During the summer of 2007, investment bankers in England were saying that American financial institutions were pulling some shady deals with derivatives and sub-prime mortgages, and that the whole world was heading for an economic crash. A year later America, and indeed the world, was struggling to prevent a full-fledged financial meltdown that nearly rivaled the Great Depression and is still being felt in every country in the world. Regardless the exact cause of the meltdown, deregulation allowed the financial industry the latitude to engage in reckless conduct, corruption, and absolute greed that caused the crisis on Wall Street and the near collapse of the world’s economy.
Last year, a broad, sweeping financial regulatory reform bill was signed into law and it created a body within the Federal Reserve to protect consumers, have oversight of the derivatives market, and provide a means for the government to take over and dismantle failing financial firms. On its face, the law may not seem important to Americans who are struggling to subsist in an economic downturn amplified by job losses and rising cost of living, but it prevents financial institutions from putting the country in another perilous situation like the crash of 2008. Although the law’s purpose was to protect consumers and America’s financial stability, Republicans opposed it to protect the financial and banking industry that donates heavily to Republican lawmakers. Democrats also receive donations from the banking and financial industry, but they passed the reform bill Republicans are trying to repeal.
In a move that is becoming all too familiar, Senate Republicans last week introduced a bill to repeal the Dodd-Frank financial regulation bill citing concerns over excessive and burdensome regulations that they say could stifle economic growth. Jim DeMint (R-SC) made the announcement that the bill, S. 712, will repeal the financial reform law in its entirety and it boasts 18 Republican co-sponsors that have strong ties to Wall Street interests. The Republicans’ ties are so strong in fact, that DeMint and the 18 Republican co-sponsors have received $49.7 million from FIRE (Finance, Insurance and Real Estate) sector businesses during their time as legislators. Some critics of the repeal attempt claim that DeMint and his Republican cohorts are repaying their donors by allowing them to have free rein to return to and repeat the practices that nearly crashed the world’s economy.
DeMint’s reasons for repealing the law is the same tired drivel that Republicans cite for every regulatory law Democrats have passed. In a statement on Friday, DeMint said, “We must repeal the Democrats’ takeover of the financial markets that favors Wall Street corporations, over-regulates small businesses with massive new bureaucracy and hurts consumers. This financial takeover will strangle our economy and move jobs overseas unless it is repealed.” The financial regulatory law holds Wall Street accountable for mismanagement and shady dealings, so where DeMint finds Wall Street favoritism in the regulatory law is a mystery. The most ridiculous part of DeMint’s statement is that the law hurts consumers. Consumers were decimated when the market crashed and individual Americans lost up to 45% of their pensions and investments during the 2008 crash. Of course, DeMint is compelled to parrot the Republican talking point that the law is a job killer and will move jobs overseas unless it is repealed. An apropos question for Senator DeMint is; what jobs? Corporations have already moved jobs overseas in an effort to cut costs and avoid paying corporate taxes.
It is becoming more evident every day that Republicans either forget why the financial meltdown occurred in the first place or are worried that if they do not repay their donors, they will lose future support from the financial industry. On some level, it looks as if Republicans want a repeat of events that caused the financial crisis, although, aside from maintaining their corporate money flow, it is their incessant hatred of regulations that drives the effort to repeal the law.
Republicans must think Americans have forgotten that without financial regulations during the Bush Administration, millions of jobs and homes were lost as well as trillions of dollars in wealth. Americans may be memory challenged, but they should remember why the economy nearly crashed. Repealing the regulatory law means Republicans support a return to the days of backroom derivative deals, high-risk subprime mortgages, banks that are too big to fail and the very real threat of a total economic collapse. DeMint’s assertion that financial regulatory reform is hurting the economy and growth is false because Wall Street is having its best first quarter since 1998 and the unemployment rate has dropped to 8.8% while the economy added 216,000 jobs according to the Labor Department report on Friday. The jobless rate is now at its lowest point in nearly two years so DeMint’s assertions are abjectly false. Republican lies are nothing new though and it is their regular course of action when discussing regulations.
With corporate profits at record levels and banking interests hauling in obscene profits while avoiding paying taxes, one would like to think that Republicans are satisfied their donors are doing so well at the expense of working Americans. But Republicans will not be content until they suck every last asset from the American people to give to corporate interests in the finance, real estate, and insurance industry. The financial regulatory reform law was passed to protect consumers and America’s economy, but it is obvious that Republicans could not care less about Americans or the economy. They have given tax breaks to corporations and the wealthy at the same time they cut jobs and programs that protect and serve Americans at every level of income.
DeMint’s attempt to repeal the financial reform law is another assault on Americans and a payback for the nearly $50 million in campaign contributions Republicans have received from the financial industry. Any American who uses a bank, holds a mortgage, or carries insurance should be grateful that the Obama Administration pushed for regulatory reform because they can ill-afford another economic collapse. Wall Street, the banking industry, and insurance industry all suffered from their own misdeeds and came begging the American people for a bailout and were saved from financial ruin. Instead of any gratitude, they are asking to once again be allowed to carry on business without oversight and Republicans are fighting to grant their wishes. It is a tragedy that the American people are not afforded the same care and concern that corporations and the financial industry receive from Republicans.