Do you remember that little problem that we had back in 2008 when the government had to bail out the banks to keep the economy from crashing? Remember how mortgage companies gave loans to people who could not afford them without verifying their income or their credit rating or whether they even had a job. Remember how the money guys bundled these toxic loans and sold them as if they were golden; and the SEC sealed the deal by rating the loans AAA without even looking at them? Remember how all those mortgages defaulted, and the housing market tanked, and lots of big Wall Street firms went under, and lots of banks went right with them causing the biggest financial disaster in our history? Don’t you remember how the government spent $700 billion dollars in taxpayer funds to bail out the banks and pull us from the brink of economic Armageddon? And don’t you realize that the sluggish economy and massive unemployment that we are living with today is the result of the reckless lending and investment practices that still go on today.
Well apparently neither does the Republican Party. Because thanks in large part to their efforts the government has done virtually nothing to prevent this from ever happening again.
The Obama administration has tried to put safeguards into place to outlaw predatory lending practices and monitor huge corporations whose failures could jeopardize the financial system. A year ago the President passed a financial overhaul law designed to secure the financial markets. Included in the law was the formation of the Consumer Protection Bureau who, as it name clearly indicates, was formed to protect consumers’ rights when dealing with financial institutions.
The Republicans have tried to impede the legislation at every turn. They have stonewalled the process of drafting regulations to enforce the law. The AP reports that out of an estimated 400 regulations to be written only 38 are complete. They have sliced $200 million from Obama’s $1.4 billion budget request for the SEC which has a major enforcement role. And they have procedurally blocked Obama from putting Elizabeth Warren or anyone else in charge of the Consumer Protection Bureau which opens its doors in two weeks.
The Republicans feel that this legislation kills jobs. They feel that it harms rather than helps the flow of commerce. The AP quotes Republican Representative Jeb Hensarling of Texas who serves on the House Financial Services Committee: “the law hurts the formation of capital, the cost of capital and access to capital, and you can’t have capitalism without capital.”
The Congressman is correct…you can’t have capitalism without capital. But he turns a blind eye to the fact that that by allowing the financial system to operate unchecked we nearly brought down the pillar of capitalism that he holds so dear.
Nothing has changed. The Congressman should be pleased. The predatory lending practices and reckless investment strategies that destroyed our economy in 2008 are still going on today. All that we risk is another financial calamity.
And nothing generates capital and creates jobs like a financial meltdown.