And Now, Celebrating the Plutocracy

Andy Borowitz said it best: Greed alone is destructive but greed combined with idiocy is catastrophic.

Which brings me to this recent report in the Indianapolis Business Journal.

A House panel on Thursday approved Republican-written legislation that would gut much of the Dodd-Frank law enacted by Democrats and signed by Obama in the wake of the financial crisis and the Great Recession. The party-line vote in the Republican-led House Financial Services Committee was 34-26.

House Republicans based their desire to repeal Dodd-Frank on the “costs of compliance.”

Evidently, they aren’t worried about the economic or human costs of the rampant financial misbehaviors that Dodd-Frank was enacted to control.

President Donald Trump has denounced Dodd-Frank with his usual “eloquence” (cough, cough), promising that his administration would “do a big number” on it. (I think that’s what’s called “thug speak”…)

Vox has also reported on a number of GOP efforts to once-again deregulate Wall Street; it details a bill that “would do more to deregulate the banking industry than any single piece of legislation in a generation.”

Because that worked out so well….

Republicans on the House Finance Committee have hammered away at a mammoth 593-page bill called the Financial Choice Act that the bulk of the GOP caucus is expected to get behind. The committee already moved the bill to the “markup” phase on Wednesday.

“I think this has a very good chance of passing. There are a lot of Democrats who are going to be supporting this,” Sen. Jim Inhofe (R-OK) said in an interview. “Even Democrats have bankers in their districts.”

Of course, Inhofe seems overly optimistic. Congressional Democrats are expected to march in lockstep against the banking bill, which would make it difficult for Republicans to get the 60 votes they’d need to get the Choice Act through the Senate.

Financial experts have called the measure radical.  It eliminates most of the banking oversight passed during the Obama administration, but it goes much further, “rolling back oversight in a way that could dramatically exacerbate the likelihood of another financial crisis, according to experts in financial regulation.”

The Choice Act would also gut the Consumer Finance Protection Bureau, the brainchild of Sen. Elizabeth Warren (D-MA). As Mike Konczal wrote for Vox, the CFPB has won millions from big corporations by suing those who use “deceptive practices” for their customers. Hensarling’s bill wouldn’t get rid of CFPB entirely, but advocates say it would effectively render the agency powerless by letting Congress control its funding, allowing the White House to fire the agency’s director at will, and, perhaps most importantly, stripping it of a broad range of rulemaking authority.

There’s much, much more. The bill would split the Federal Reserve in half and prevent it from coordinating financial regulations and monetary policy; that, according to banking experts, would make bubbles more likely — and more dangerous to the economy.

Borowitz is right. Greed and idiocy are a lethal combination.

22 thoughts on “And Now, Celebrating the Plutocracy

  1. I hope that voters will realize what congress is doing to them and decide to put an end to it. Probably not in Indiana though.

  2. daleb – as long as there is extreme gerrymandering in Indiana and other red states, the Rs have safe seats and they know that. This is why they have become so wreckless with their power to reward Wall street and energy corporations with deregulation. They can’t be voted out of office if the dark money that gave them their office keeps pouring money into their campaigns when they are up for re-election.

  3. House Republicans based their desire to repeal Dodd-Frank on the “costs of compliance.”

    I assume their costs of compliance are the potential of losing their job if they don’t do exactly what Wall street tells them to do. Of course, they must also obey orders if they wnat to be given a lucrative job as a Wall street lobbyist when they do leave office.

  4. What the Republican party will accomplish with this action will be to transfer the “cost of non-compliance” to the American public…to be paid in dollars and cents and the loss of human lives. This will be a non-refundable repeal.

  5. We only have one month until the Fiduciary rule goes into effect. If this bill doesn’t get passed by then, financial advisors all across America won’t be able to bilk grandma out of her life savings. The Republicans are once again using marketing to make it seem to their supporters as if they are doing the country a great favor. They are offering us a CHOICE, just like in health care, you are free to make all of your financial decisions based on your exhaustive research or based on information from your advisor. Since most people don’t know how to do the kind of research and analysis required, that gives a distinct advantage to Wall Street.

    If the last election proved anything it is that Americans don’t want policy discussions. We don’t want to hear in-depth explanations of how a law might affect us. We want to be shown something shiny and told how great America is. What we really need now is a law that will require us to think.

  6. Peggy, what I’m thinking is that “most” people don’t have financial advisors or investments so don’t care about the Fiduciary rule let alone want to understand it. Also, adjustment to Dodd-Frank would be helpful to small, local, independent banks. They are the ones most dramatically and adversely affected by this regulation, so I’ve been told. In the end, all this regulation-gutting, Obama-rules overturning, healthcare replacing-repealing, is to “save” federal dollars to be spent elsewhere (fighter planes and drilling on scared grounds). I don’t think it will be refunded to the taxpayer. But I’m cynical today.

  7. Helen,

    You’re correct about the smaller community banks and the credit unions who’ve been hit hard by the innumerable regulations from Dodd-Frank. Community banks and credit unions played no part in the financial meltdown in 2008.

  8. Nothing is simple anymore. Everything seems to be way out there. And yes greed is an ugly.
    Government hasn’t been about helping the American population for a long time. It’s all about them and not us.
    This need to change!!
    So what can I do to make the change.
    In my mind if we change parties again, what will that do?
    Only to bring someone else’s greed into the picture.

  9. BSH; each type and size of business needs specific allowances AND controls, and often individual businesses within each type require specific wording. This was and is for our protection and protected businesses from frivolous law suits; a two-edged sword.

    I’m thinking of the financial adviser I had in Florida; initially working with my father as he changed his many investments. After he died, I invested in two mutual funds, $20,000 each. This was during the last 18 months of President Clinton’s administration and my two investments increased by approximately $2,000 total. Before the end of Bush’s first 18 months I had lost over $6,000 total. The one mutual fund could not be changed for 7 years; it paid a monthly dividend of approximately $100+ monthly plus the increases added to the original investment amount. That was under Clinton; under Bush, the dividend dwindled to nothing and began charging a monthly fee on my original investment. The financial adviser, an extremely competent businesswoman, was protected from being sued by all clients who invested through her and lost money – thanks to Bush – no incompetence on her part. Dodd-Frank Act, as written though lengthy, appears to me to protect businesses as well as the public; who will Financial Choice Act protect?

    It is another Republican – let’s continue screwing President Obama and the Democratic party along with the American public.

  10. Republican logic has its sweet spot: reducing “government overreach” explains everything.

    The fake news/science missionaries like it be cause it sounds like freedom; everybody gets to do anything they like. It’s an easy sell.

    Politicians like it because it’s sounds humble. “Shucks ma’am I’m unselfishly reducing government just for you”.

    Oligarchs like it as opens up so many looting and plundering options.

    Tax payers like it because it sounds like more opportunity to buy lottery tickets and beer with the money normally paid in taxes.

    Professionals like it because it leads them to setting their own incomes.

    Preachers like it because it opens the door to spreading hate which is currently their best seller.

    In fact the only thing it’s at the expense of is the future.

  11. I worked in financial industry most of my working baby boomer life. I heard from the previous generation how the life savings of people were wiped out during the Great Depression, not only that many lost their jobs.

    Recently I read an article by what I would label an aggressive-ignorant-ideologue about how people who lost their homes during the Bush the Younger recession had only themselves to blame. The expectation of any consumer especially one that is buying a home or another major purchase or an investment is to rely on the honesty and expertise of the Professional. That is you hire that Professional because of their expertise in their chosen field. The Professional could be a realtor, mortgage company, or work for an investment company.

    Rules and regulations are implemented to make certain the consumer and society as whole is protected. Some may look at these rules and regulations as impediments, but the honest businessman is protected, because he or she knows the rules are same for all.

    Baseball has rules and the umpires are expected to enforce the rules. Every batter knows it is three strikes and you are out, when they walk into the batters box. The umpire does not have the discretion to change the rules and give the super star four strikes. What the Republicans want to do here in effect is remove the umpire from the game, or allow the umpire to change the rules for different batters.

  12. There are no good sins–and Greed comes from excessive Pride, and Pride convinces the proud that they are somehow above the law. We have an evil man in the Presidency–IMO–and he needs to be gone.

  13. I have been watching Dodd-Frank’s fate since it was passed in 2010 to correct some of the abuses by Wall Street banks that brought us Bush’s Great Recession. I have also listened to now-retired Barney Frank’s discussion of some of the highlights of such act when possible. Wall Street has spent an incredible amount of money in fighting final regulations that would implement the act and I knew that if we had a Republican president and Congress that we were asking for repeal of the act and the Consumer’s Protection Agency within its parameters and, unfortunately, I am right to have so assumed. Get ready for another spate of credit derivative and bailout downers – guaranteed – and some with our FDIC-guaranteed monies, which Republicans were able to carve out of Dodd-Frank earlier for further use of Wall Street banks. We live in perilous times, most of which is not from afar but from within.

  14. Gerald; I have a few small CDs and a smaller savings account, if the pitiful interest rate drops, I will be the position of paying PNC bank for holding and using my money to invest for their gain…as that mutual fund became under Bush 2. By renaming my account, the interest rate went from .04% to .40%…and I cheered my good fortune and increasing wealth.

  15. I wonder if the Republicans ever thought about the fact that the vast majority of people who are getting taxed to death and screwed over by the financial industry won’t have any money left after paying taxes and losing their savings to pay for goods and services, like new cars, health care, etc? The burden for covering the tax giveaways and tax abatements and TIF handouts that go to developers, millionaire sports team owners, as well as increased interest on loans and losses due to financial misdeeds always, always, always falls on middle class people. These people are supposed to be the customers of the oligarchs. We’re all going to be broke soon.

  16. Natacha; I have often wonder the same things. I also wonder if they realize – or care – that millions of the people they are abusing, over-taxing and denying rights to, are Republicans who voted for them? All we can do at this time, the most destructive time and deconstructive presidential administration in history, is hope that enough will realize what is being done to them and who is doing it. 2018 is creeping up on us; a time and opportunity for new beginnings.

  17. Most people feel helpless, say what can I do. I just say do SOMETHING. Send five dollars to good candidate, work on campaign of someone at some level. It’s not just about Trump.

  18. It appears (that) some people think gerrymandering is a Republican phenomena. It is not. Both major parties actively support it. Minorities often especially support it. It hurts Libertarians especially. Setting up a district so that (e.g.) a Republican is an almost guaranteed winner often means that the adjacent district is Democratic, and by putting minorities into that district guarantees a successful election of a black or other minority candidate. Thus neither party needs to overly invest financially or put forward a truly competitive candidate. For Libertarians, we prefer a close, competitive race, where our 4-15% vote can tip the race to one side or the other, forcing both major parties to be Libertarian friendly and/or more competitive in general.

  19. The issue at hand is the little guy is being overreugulated or hurt. 1in 5 community banks went bye bye we’re swallowed up or closed their doors. A change in regulation was needed but to what extent should Dodd Frank be changed Under regulation can also hurt by causing economic by allowing them to abuse will this new bill do that?

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