Kiss the Economy Goodbye: Republicans Plan to Kill Obama’s Wall St. Reform – Meltdown On The Way!

The GOP nomenklatura has never stood for the poorest of Americans. Being little more than an apparatchik for the wealthy oligarchs who run the country, they will stop any attempt to rein in their masters. As further proof of where their loyalties lie (because proof was needed), in the waning days of 2014, they managed to score their biggest victory so far. Bundled in a spending bill that passed the House were measures to rollback new regulations on derivatives as part of the Dodd-Frank Wall Street Reform Act.

And they hope to make a bigger impact once they’ve got both houses of Congress. This is just the opening salvo.

Behold, what monster hath GOP gerrymandering and apathetic voters wrought. If you thought 2014 sucked, wait until 2015 and 2016. Nothing is going to get done, and things will be worse off for it.

Well, not nothing. Obama will probably end up with a record of more vetoes than any president in recent memory, but when you’re stopping individuals incapable of expressing themselves beyond violent temper tantrums and public martyrbation, that record is for a good cause.

Speaking to Bloomberg shortly after the spending bill passed, GOP Rep. Kevin Yoder uttered five words nobody ever wants to here a member of Politburo say: “We have created a model.” He went onto add that: “This bipartisan success shows a pathway to solving other issues in the financial services area.”

With zero debate and a looming deadline, Congress shoved through the bipartisan spending bill in December that gutted new regulations on complicated financial instruments called “swaps.” Then, days later, the feds announced that a core element of the Volcker Rule, which bans banks from speculative trading, is going to be delayed until 2017.

This is a neat little example of how the parasites of Wall Street are fighting back. Their new strategy includes fighting for a delay, buying time and buying bipartisan support from the more “moderate” democrats for legislative rollbacks. Lisa Donner, executive director for Americans for Financial Reform, noted that the “attacks are nothing new, but they’ll harder and faster.”

The Republicans have their potential targets already lined up, and have been laying them out through dozens of hearings and bills that the House has passed. Thought the potential for a full repeal probably isn’t on the table, but death by a thousand cuts is almost certainly the endgame. In the process of targeting new oversight for “systematically important” institutions that could threaten the entire economy if they were in trouble, attempting to repeal new rules for unwinding failing banks, and trying to alter the funding, structure, and oversight of the new consumer watchdog group supported by President Obama, the GOP is trying to shift as much attention away from the parasites on Wall Street as possible — and they’ve gained more traction in the recent months.

They’ve allied themselves with smaller banks, Main Street companies, and others outside of Wall Street who have been deluded into thinking Dodd-Frank unfairly burdens them. This notion that it hurts “Main Street” is how the Nomenklatura framed their case against the Volcker Rule, and the successful push to repeal the swaps regulations in December only picked up speed once regional banks joined those vocally opposing the regulations.

Senate Majority Leader Turtle McConnell (R-Galapagos) said after the election that, “The big guys are doing just fine under Dodd-Frank. The community bankers are struggling,” and that, “I do think the Banking Committee will want to take a look at how much damage it’s done to the little guys who had nothing whatsoever to do with the meltdown in 2008.”

The backlash against the move to dismantle it, though, is promising. According to former Senator Barney Frank, who helped laid the ground work for the Dodd-Frank legislation, “I was worried about this happening, but I have been encouraged by the angry reaction…I was afraid that they would do this, and nobody would fight back. It’s now clear the president is going to be much tougher in resisting it.”

President Obama has promised to support his reform, come hell or high water: “If they try to water down consumer protections that we put in place in the aftermath of the financial crisis, I will say no.”

How Wall Street Loots Public Pensions and Blames Shortfalls on the Government

Would you invest your money with someone who said that he would find some hedge fund managers and private equity partnerships to manage it but that the terms of the agreement to manage your money would be a secret?  No rational person would and that should have been the first clue that something was wrong with the way public employees’ pension funds were being managed.

The GOP loves blaming public employee pensions for budget shortfalls. But Wall Street hedge funds control, and profit from, $3 trillion in N.C. alone.

When Ted Siedle a former investigator for the Securities and Exchange Commission was hired to look into the North Carolina Teachers’ and State Employees’ Retirement System, the seventh largest public pension fund in the country he found that it was not the government which was directly responsible for the under-performance of the fund, it was the Wall Street money managers who had brokered a sweet deal for themselves at the expense of the hard-working state employees who were depending on that fund to be there for them in retirement.

Siedle’s report found that:

“Today, TSERS assets are directly invested in approximately 300 funds and indirectly in hundreds more underlying funds, the names, investment practices, portfolio holdings, investment performances, fees, expenses, regulation, trading and custodian banking arrangements of which are largely unknown to stakeholders, the State Auditor and, indeed, to even the (State) Treasurer and her staff.  As a result of the lack of transparency and accountability at TSERS, it is virtually impossible for stakeholders to know the answers to questions as fundamental as who is managing the money, what is it invested in and where is it?”

The terms of these agreements are designed to be a win/win for the managers handling them and because they are guaranteed their very lucrative fees have little incentive to avoid risky investments of other people’s money.

The TSERS pension fund is not alone, public pension funds across the nation are in similar situations, while those managing them are reaping huge fees the funds lose money or make minimal gains.  Since 2000 fees for managing these funds have rocketed upward by over 1,000%, nearly doubling since 2008 from $217 million to $416 million.

This is a fight over the control of $3 trillion and as long as the Wall Street operatives are able to continue to reap the profits while hiding behind the secrecy built into these agreements we may never know the whole story.

Billions in Bonuses Given to Wall Street in 2013 Exceeds ALL Minimum Wage Workers’ Pay Combined

The only way to boost the American economy is to put more money into the hands of the rich, right? Wall Street firms did not disappoint the greedy hands of high-end suppliers such as Ferrari and Swiss watches when they passed out $26.7 billion dollars in bonuses for 2013, which is up a hefty 15% from last year.

Luxury product sales will no doubt increase from those bonuses. The rich get richer while the poor get poorer. That much money could have fed countless starving families across the country. It could’ve provided homeless people shelter for these remaining chilly weeks.

But no, the only logical way to boost the economy is to give big bonuses to people who already have busting bank accounts so they will invest their millions back in, right? Wrong. If this money had been placed in the hands of minimum wage workers, that cash would have spread throughout the economy because these people are using almost every dollar they earn to pay for their basic needs.

Author Sarah Anderson states, “According to my new report, every extra dollar going into the pockets of low-wage workers adds about $1.21 to the national economy. Every extra dollar a high-income American makes, by contrast, only adds about 39 cents to the gross domestic product (GDP)”. 

 

Anderson brings up a great point because not only are the rich getting richer, but also they are doing so at the expense of the entire country’s economic growth. Had these bonuses been placed in the pockets of low-wage workers, the growth of the economy would’ve remarkably increased by about $32.3 billion.

“There was just this kind of cult of more, more, more; grow, grow grow, and I think now the culture on Wall Street is fundamentally unhealthy.”