The GOP has always been the Party of rich people and Big Business. It has been for decades and yesterday and today they proved their bona fides by voting for Wall Street over Main Street. The Party which repealed Glass-Steagall and refused to regulate Wall Street’s giant gambles with derivatives and other exotic financial instruments meant to poison the financial sector with toxic assets they then allowed these huge bankers unfettered opportunities to bet against their own handiwork and profit yet again. The Republican ideology of pure free markets and laissez faire resulted in the worst global economic meltdown since the Great Depression. Only immediate action by Presidents Bush (TARP) and Obama (ARRA) saved us from another Great Depression.
This week the Senate is attempting to enact a decent bill aimed at reforming the markets. Though not as strong as I’d hoped it has been crafted over more than a year and includes some significant features:
· End Taxpayer Bailouts. As long as giant financial firms believe the government will bail them out if they get into trouble, they only have the incentive to get larger and take bigger risks. This bill guarantees that taxpayers will never again be forced to bail out reckless Wall Street firms by creating a safe orderly liquidation mechanism for the FDIC to unwind failing significant financial companies; shareholders and unsecured creditors will bear losses; and management will be removed.
· End “Too Big To Fail.” The bill provides for strict new capital, leverage, liquidity, risk management and other requirements as companies grow in size and complexity, with significant requirements on companies that pose risks to the financial system. The Federal Reserve will be authorized, as a last resort, to require a large complex company, to divest some of its holdings if it poses a grave threat to the financial stability of the United States.
· Put a New Cop on The Beat. The bill establishes the Financial Stability Oversight Council to focus on identifying, monitoring and addressing systemic risks posed by large, complex financial firms as well as products and activities that spread risk across firms.
· Bring Sunlight and Transparency to Shadowy Markets. The legislation eliminates loopholes that allow risky and abusive practices to go unnoticed and unregulated – including loopholes for over-the-counter derivatives, asset-backed securities, hedge funds, mortgage brokers and payday lenders.
· Guarantee Clear Information in Plain English. The bill creates the Consumer Financial Protection Bureau, which will have the sole job of protecting American consumers from unfair, deceptive and abusive financial products and practices and will ensure people get the clear information they need on loans and other financial products from credit card companies, mortgage brokers, banks and others.
· Protect Against Bernie Madoff-Type Scams. The SEC has failed to perform aggressive oversight and is unable to understand some of the very companies it is supposed to regulate. This bill creates a program within the SEC to encourage people to report securities violations and mandates an annual assessment of the SEC’s internal supervisory controls. The bill also establishes a new Office of Credit Rating Agencies at the SEC to strengthen regulation of credit rating agencies, many of which failed in the past to warn people about risks hidden throughout layers of complex structures.
Every single Republican Senator voted against this bill and they were joined by Democrat Ben Nelson who is again trying to extort the American people into helping his state above all others. Nelson may now be the biggest whore on the planet. Unfortunately it is the American people he is screwing. The financial sector has been pouring cash into Republican coffers and have flooded Washington with lobbyists. There are now five lobbyists for every Member of Congress.
We know what side Republicans are on and Sen. Bob Casey reminds us in case we’ve forgotten: