The Sixteen Democrats Who Voted to Weaken Dodd-Frank

This past week the Senate passed a bank deregulation bill. This comes under the heading of why are they wasting our time on this crap in my book.

The Sixteen Weenies are:

Bennet, Colorado
Carper, Delaware
Coons, Delaware
Donnelly, Indiana
Hassan, New Hampshire
Heitkamp, North Dakota
Jones, Alabama
Kaine, Virginia
Manchin, West Virginia
McCaskill, Missouri
Nelson, Florida
Peters, Michigan
Shaheen, New Hampshire
Stabenow, Michigan
Tester, Montana
Warren, Virginia

What did this crew vote for?

The bill — one of the few important bipartisan pieces of legislation to move through Congress — would peel back key parts of Dodd-Frank, the 2010 law that was one of former President Barack Obama’s signature achievements, while leaving most of its regulations intact.

It has several elements aimed at scaling back lending rules. They include: relaxed mortgage regulations for small banks; broad exemptions from oversight for regional banks with up to $250 billion in assets; a mandate that the Federal Reserve tailor its rules for big banks; and easier capital and liquidity requirements for a number of the nation’s largest lenders.

The bill includes a handful of consumer protections, such as a requirement that credit reporting companies like Equifax provide free credit monitoring to members of the military — a proposal that has alarmed conservatives who warn that it would expose the firms to lawsuits.

Democrats who helped draft the bill argue that the legislation is an overdue recalibration of Dodd-Frank that would help make it easier for small and midsize banks to provide credit, particularly in rural areas.

Well, that sounds benign. But let’s hear from the other side.

Warren, the Massachusetts Democrat who worked with the Obama administration on banking industry oversight after the 2008 crash, pledged to fight the bill, even if she faced long odds.

“There’s Democratic and Republican support because the lobbyists have been pushing since the first day Dodd-Frank passed to weaken the regulations on these giant banks,” she said during a morning press conference.

She added: “People in this building may forget the devastating impact of the financial crisis 10 years ago – but the American people have not forgotten. The American people remember. The millions of people who lost their homes; the millions of people who lost their jobs; the millions of people who lost their savings, they remember and they do not want to turn lose the big banks again.”

She was joined in her rebuke of the legislation by Vermont senator Bernie Sanders, who said in a statement: “Now is not the time to deregulate banks that have more than $3.5tn in assets and lay the groundwork for another massive financial collapse. Now is the time to take on the greed and power of Wall Street and break up the largest financial institutions in the country.”

Here’s the Vox explanation:

The provision of the bill that has garnered the most attention is one that would raise the threshold at which banks are subject to certain federal oversight, including stress tests that measure a bank’s ability to withstand an economic downturn. Under current law, banks with assets of $50 billion or more are considered systematically important financial institutions (often referred to as SIFIs) and are therefore subject to stricter oversight from the Federal Reserve.

The Senate bill would increase the SIFI threshold to $250 billion. Banks with assets of less than $100 billion would be freed of current oversight requirements, and those between $100 billion and $250 billion would no longer be subject to tougher rules after 18 months, although the Fed could determine periodic stress tests and other tailored oversight measures. That would free up a lot of regional banks from the heightened regulatory scrutiny they face today, including BB&T, SunTrust Banks, Key Bank, and American Express. The bill could affect about two dozen banks in total.

There was an argument, some say, for cranking up the $50 billion limit a tad, but pushing it up to $250 billion is asking for trouble. That’s according to the Congressional Budget Office, anyway.

Among other parts of the bill, CBO analyzed Section 402, which would change the supplementary leverage ratio, or SLR, a simple calculation of total equity divided by total assets. The section lets “custodial banks,” which do not primarily make loans but instead safeguard assets for rich individuals and companies like mutual funds, to eliminate reserve funds parked at central banks from the calculation, reducing leverage by as much as 30 percent. This would juice returns for these banks but also layer on additional risk, by allowing them to hold less equity to offset losses in a crisis.  …

… According to CBO, Section 402 would cost taxpayers $45 million over the next 10 years, a measure of the potential for failure of the custodial banks, as well as JPMorgan Chase and Citigroup. This would cost both the Federal Deposit Insurance Corporation’s Deposit Insurance Fund, as well as its Orderly Liquidation Fund, used to unwind complex banking institutions during a crisis.

Ironically, I recently found an article on Democratic Senators Most Likely to Lose to a Republican in November. There are five Democrats up for re-election who are currently behind in polls against either their general election opponent or Generic Republic. All five of them are on the list above. Behind in polls:  Tester, Montana; Manchin, West Virginia; McCaskill, Missouri; Donnelly, Indiana; and Heitkamp, North Dakota. Stabenow is slightly ahead in a squeaker.

Coincidence? I don’t think so.

Voting to weaken Dodd-Frank is terrible politics. Ross Barkan writes at The Guardian:

This week, it became clear again Democrats have not truly internalized 2016. Democrats in the Senate joined the Republican majority to vote in favour of gutting key banking regulations passed in the wake of the 2008 crash, leaving dissenters like Elizabeth Warren to howl into the wind.

Beyond the immorality of the votes, they represented poor politics – a concession to the banking lobby in exchange for further distance from the beating heart of the party.

“I hope that our bipartisan work can rub off on the rest of Congress so we can break through the partisan gridlock that has plagued Washington for too long,” said Jon Tester, one of the moderate Democrats who worked on the legislation. …

… It’s worth considering when bipartisanship can still exist in this deeply polarizing moment. It cannot live where there is a growing national consensus, as over the severity of climate change or the scourge of mass shootings.

It cannot live in any kind of economic matter that benefits the working class or the poor, even after Donald Trump managed to shred rightwing economic orthodoxies on his way to the presidency – never mind that he’s governing like a Koch brothers pawn.

Democrats and Republicans can only come together to feather the nests of the rich and powerful. Weakening Dodd-Frank confirms the worst suspicions of any cynical voter – that the political class really is colluding to screw them over.

What Tester doesn’t understand is that this “bipartisan work” will not “rub off” on Congress. This bill only exists because the largest funders of the Democratic party want it to exist. Big donors on the Republican side will kill efforts to ban assault weapons, fix our healthcare system or end our reliance on fossil fuels.

There is only bipartisanship when the rich demand it. Where no demand exists, the war commences. And make no mistake, 21st-century American politics is war.

I realize there’s an argument that more conservative states will only elect conservative Democrats. The problem is that this assumes the most palatable challenger to a hard-core conservative is a “centrist” conservative. But, seriously, there’s no center any more. Voters who don’t want the crazy right-wing asshole Republican to win are not looking for a candidate who is a watered-down crazy right-wing asshole. They want something that’s clearly different.

Here in Missouri, I never hear liberals gush about how much they like Claire McCaskill. People shuffled off to the polls and voted for her six years ago to keep the misogynist creep the Republicans nominated out of office. But there’s no real enthusiasm. To win in a state like this, Democrats have to whip up enthusiasm among not-crazy voters who are not Democratic loyalists, and I don’t see them doing that. McCaskill does have a primary opponent, but I didn’t know that until I looked it up. So far, there’s no primary campaign.

The one thing McCaskill has had going for her is the Missouri Republican Party, which is pretty much a clown act. But her current Republican opponent, state attorney general Josh Hawley, hasn’t yet said anything stupid about “legitimate rape” and, interestingly, is keeping some distance between himself and the Republican establishment in Washington, including Mitch McConnell. If he runs a smart race he’ll probably beat McCaskill pretty easily. (Although, so far, he hasn’t been running much at all. But it’s early yet.)  The only thing that might help her is if Trump is seriously tanking in the Fall and Hawley is put on the spot to support Trump or not. Or, if Hawley were to lose to his primary opponent, Courtland Sykes, McCaskill will enjoy six more years in Washington. Sykes is a one-man carnival sideshow even by Missouri standards.

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Now Putin and Trump Are Coordinating Antisemitic Slurs

Yesterday Trump lobbed a weird insult at Chuck Todd. Referring to Meet the Press, he said,

“A show now headed by ‘Sleepy eyes Chuck Todd,’” Trump said Saturday. “He’s a sleeping son of a bitch.”

Trump first used the moniker in April of 2017 when questioning why Todd and NBC News were not covering his claim that the Obama administration illegally spied on his campaign. Trump has a longstanding feud with NBC News and Todd, whom he considers to be biased against his administration.

“When will Sleepy Eyes Chuck Todd and @NBCNews start talking about the Obama SURVEILLANCE SCANDAL and stop with the Fake Trump/Russia story?” Trump tweeted last year.

I had never noticed Todd looking particularly sleepy, so I wondered what this was about. But my friend Jeffrey Feldman explained it.

The “sleepy eyes” thing is an antisemitic dog whistle, in other words. The interesting thing is that yesterday,  in another interview with Megyn Kelly, Vladimir Putin blamed 2016 interference on Jews.

Putin suggested those responsible for the meddling could be Ukrainian or Jewish people with Russian citizenship, or Americans who funded the interference.

“Maybe they’re not even Russians,” he told Kelly.

“Maybe they’re Ukrainians, Tatars, Jews, just with Russian citizenship. Even that needs to be checked,” he added. “Maybe they have dual citizenship. Or maybe a green card. Maybe it was the Americans who paid them for this work. How do you know? I don’t know.”

Both slurs took place on the same day. One might think it was a coordinated effort.

There are calls for Trump to denounce what Putin said, although (except for Jeffrey Feldman) I’m not hearing much about what Trump said.

See also Haaratz. Trump won’t criticize Putin, of course.

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