GoldbergBlog

Banks Are Terrifying

I already knew this, but an article from Huffington Post detailing the financial reform bill makes my blood curl.  Here are some examples:

This time around, Congress bailed out Wall Street, protecting the largest firms from collapse, which enabled them to lobby hard against reform, spending over a million dollars a day.

They spent taxpayer money to make sure they would be able to get taxpayer money again in the future.  That’s like buying a victim buying a gun for a mugger.

The effort suffered from the administration’s hesitation to embrace an agenda that would genuinely remake Wall Street.

The Obama Administration took half-measures when they have the ability to go all the way?  I am shocked.  Shocked to my very core, I say.

The bill creates a consumer financial protection entity over the strenuous objections of the GOP and Wall Street…largely bars banks from trading taxpayer money for their own profit and bans many of the deceptive mortgage lending practices that fueled the housing bubble. [Emphasis mine]

So technically banks can still trade taxpayer money for their own profit and some deceptive mortage lending practices are still allowed.  Good to know that we almost fixed problems that had to be fixed.  Who can complain about that?  It’s not like they half-assed it.  It’s more like they 3/4-assed it.

Perhaps most significantly, the law will limit the total amount of derivatives speculation a single bank can engage in, aimed at preventing a run-up in food or energy prices. In 2008, Goldman Sachs and other swaps traders drove the price of wheat to levels that caused starvation around the globe.

I knew Goldman Sachs was evil, but holy shit.  They caused worldwide starvation and made a profit from it.  It’s one thing to create bubbles that crash an economy, but it’s a special kind of evil causes people to starve to death in order to make money.

Perhaps the biggest disappointment for reformers is that the bill leaves in place the major banks that caused the crisis. The largest banks have grown larger under Obama’s watch. Banks will still be able to speculate in the riskiest kinds of derivatives and invest in hedge funds and private equity funds. Depending on what regulators decide, they may not be required to hold much more capital to protect against losses than before the crisis, since neither a number nor a formula was specified in the bill. They may still continue to lever up their investments, imitating a practice of the fraud-inflated housing boom in which some investment firms used $1 to back up every $30 in investments and bets.

1 million Americans are expected to lose their homes this year.

The unemployment rate was at 9.5% in June.  It’s expected to rise as 700,000 census workers are laid off.  The unemployment rate does not include those who have given up looking for work.

The Senate refuses to extend unemployment benefits.  Republicans couch their argument in the falsehoods that the jobless are lazy and that we can’t risk increasing the deficit (unless it’s for tax cuts).  The purpose of ruining the lives of the unemployed is done so voters believe it’s the party in power that’s the culprit.  This tactic is done so Republicans can get back into power and continue ruining people’s lives.

But at least something called “financial reform” is getting passed.  It has a nice ring to it.

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