Who Calls the Shots in Washington? Government Of, By, and “For The Banks”
By Andre Damon
May 26, 2013
Five years since the 2008 financial meltdown, the speculation and fraud that caused the crash are back in full force in the United States. Flush with the $85 billion in cash printed up and handed to the banks every month by the Federal Reserve, business at the Wall Street casino is booming. Stock values are at record levels and so are bank profits, amidst declining wages and mass poverty.
Under these conditions, the banks have been pushing to rip up even the very modest restrictions on financial speculation, while broadening the scope of government bailout laws. The aim is simple: to give banks the maximum ability to speculate without constraint, while getting the maximum possible government assistance if and when the bubble collapses.
So close is the bankers’ grip on the reins of government that, no longer content to let their bought-and-paid-for politicians write laws, the banks have taken to doing the work themselves.
This was the case with a bill that passed the House Financial Services Committee this month, HR 992, which significantly expands the number of financial institutions eligible for coverage by the Federal Deposit Insurance Corporation (FDIC). The bill, which passed with majority support by both Democrats and Republicans, amends an earlier law that prevented financial institutions that trade swaps—a set of dangerous and largely unregulated derivatives—from coverage by the FDIC.
The New York Times reported Friday that, according to emails the newspaper examined, 70 out of the bill’s 85 lines were based on the recommendations of Citigroup, one of the largest US banks. Two paragraphs were inserted nearly word-for-word from an email written to lawmakers by the bank.
The bill restricts provisions in the Dodd–Frank Wall Street Reform and Consumer Protection Act, signed on July 21, 2010. This law was largely a publicity measure by the Obama administration, made to appear as a crackdown on financial speculation while in reality allowing the banks to go on with business as usual.