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Articles tagged Wall Street
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Politicians being bought and sold by Wall Street is nothing new. Most readily sell their souls in exchange for campaign dollars, hoping to win tough races. But what about those who are in safe seats, who sell of their morals off to the highest bidder anyway?
Rep. Gwen Moore, a Democrat from Wisconsin, recently came under fire by her own hometown paper for courting big Wall Street money. An article in the Milwaukee Journal Sentinel by Daniel Bice, “Wall Street support puts Gwen Moore on hot seat,” pointed out that while Moore represents the poorest district in Wisconsin, she has been leading the charge on behalf of Wall Street when it comes to deregulation. It points to her support of HR 1256, a bill that recently passed the House of Representatives that makes it easier for Wall Street to dodge new rules by simply moving risky derivatives trades overseas. Consumer groups nicknamed it the "AIG Bailout Certainty Act," because AIG was taken down by derivatives they sold out of a small office in London, but was still bailed out 100 cents on the dollar by U.S. taxpayers.
And, you guessed it, Rep Moore is being rewarded handsomely for her efforts. The Sentinel reported, “Moore's campaign fund took in more than $83,000 from the banking and finance industries in 2011-'12, with her leadership committee receiving $15,000 more — meaning she received more from these special interests than any other Wisconsin rep except U.S. Rep. Paul Ryan, long a darling of Wall Street.”
Rep Moore was very bothered by this exposure of her corporate capture. So bothered, she drafted a defensive letter to the editor in response. In it, she insists that she is “painfully aware of the poverty level in my district.”
But is she? It was, after all, Wall Street deregulation that led to the financial crisis, which cost the country $12.5 trillion and left 46.2 million Americans in poverty, the largest number recorded in the 52 years the Census has tracked poverty. And the impact was even worse on communities of color. Rep Moore's district is 44% Black or Hispanic. But it was Wall Street's boundless appetite for risk and mortgage-backed securities was responsible for eliminating 66% of the wealth in Hispanic households and 53% of the wealth from Black households between 2005 and 2009.
The predatory lending that savaged communities of color was no accident. Bank of America paid $335 million to settle with the Department of Justice for charging higher fees to over 200,000 Black and Hispanic borrowers than they did to non-Hispanic white borrowers of the same credit profile. Wells Fargo settled with the Department of Justice for $175 million over equally discriminatory practices. Wall Street looked at communities of color and saw an opportunity to rip their faces off. So why is Rep Moore working so hard to make life easier, and more profitable, for these Wall Street firms?
Another bill that Rep Moore championed, HR 992, allows banks to hold almost any kind of risky derivative in the same part of the bank where depositor funds live. It also happens to make the cost of doing business substantially cheaper for Citigroup. So it should come as no surprise that Citigroup wrote the bill. If Rep Moore is concerned with the poverty in her district, why would she want to make life easier for Citigroup? In 2007, the NAACP sued Citigroup and Ameriquest (which was later acquired by Citigroup) for discriminating against Black borrowers by steering them into higher interest, subprime loans while giving more favorable loan terms to white borrowers. Assisting a company with a history of such blatant profiteering and exploitation is nothing less than a biting slap in face to Rep Moore’s constituents.
Rep Moore ended her letter to the editor with the insistence that “my vote is not for sale.”
The lady doth protest too much, methinks.
In the same letter, Rep Moore states that she is a “vocal advocate and champion on issues surrounding poverty and the needs of the hardworking families of Milwaukee.” But if Rep Moore and other politicians were truly concerned with fighting poverty, they would look at the complete picture. Fighting against austerity is simply an attempt to stop the bleeding. It helps Democratic politicians because it makes them look caring, and in tune with their constituents. But it’s nothing more than shoving a bandaid on a hemorrhaging wound.
The knife causing these wounds is Wall Street. Deregulating Wall Street devastated the economy, and now, the (false) answers proposed are austerity, bleeding the government dry, and allowing corporations to swoop in and charge us for basic needs and basic rights.
If Representative Moore were truly interested in fighting poverty, she wouldn’t just try and stop the bleeding. She would stop sharpening the knife.
PS: We don't know for sure if she is a member of the American Legislative Exchange Council, but it would not surprise us.
One of the points Occupy Wall Street made, by choosing to occupy space in Manhattan and not in DC, was that it's really Wall Street who runs things, not the government.
Today the Committee considered a slew of bills that tear down many of the Wall Street reforms passed in 2010. These reforms were already imperfect, as Wall Street sent the full force of its lobbying to the Hill in 2010 to compromise these reforms as much as possible.
Wall Street, having succeeded in 2010 in watering down the reforms meant to regulate them two years after they ruined the economy, did not rest. They have been lobbying nonstop since then to do everything they could to gut these reforms even more.
Today, nine deregulatory bills were considered, and nine were passed. The most egregious, HR 992, which we wrote about on Monday, passed 53-6. This bill is named "Swaps Regulatory Improvement Act", but it should be called, "If Banks Get Bailed Out, We'll Get Sold Out. Again." This is the bill that makes the cost of doing business for Wall Street lower by exploiting the implicit backing of the Federal Government. It allows banks to hold risky derivatives in the insured depository--that part of the bank that is insured by the FDIC. As we wrote yesterday, this is dangerous because derivatives are senior in bankruptcy--derivatives counterparties get paid out first.
Only six members of Congress, out of sixty-one total committee members, decided that this risk was too much. That Wall Street has won enough fights. Six out of sixty-one. The only six who dared to not roll over for Wall Street are: Rep Maxine Waters (@MaxineWaters) (D-CA), Rep Keith Ellison (@keithellison) (D-MN), Rep Steven Lynch (@RepStephenLynch) (D-MA), Rep Velazquez (@NydiaVelazquez) (D-NY), Rep Mike Capuano (@mikecapuano) (D-MA), and Rep Al Green (@RepAlGreen) (D-TX).
Those six were decidedly in the minority. Fifty-three members of Congress decided that, no, we really ought to make life even easier for the megabanks. The megabanks have it so hard, after all, right?
The banks have laundered money for drug cartels. They have deliberately lied to regulators. They have lied to Congress. They have illegally foreclosed on homes and then had their captured regulator give wronged parties a slap-in-the-face settlement of $300. They have manipulated global interest rates. They have sold predatory loans disproportionately to people of color . They have been bailed out. And they will not lay low.
Fifty-three members of the Financial Services Committee today decided that all this malfeasance, corruption and criminal activity is not only fine, but it should be rewarded. We should make life even easier for them. We should lower their cost of doing business on the backs of the US taxpayer. Only six decided that no, enough is enough.
It is the same old song in Congress. Wall Street owns them, and no amount of disgrace, shame, corruption and crime will deter the fifty-three members of this Committee from pledging allegiance to Wall Street.
Here is the complete list of the Financial Services Committee members. The official twitter for the Republicans on the Committee is @FinancialCmte, and the twitter for the Democrats is @FSCDems. Wall Street still runs things, but it is worth letting our captured Congressmembers know that we are fully aware that Wall Street also owns them.