CNN: Wall Street Is Back In Charge of Congress, Republicans Will Cause More Bank Bailouts

Under the Dodd-Frank provision, banks could still do their risky transactions — they just couldn’t back them up with taxpayer-insured deposits. The 2008 financial crisis was caused in part by banks bringing these risks into their core business models, putting the entire financial system in danger when the transactions all went belly up. The result was that taxpayers ended up paying billions of dollars to bail out the banks.

Like other for-profit firms, banks take risks. That’s fine. But banks are also the financial system in our society, and aggressive risk-taking can threaten not only their own profitability, but the entire economy. That’s what we saw in 2007-2008, when the excessive and unreported risks taken by financial firms almost plunged the world into an economic collapse and kick-started the worst downturn since the Great Depression.

But Wall Street is once again calling the tune, and Congress is dancing to it. The repeal of “push out” was accomplished with no committee hearings, no public testimony in favor or against, and no explicit votes on the provision.

Unbelievably, the repeal provision was taken, in large part word for word, from a memo written by lobbyists for Citibank. A tweet from Rep. Mark Takano, D-California, highlights sentences that are identical, showing how eerily similar the two documents are.

Rep. Kevin Yoder, R-Kansas, inserted the provision into the spending bill. And when opponents got wind of it, banks pulled out the stops on lobbying. A source told Politico that Jamie Dimon, chairman of JPMorgan Chase, made calls directly to legislators to argue in favor of repeal of the “push out” rule.

It was only back in 2012 that Dimon was defending $5.8 billion in losses from these types of risky transactions, in the “London Whale” scandal. JPMorgan Chase later admitted to the Securities and Exchange Commission that the company’s traders may have been covering up — in other words, lying about — the extent of the losses.

And now Dimon has asked for, and Congress has granted, a relaxation of the very regulations meant to protect taxpayers from having to pay for these kinds of risks.

This victory for the financial industry reflects the sad fact that expensive lobbying works. In the recent election cycle, banks and other financial institutions have so far reported over $1.2 billion in lobbying and campaign contributions, which works out to just under $1.8 million a day, according to Forbes.

Progressive Democrats and conservative tea party Republicans both attacked the deregulation, but the repeal passed anyway. The Obama administration went along with it because officials wanted an overall budget agreement, fearing they would get a worse deal when Republicans have control of Congress in 2015.

Sen. Elizabeth Warren, D-Massachusetts, noted that “Democrats don’t like Wall Street bailouts. Republicans don’t like Wall Street bailouts. The American people are disgusted by Wall Street bailouts.”

This repeal is testimony to how much power Wall Street has over Congress, and it sets the stage for more expensive future bailouts at the expense of taxpayers.

In the next Congress, we will see full-fledged and well-funded attempts to gut much of the Dodd-Frank law, to the benefit of banks but to the detriment of consumers, taxpayers and small businesses. An unidentified senior Republican Senate aide told The Hill the latest rollback of regulation is one of “the first cracks in the Dodd-Frank armor.”

I would bet that many tea party supporters and advocates of small government didn’t think they were voting to let big banks put the economy, and all taxpayers, at risk once more. But that’s what a GOP-controlled Congress looks ready to do. This bad decision on the “push out” rule is likely the first shot in an all-out anti-regulatory war that will enrich the banks further. But it will put the rest of us — Republican, Democrat and independent alike — at greater economic risk.

Briefly, the Federal Reserve system was created by international banking families such as the Rothschilds, Warburgs and Rockefellers. This international banking cartel creates “money” out of thin air. It only costs them a few cents to print each Federal Reserve Note “dollar bill”, and then they “bill” the American people for the full face value of the note. Then to add insult to injury, they charge us interest to borrow their so-called “money”. If you or I did this, we would be arrested for counterfeiting and fraud. This system was instituted gradually, starting with the Civil War and culminating with the fraudulent passage of the Federal Reserve Act in 1913.

The passage of the Federal Reserve Act was unconstitutional because 1) the US Constitution prohibited “bills of credit” (i.e., paper notes) and 2) the US Constitution would have to be amended to go off the silver and gold coin standard for money. The US Constitution, the supreme Law of the Land, can only be amended pursuant to Article V. The US Constitution cannot be amended by statute. These unlawful actions by a criminal Congress remind me of a quote by the honorable Alfred E. Neuman of Mad Magazine fame: “America is that land which fought for freedom and then passed laws to get rid of it.”