption was done to benefit five entities, and five only: Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America and Wells Fargo. The charter members of America’s Too Big to Fail Club, which was solely responsible for the biggest American financial collapse since the Great Depression. Bigger, in fact, when you look at said recession’s global impact; on a global scale, two World Wars barely compare to the economic damage done by these five banks in less than a decade of Wall Street derivatives trading.
Obama for his part was against the Citigroup Bill when it was initially introduced, and remains so. But he’s expected to sign the budget anyway, because it fully funds everything else.
Of course, some might see this as a bit of standard political horse-trading; you give me this thing, I’ll give you that thing. You let our guys control 90 percent of a $700 trillion Wall Street market, and use public funds to cause another worldwide recession, and we’ll…allow the government to function. But considering what is now once again at risk of happening, and the fact that this bill was sneaked into the government spending bill at the 11th hour (when there were no hopes of drafting a new copy before another shutdown), it’s pretty clear what this is. It isn’t horse-trading; it’s signing over the farm — at gunpoint — to pay the electric bill.
Or, business as usual on Wall Street.
Many are utterly outraged by this betrayal, and that outrage easily crosses party lines. As many things as left and right voting base disagree on, we do share a mutually passionate hatred for Wall Street banks. As loathe as they might be to agree with we evil progressives, there will undoubtedly be massive blowback against Republicans by their own voting base for this one. Count on it: there will be Hell to pay on GOP message boards this day. But we’ll let them eat their own.
In the meantime, one of our own has again shown her teeth, and taken one nasty bite out of both Republicans and Democrats alike for passing this atrocity. Of course, none other than Elizabeth Warren…who’s looking more and more presidential by the day. And she asks a very presidential question of her (for the moment) colleagues in Congress:
“Who are you guys working for anyway?”
“To Republican leaders in the House, I would ask this: You say you’re against bailouts on Wall Street. I’ve heard you say it again and again for five years. So why in the world are you spending your time and your energy fighting for a provision written by Citigroup lobbyists that would increase the chance of future bailouts.Why in the last minute as you head out the door and a spending bill must be passed are you making it a priority to do Wall Street’s bidding.
Who do you work for—Wall Street or the American people?”