Congress at work

Looking out for Wall Street

By Mike Krauss

Bucks County Courier Times

The Wall Street crash of 2008 was brought on by unprecedented self-serving and risk taking that went undetected by the regulators — the cops on the beat — to whom the American people entrust the job of insuring honest markets and honest dealing in the banking and finance industry.

Since the Reagan administration, Congress and presidents of both parties have been bowing to Wall Street and billions of dollars of lobbying and campaign contributions in a system of legalized bribes. They have steadily reduced the manpower and resources of the regulators and put Wall Street insiders in charge of their agencies; even as the global wheeling and dealing of the finance industry they are charged to police has become ever more complex and opaque.

The lessons to be learned are obvious. Wall Street cannot be trusted to regulate itself. The rewards of fraud have trumped honesty and morality. The regulators are out-gunned. The crooks run circles around the cops.

And the remedy is equally obvious. Limits must be placed on Wall Street’s risk taking and the cops on the beat — the Securities and Exchange Commission in particular — must be given the tools and authority to do their job, detect catastrophic risk, take action to avert another crash and protect the American people.

But Congress and the president have done just the opposite.

In December, a Wall Street friendly Congress and president got together to enact legislation to allow Wall Street banks to place their riskiest assets — almost $300 trillion of derivatives holdings — in the business units that enjoy FDIC protection, setting up a back door bail out via the FDIC in the next crash.

Republican Mike Fitzpatrick, who represents Bucks County, was one of seven votes that made the difference to pass the legislation in the House. Now, Fitzpatrick is leading the charge for more favors for the parasites in pin stripes.

He has introduced legislation to further roll back the already weakened safeguards put in place after 2008 to protect Main Street from Wall Street’s greed and recklessness.

Can the congressman and so many of his colleagues have forgotten the lessons of 2008? Or is it that Congress just can’t see the forest for the green of all that Wall Street campaign and lobbying cash?

But if Congress has no memory, not so Wall Street, which knows that one trader making a bad bet can take down a bank. While Congress may have forgotten the “London Whale,” the trader who took a loss that blind-sided JP Morgan two years ago, the banksters remember.

They remember way back to 1995, when one trader bet wrong and took down Barings, one of the oldest merchant banks in the world.

Wall Street is getting ready for the next crash.

First, the global banking cartel used the G20 to set up a “bail in” — a confiscation of deposits — to insure the cash on hand to survive the next bad bet. Then the barons got the Wall Street-friendly Congress and president to set up another insurance policy, the back door bail out via the FDIC.

Two bail outs are better than one.

Fitzpatrick’s constituents may not be pleased to learn that he is so eager to serve Wall Street that he cannot remember the horrendous damage done only six years ago. Kevin Yoder, the Kansas Republican and Wall Street errand boy who slipped the back door bail out into last year’s legislation, got hammered by the Kansas media and constituents posting on his Facebook page.

One called Yoder the “lowest of the low” and added, “Hope you burn in hell.” Another called Yoder “one greedy immoral coward.”

Gotta love Kansas. Direct.

Which may explain why Fitzpatrick was selected to quarterback Wall Street’s latest play — he’s not running for re-election. So whatever heat he may take for his services to Wall Street, he’s fire-proof.

Give Wall Street credit. They look out for their own.

Who in Congress is looking out for the American people? Mr. Fitzpatrick, the vice chairman of the House Financial Services Subcommittee on Oversight and Investigation, who favors protecting Wall Street from the oversight that might prevent another crash?

Mike Krauss is chair of the Pennsylvania Project and a director of the Public Banking Institute. www.publicbankingpa.org / Email: mike@mikekrausscomments.com