Post by jeffolie on Nov 10, 2010 15:45:01 GMT -6
Banks tamed/co-opted TeaParty
"...Even tea-party rage against Wall Street has now been co-opted so that big bank friends like Spencer Bachus [in line to take over as chairman of the House Financial Services Committee] are back in power...In short, there appears little chance that the Dodd-Frank bill or anything else will break the financial oligarchy "
I predict hate and loathing of the FED/govenment will grow. Political opportunists will use 'screwflation' to campaign for 2012 with Sarah already out front on this issue even though she is just a tool.
================================================================
New Congress will help banks return to business as usual
Commentary: House GOP majority will dilute regulatory reform
WASHINGTON (MarketWatch) -- Republican congressional leaders have made it clear they intend to co-opt and tame their new tea party members. It’s an urgent necessity, because often establishment Republican goals are at odds with tea-party objectives.
Take the big banks that caused the financial crisis. The tea-party movement had its beginnings in public outrage over the bank bailout. But now the Republican majority swept into the House with tea-party help is poised to help those banks gut financial reform and create the next financial crisis.
Spencer Bachus, a longtime Republican congressman from Alabama, is currently the ranking member of the House Financial Services Committee and first in line to take over as chairman in January (though he faces a challenge for that post from Ed Royce of California).
Bachus is not waiting until then, however, to join Wall Street lobbyists in bullying regulators into diluting reforms in the Dodd-Frank act passed earlier this year. And Bachus, who gets most of his campaign donations from corporate PACs according to the Center for Public Integrity, makes no bones as to why.
In a recent letter to regulators, Bachus urges them to throw aside the Volcker Rule calling for banks enjoying federal guarantees to get out of proprietary trading. The reason, according to Bachus, is that they will cut into profits at banks like JP Morgan Chase and Goldman Sachs.
“Shuttering these operations will make these banks less profitable,” Bachus writes. “Ultimately, these losses will hurt the shareholders of those banks that are forced by the Volcker Rule to divest from profitable lines of business.”
Heavens to Betsy! Let’s forget about global financial stability then, lest those poor shareholders should suffer. Let’s also forget the voter rage stoked by favorable treatment to Wall Street.
Bachus is able to defend these beleaguered shareholders because he asserts at the beginning of his letter that proprietary trading was not responsible for the crisis – conveniently ignoring the fact that a chain of speculative credit default swaps exacerbated the underlying subprime mortgage crisis and led to the global collapse of credit.
As Simon Johnson, a professor at MIT and former chief economist at the International Monetary Fund, said in a letter countering the one from Bachus: “The…Volcker Rule, properly defined, would significantly reduce systemic financial risks looking forward. Congressman Bachus’s comment to contrary…is completely at odds with the facts.”
Both letters were among the 1,500-some comment letters submitted to the new Financial Stability Oversight Council regarding how regulators should approach implementation of the Volcker Rule provision in Dodd-Frank. Obviously, a letter from the potential committee chairman who will control funding and oversight of regulatory agencies carries somewhat more weight with these regulators than the comments from a private citizen, even a distinguished economist.
Reps. Spencer Bachus and Ed Royce, contenders for next chairman of House Financial Services Committee
Unfortunately, it probably won’t take much to bully the regulators into watering down financial reform.
Federal Reserve chairman Ben Bernanke, as a banking regulator, was the one who ignored abuses in the mortgage industry and only acted on rampant price-gouging in the credit card industry after Congress latched onto the subject.
The main banking regulator, the Office of the Comptroller of the Currency, has only an acting head now at an agency where former Comptroller John Dugan did everything in his power to shield the big banks from regulation. Mary Schapiro has after nearly two years failed to demonstrate that she will make the Securities and Exchange Commission a more effective regulator.
Plus, there is always Treasury Secretary Timothy Geithner, ex-officio chairman of the FSOC, who misses no opportunity to sabotage regulatory reform.
After reportedly blocking the outright appointment of Elizabeth Warren to the Consumer Finance Protection Agency, Geithner’s Treasury Department may well be behind the buzz that Rep. Melissa Bean of Illinois, apparently known as “Wall Street’s favorite Democrat,” will be named head of the new agency if the final election tally shows her losing her seat in Congress. The administration has yet to nominate a permanent director at OCC, even though Dugan vacated the job in mid-August.
In short, there appears little chance that the Dodd-Frank bill or anything else will break the financial oligarchy that, as economist Johnson noted in an article last year in The Atlantic, has effectively captured our government. Even tea-party rage against Wall Street has now been co-opted so that big bank friends like Spencer Bachus are back in power.
www.marketwatch.com/story/gop-will-help-banks-return-to-business-as-usual-2010-11-10
"...Even tea-party rage against Wall Street has now been co-opted so that big bank friends like Spencer Bachus [in line to take over as chairman of the House Financial Services Committee] are back in power...In short, there appears little chance that the Dodd-Frank bill or anything else will break the financial oligarchy "
I predict hate and loathing of the FED/govenment will grow. Political opportunists will use 'screwflation' to campaign for 2012 with Sarah already out front on this issue even though she is just a tool.
================================================================
New Congress will help banks return to business as usual
Commentary: House GOP majority will dilute regulatory reform
WASHINGTON (MarketWatch) -- Republican congressional leaders have made it clear they intend to co-opt and tame their new tea party members. It’s an urgent necessity, because often establishment Republican goals are at odds with tea-party objectives.
Take the big banks that caused the financial crisis. The tea-party movement had its beginnings in public outrage over the bank bailout. But now the Republican majority swept into the House with tea-party help is poised to help those banks gut financial reform and create the next financial crisis.
Spencer Bachus, a longtime Republican congressman from Alabama, is currently the ranking member of the House Financial Services Committee and first in line to take over as chairman in January (though he faces a challenge for that post from Ed Royce of California).
Bachus is not waiting until then, however, to join Wall Street lobbyists in bullying regulators into diluting reforms in the Dodd-Frank act passed earlier this year. And Bachus, who gets most of his campaign donations from corporate PACs according to the Center for Public Integrity, makes no bones as to why.
In a recent letter to regulators, Bachus urges them to throw aside the Volcker Rule calling for banks enjoying federal guarantees to get out of proprietary trading. The reason, according to Bachus, is that they will cut into profits at banks like JP Morgan Chase and Goldman Sachs.
“Shuttering these operations will make these banks less profitable,” Bachus writes. “Ultimately, these losses will hurt the shareholders of those banks that are forced by the Volcker Rule to divest from profitable lines of business.”
Heavens to Betsy! Let’s forget about global financial stability then, lest those poor shareholders should suffer. Let’s also forget the voter rage stoked by favorable treatment to Wall Street.
Bachus is able to defend these beleaguered shareholders because he asserts at the beginning of his letter that proprietary trading was not responsible for the crisis – conveniently ignoring the fact that a chain of speculative credit default swaps exacerbated the underlying subprime mortgage crisis and led to the global collapse of credit.
As Simon Johnson, a professor at MIT and former chief economist at the International Monetary Fund, said in a letter countering the one from Bachus: “The…Volcker Rule, properly defined, would significantly reduce systemic financial risks looking forward. Congressman Bachus’s comment to contrary…is completely at odds with the facts.”
Both letters were among the 1,500-some comment letters submitted to the new Financial Stability Oversight Council regarding how regulators should approach implementation of the Volcker Rule provision in Dodd-Frank. Obviously, a letter from the potential committee chairman who will control funding and oversight of regulatory agencies carries somewhat more weight with these regulators than the comments from a private citizen, even a distinguished economist.
Reps. Spencer Bachus and Ed Royce, contenders for next chairman of House Financial Services Committee
Unfortunately, it probably won’t take much to bully the regulators into watering down financial reform.
Federal Reserve chairman Ben Bernanke, as a banking regulator, was the one who ignored abuses in the mortgage industry and only acted on rampant price-gouging in the credit card industry after Congress latched onto the subject.
The main banking regulator, the Office of the Comptroller of the Currency, has only an acting head now at an agency where former Comptroller John Dugan did everything in his power to shield the big banks from regulation. Mary Schapiro has after nearly two years failed to demonstrate that she will make the Securities and Exchange Commission a more effective regulator.
Plus, there is always Treasury Secretary Timothy Geithner, ex-officio chairman of the FSOC, who misses no opportunity to sabotage regulatory reform.
After reportedly blocking the outright appointment of Elizabeth Warren to the Consumer Finance Protection Agency, Geithner’s Treasury Department may well be behind the buzz that Rep. Melissa Bean of Illinois, apparently known as “Wall Street’s favorite Democrat,” will be named head of the new agency if the final election tally shows her losing her seat in Congress. The administration has yet to nominate a permanent director at OCC, even though Dugan vacated the job in mid-August.
In short, there appears little chance that the Dodd-Frank bill or anything else will break the financial oligarchy that, as economist Johnson noted in an article last year in The Atlantic, has effectively captured our government. Even tea-party rage against Wall Street has now been co-opted so that big bank friends like Spencer Bachus are back in power.
www.marketwatch.com/story/gop-will-help-banks-return-to-business-as-usual-2010-11-10