Dear America,
It's probably time we started talking about something other than Donald Trump. He may well orchestrate his own political demise, but if he doesn't there's really nothing we can do about it, and dousing his absurd acts with the truth every day doesn't seem to change anything. So let's move on to something that someone else is doing to us. Jeb Hensarling, who chairs the House Financial Services Committee is trying to essentially repeal the Dodd-Frank Act, and that would effect us all. It is important to remember that Dodd-Frank was enacted to replace the 1933 Glass-Steagall Act, which was formerly repealed under the auspices of Bill Clinton and Newt Gingrich by the Gramm-Leach-Bliley Act, a law passed in 1999. It is also important to remember that the principles involved essentially kept investment and savings institutions separate, only the latter being insured by the federal government to prevent those with savings in banks from being ruined by another financial debacle like the Great Depression. It is also true that Glass-Steagall had been undermined by conservative, some might even say nefarious forces in the financial industry over the course of the sixty-five year existence of the act to the extent that it was essentially entirely vitiated by the time of its repeal. But even Newt Gingrich admits that the financial crisis that started in 2007--the disaster that probably changed our economy forever to the detriment of those of us who are down here on earth rather than up in the rarified atmosphere of the 1%--probably never would have occurred but for the repeal of Glass-Steagall. Glass-Steagall had been undermined into meaninglessness by the obsession with deregulation that started in the Reagan administration and continued through the nineties, but the fact is that both the form and the essence of Glass-Steagall protected us from the bank failures that occurred in the thirties, and the evidence is plain. The federal government enacted the TARP--Troubled Asset Relief Plan--out of fear that the big investment banks would go under and take the savings of not just their investors, but of their regular depositers as well with them, leaving the Federal Deposit Insurance Corporation...the FDIC...to make good on the losses that the investment bankers had wrought. In order to protect us regular Americans from losing our life's savings, the federal banking system forced those big banks to take on loans that would cover their exposure under what is essentially part of a legal gambling ring for millionaires and billionaires: the "derivatives market."
In light of all this, Congressman Barney Frank and Senator Chris Dodd got together and formulated the Dodd-Frank Act, which in its original configuration required all those banks that were too big to allow to fail to fund an insurance account of their own so that if one greedy institution got into trouble, all the other greedy institutions would have to bail them out instead of the American taxpayers. But the Republicans...conservatives who think that anything business does is good for all of us...killed that provision in The Act, and attempted to thwart the entire purpose of Dodd-Frank with parliamentary procedure in congress during the regulatory process that was to take place there. But some things remained, among them being the "Volcker Rule," which keeps investment and savings institutions separate, and the Consumer Financial Protection Bureau, which regulates the conduct of banks' and other financial institutions' interaction with consumers. The latter is what you complain to when a bank, like Wells-Fargo, foists services on you that you don't want and then charges you for them (that actually happened and the CFPB caused them to refund millions to cheated customers just a couple of years ago). That's where Jeb Hensarling comes in. He wants to essentially eviscerate the CFPB and eliminate the Volcker Rule, which in essence would be a repeal of what's left of Dodd-Frank. Remember that Dodd-Frank, like Glass-Steagall before it, is the only thing that protects us from predation at the hands of the big banks, and Hensarling wants to render it meaningless. And the Republicans in Congress will likely go along with him, though the Democrats in The Senate will not allow it in the end.
All of this precipitates the question, how did we get to this point in time at which people elect and reelect representatives--Hensarling has been a Congressman from Texas for over fifteen years--who are hell-bent on allowing their patrons to shaft us. Actually I have an answer, but that's for another time.
Your friend,
Mike
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