Marshall Auerback at the Independent Media Institute writes—Why the untamed finance industry is almost certain to bring us to the brink of crisis — again:
Judging from the public conversation we’re having as we head into the early stages of the 2020 presidential election, bankers no longer appear to be public enemy number one. Big tech appears to have that title. Still, let’s not forget that the actions of several large financial institutions in the run-up to 2008 were largely responsible for catastrophic job losses of millions of households, the repossession of their houses, the destruction of their retirement savings, the collapse of a multitude of businesses, an ongoing stranglehold into myriad forms of debt, and a relentless lobbying machine that exonerates it from any kind of oversight with real teeth.
The legislative response to this fiasco, the Dodd-Frank Act, is being undermined every which way, and wasn’t all that strong to start with. It was passed in order “to ‘promote financial stability,’ ‘lift our economy,’ and ‘end too big to fail,’” argued financial observer Tyler O’Neil, “and the bill has achieved none of those goals.” In fact, it created a host of perverse incentives that have likely made our problems a whole lot worse. Financial reform might be yesterday’s news, but we are inching closer to another economic crisis, in which the “old news” might very well become new and relevant again.
Why is that? For one thing, Dodd-Frank did not structurally alter the banking system (in contrast to the aftermath of the Great Depression via Glass-Steagall). The big “too big to fail” (TBTF) banks got bigger. And by bigger, we’re talking about a sizable ownership stake over 60 percent of GDP.
One prominent example is the newly established Consumer Financial Protection Bureau (CFPB—an Elizabeth Warren proposal that actually initially proved to be one of the few effective reforms introduced by the new banking legislation). The CFPB has been largely gutted by “acting” head, Mick Mulvaney. Likewise, the oversight provisions for big banks have been watered down by the appropriately named Crapo Bill, and Dodd-Frank’s detailed rule-making injunctions have largely been left to the discretion of bank-friendly executive agencies, such as the Federal Reserve, Office of the Comptroller of the Currency (OCC), and Securities and Exchange Commission (SEC), all of which have historically shown themselves to be prone to regulatory capture.
Even one of Dodd’s contributing architects, Lawrence Summers, in a piece co-authored with Harvard Ph.D. candidate Natasha Sarin, found no evidence “that markets… regard banks as substantially safer today than they were in the pre-crisis period.” Many of the same practices that led to the collapse of the financial system in 2008 are as prevalent today as they were in 2007. These include the revival of some of the most toxic products that contributed to the last crash, such as the synthetic collateralized debt obligation (CDO) and the related collateralized loan obligation (CLO), along with an ongoing regulatory culture that still expresses itself in policy preferences that favor industry interests over those of ordinary citizens.
Given the Democrats’ renewed enthusiasm for antitrust (at least as it applies to big tech), the question is whether “break ’em up” to foster greater competition is the way to go with banks, or whether a more “function-centric” approach to regulation makes more sense going forward. On big tech, I’ve written before that size per se may not be the best benchmark to establish optimal regulation. The same might be true for banks. [...]
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— Rep. Barbara Lee (@RepBarbaraLee) May 4, 2019On this date at Daily Kos in 2012—Colin Powell is so sad he can't erase 'blot' on his reputation:
Former Bush era Secretary of State Colin Powell has a new book out May 22. As with so many political celebs, it's a book written "with" a professional person who does the actual writing. But it includes quotations from the guy who was once seen as potential presidential or vice presidential material. Based on uncorrected proofs released in advance, what we get once again is Powell lamenting the stain he can't get rid of because of the dead-wrong 85-minute speech he gave to the United Nations Feb. 5, 2003. There he declared convincingly that the United States had irrefutable evidence that Iraq had weapons of mass destruction.
Within five months, that claim had been convincingly refuted.
“Yes, a blot, a failure will always be attached to me and my UN presentation,” the former U.S. secretary of state writes in a new book of leadership parables that draws frequently on his Iraq war experience. “I am mad mostly at myself for not having smelled the problem. My instincts failed me.”
Powell, 75, laments that no intelligence officials had the “courage” to warn that he was given false information that Iraq had such weapons during preparations for his February 2003 speech before the U.S. invasion the following month.
We've been hearing this crap from the guy for seven years now. It's tedious. It's sickening. It's self-serving. It's bullshit. It's the same old, same old.
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from Daily Kos http://bit.ly/2E0Hz9t
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