Class Warfare Blog

March 6, 2017

GOP Plans to Repeal Dodd-Frank Legislation

Why do we need legislation that prevents big banks from undermining the whole world’s economy with overly risky investments? We can trust them. They are our friends.

Granted the Dodd-Frank legislation didn’t go nearly far enough (millions of dollars per day were spent lobbying against the law in the first place and weakening it and then against its implementation after it was passed). The Glass-Steagall law should have been re-enacted verbatim, plus a whole lot more, but “burdensome regulation” is undermining progress in this country (whine, whine, sniff). This is why the big banks circumvented the existing regulations, corrupted regulators, and invented unregulated shadow banking in the first place.

We will only be free when big banks can wreak havoc as much as they desire … and, of course, our government bails them out every 6-8 years when it all crashes into ruin. Heck, the last time only cost us $2,000,000,000,000 (yes, that is two trillion dollars plus or minus a few billion or so) plus several trillion more in lost property values, but that only affected ordinary citizens (they got no bailout, don’t you know).

At this point, I am starting to root for the GOP’s bad ideas. The party has so desperately wanted to do all of these things for years! And they are going to own the repercussions of each and every one of them.

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July 9, 2016

Why Are Bankers Rich?

The title should probably be “why do we expect banker’s to be rich?” but brevity is something I am working on.

When I was a youngin’ my communities bankers were, well, prominent people. Financially, they were well-to-do, we would say. Were they rich? No, nobody thought that. You see, community bankers are technicians: they work the levers of systems designed by other people. They were paid well, because they had the opportunity to steal a great deal of money, so getting a really well paying job was a disincentive to robbing the bank through embezzlement. Then the banks figured out how to include computerized checks and barriers to prevent such things, they ceased to have marble edifices and brass accoutrements and older people in charge (I do not recall seeing a young banker as a youth, they were all old men, conveying a sense of stability and gravitas.) and then banks and savings and loan institutions all of a sudden had much younger people in charge, of course on much smaller salaries. But then we got our “banks” putting up Halloween decorations and the like, much more festive.

So, today community bankers aren’t expected to be rich … they are just technicians.

But investment bankers, now they were expected to be rich. When I was young, an investment banker invested funds from a pool they collected and to make sure they didn’t embezzle money, they had to make a sizeable contribution to the investment pool. They were gambling their own money as well as their partners and interested investors. This was a rich person’s game. And if an investment banker wasn’t rich or getting rich they were a walking billboard screaming “Failure!” because the lucrative investments they were supposed to be making were not all that good, apparently.

There were just a few investment bankers, ever since the great Depression made sure that the funds in community banks were not to be mingled with the funds in investment banks (hint: the Glass-Steagall Act of 1933). Well, a gift from Bill Clinton and the other neoconservatives in the Democratic Party (we starting to agree with the arch conservatives who call the party the Democrat Party, because it doesn’t seem very democratic) was the repeal of Glass-Steagall because, well, according to the then economic geniuses, we were all grown up and didn’t need the training wheels anymore. (Why is it that economists have a track record that makes weathermen look as accurate as sharpshooters and we pay any attention to them at all?)

Just about a decade after the repeal of Glass-Steagall, we got the Great Recession, courtesy of that repeal. And the perpetrators of the Two Trillion Dollar Debacle got away scot free (shush, politically correct people, the term has nothing to do with Scots or Scotland; look it up)! Not a one went to jail. In the savings and loan crisis in the 1980s, 3,000+ bankers were prosecuted and 10% went to jail. This time, not a one because, you see, bankers are supposed to be rich.

Rich bankers make political contributions and we can’t afford to offend them, because, well, they are rich.

Like the Black man in Dallas who decided it was time to even the score with the police (deplorable, yet understandable), I wonder when it is that people are going to decide there are too many rich bankers and it is time to cull the herd.

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