By William K. Black
Bloomington, MN: February 11, 2015
Don’t get cocky, but also don’t give up. Bank lobbyists are still whining about opposition from progressives to the lobbyists’ agenda to (again) gut financial regulation. The lobbyists don’t fear the Obama administration, they fear progressives and the public.
The story comes from one of the reliable voices of the plutocracy – Bloomberg – in a February 11, 2015 article entitled “Banks May Have Overplayed Their Hand Fighting Wall Street Regulation.”
The financial industry is finding that winning in Washington comes at a cost.
“Wall Street lobbied aggressively and succeeded late last year in persuading lawmakers to roll back rules for the $700 trillion derivatives market. Instead of generating momentum for further changes to the Dodd-Frank Act, the victory sparked a populist uprising among Democrats that’s had wide-ranging consequences, including stymieing less controversial requests from regional banks like Capital One Financial Corp.
‘A short while ago there was bipartisan agreement on a number of common sense improvements,’ said Rob Nichols, president of the Financial Services Forum that represents the chief executives of Wall Street’s biggest banks. ‘Unfortunately, that bipartisan agreement is gone.’
Financial companies and their employees spent $169 million on the November elections and had expectations that their bid to loosen regulations would get easier with Republicans in control of both the House and Senate. Now, there is second-guessing that banks overplayed their hand, according to lobbyists. The December win on swaps rules has become a rallying cry for Senator Elizabeth Warren, a frequent critic of Wall Street, and spurred repeated White House vows to defend Dodd-Frank.”
By “common sense,” the bank lobbyists mean “cannot stand public scrutiny.” But it is true that these amendments that dare not speak their name previously had substantial Democratic Party support among members of the House, particularly those on the House Financial Services Committee. This was true of many Democrats who are progressive on social issues but highly dependent on bank campaign contributions. Now, because the determined opposition by House and Senate progressives to the Obama administration’s surrender on the Cromnibus bill led to public outrage, many Democrats have broken with the bank lobbyists. The administration “vows” “to defend” the rule of law were made while Obama was busy throwing those rules to the wolves, but the progressive and public rage at Obama’s betrayals have scared the White House, the administration’s banking cronies, and the Democrats most susceptible to Wall Street’s odious powers of persuasion.
“Even though they lost the House vote, Warren, Pelosi and Waters cemented Democratic opposition to further changes to Dodd-Frank in the process. They built on support gained in the December debate on derivatives, when during a week of TV interviews and press conferences they portrayed Wall Street as putting taxpayers at risk so soon after the financial crisis.”
Yes, it is only a rearguard action and there are zero prospects of useful financial legislation being passed under this Congress, but rearguard actions sometimes prevent horrific losses. The FDIC’s heroic rearguard action against the Fed’s Basel II capital proposals saved our Nation trillions of dollars in losses. You may feel powerless as a progressive, but the bank lobbyists fear you because your views are strongly supported by the public and because you refuse to give up. It is not necessary to hope in order to persevere. But the public reaction to our criticism of the Wall Street giveaways offers some hope.