Apr 27th 2010

Republicans Are So Drunk on Wall Street Money That They’re Driving Off a Political Cliff

by Robert Creamer

Robert Creamer is a long-time political organizer and strategist and author of the recent book: "Stand Up Straight: How Progressives Can Win," available on amazon.com.
You see it all too often - a grisly news story about a kid who runs his car off a cliff. We ask, "how could he have done it, how could he have been so reckless?" The answer invariably comes back: because he was drunk.

The same thing just happened to the Republicans in the Senate. Last night, to a person, like lemmings, every Republican Senator followed their leadership over a political cliff. They all voted against even debating a bill to hold the big Wall Street banks accountable. And the reason: they were drunk on Wall Street money.

It's really quite remarkable. Polls show two-thirds of the electorate strongly in favor of legislation to hold the big Wall Street banks accountable. And its not surprising, since most Americans believe - correctly - that the recklessness of the big Wall Street banks cost eight million Americans their jobs -and cost millions more their savings and pensions.

Americans are furious that -- after coming with tin cups in their hands to the taxpayer, and receiving the largest bailout in world history - these same huge banks are gorging themselves on billions in profits. They are furious that their CEO's and traders are stuffing ten-million-dollar bonuses in their pockets and flying off to celebrate in the South of France, while millions of Americans are still struggling to replace the jobs that these "masters of the universe" destroyed.
Remember that this vote comes in the midst of daily news stories about how the Big Kahuna of the Wall Street banks - Goldman Sachs - made billions by betting against the American housing market, and selling investors securities that were selected to fail.

The thing that is so outrageous to most Americans about the Goldman Sachs story isn't their guilt or innocence of securities fraud. The whole story puts on public display what these big Wall Street banks actually do for a living. They don't make loans to businesses or individuals - they gamble. People ask themselves, "We bailed these guys out so they could keep on gambling?" Might as well have bailed out a bunch of casinos or racetracks.

So in the midst of all of this, the Republicans vote as a block against holding the big Wall Street banks accountable? Many Democratic strategists are gleeful. This is like shooting fish in a barrel. The Washington Post headline read: "Financial overhaul blocked by GOP".

You can generally count on politicians to do things that at least appear to be in their political interests - but not when their judgment is distorted by drink. Not when they are so drunk on Wall Street's money.

Just two weeks ago, Senate Majority Leader Mitch McConnell took Senator John Cornyn (the chief Senate Republican fundraiser) and went off to Wall Street to get their marching orders. Their big problem is that the transaction is right out in the open for everyone to see.

Let's face it, the spectacle of Senator Olympia Snowe being lead around with a ring in her nose by Mitch McConnell and his Wall Street buddies is just downright embarrassing.

And the unabashed hypocrisy of Massachusetts Senator Scott Brown - who was elected as a tribune of the middle class - bowing and scraping to Wall Street is politically suicidal.
Now Senate Majority Leader Reid has made clear that the Senate will continue to take cloture votes on this issue until Republicans come to their political senses and vote to allow debate on this bill.

The bottom line is this: in the end the Senate will pass a bill to hold the big Wall Street banks accountable. They will pass such a bill because the public demands it, and because the Obama Administration and Democratic leadership understand they have such high political ground on this issue that they have no incentive to compromise on anything material.

So the only question for the Republicans is how long will it take for them to get tired of being publicly dragged, kicking and screaming, to support reform. The longer it takes, the more their marriage to Wall Street will be seared into the mind of the voters. So much the better for Democrats.

But for the country, it's a different matter. Way back in 2002, mega-investor Warren Buffet warned that the lack of regulation of Wall Street bets on derivatives were "financial weapons of mass destruction… and time bombs (threatening) the whole economic system."

In 2008, those bombs exploded wiping out 8 million American jobs and trillions of dollars in savings. The fallout from that explosion devastated most of America.

But after their taxpayer bailout, Wall Street bankers went right back to building new financial time bombs and giving out billions in bonuses.

Today the rest of us are once again in grave economic danger from unregulated derivatives capable of destroying the U.S. economy all over again.

The timebomb Buffett warned us of is still ticking. Every day the Republicans delay, they put America at risk.

Robert Creamer's recent book:  “Stand Up Straight: How Progressives Can Win,” available on Amazon.com.


Browse articles by author

More Current Affairs

Apr 11th 2021
EXTRACT: "Some presidents indulge in the “Mount Rushmore syndrome” making an obvious effort to achieve greatness. Normally soft-spoken and apparently modest Biden is making his own bid for immortality."
Apr 9th 2021
EXTRACT: "New ways of thinking about the role of government are as important as new priorities. Many commentators have framed Biden’s infrastructure plan as a return to big government. But the package is spread over eight years, will raise public spending by only one percentage point of GDP, and is projected to pay for itself eventually. A boost in public investment in infrastructure, the green transition, and job creation is long overdue."
Apr 7th 2021
EXTRACT: " One can, and perhaps should, take the optimistic view that moral panics in the US blow over; reason will once again prevail. It could be that the Biden era will take the sting out of Trumpism, and the tolerance for which American intellectual life has often been admired will be reinvigorated. This might even happen while the noxious effects of American influence still rage in other countries. For the sake of America and the world, one can only hope it happens soon.  "
Mar 28th 2021
EXTRACT: "By refusing (despite having some good reasons) to end electoral gerrymandering, Chief Justice John G. Roberts, Jr., has directly enabled the paralyzing hyper-partisanship that reached its nadir during Donald Trump’s presidency. By striking down all limits on corporate spending on political campaigns in the infamous 2010 Citizens United decision, he has helped to entrench dark money in US politics. And by gutting the 1965 Voting Rights Act in Shelby County v. Holder, Roberts has facilitated the racist voter-suppression tactics now being pursued in many Republican-controlled states."
Mar 24th 2021
EXTRACT: "the UK’s tough choices accumulate, and the problems lurking around the corner look menacing. Britain will have to make the best of Brexit. But it will be a long, hard struggle, all the more so with an evasive fabulist in charge."
Mar 15th 2021
EXTRACT: "Over the years, the approach of most American policymakers toward the Israeli-Palestinian conflict has been Israel-centric with near total disregard for the suffering endured by the Palestinian people. The architects of policy in successive US administrations have discussed the conflict as if the fate of only one party (Israel) really mattered. Israelis were treated as full human beings with hopes and fears, while Palestinians were reduced to a problem that needed to be solved so that Israelis could live in peace and security.  ..... It is not just that Israelis and Palestinians haven’t been viewed with an equal measure of concern. It’s worse than that. It appears that Palestinians were judged as less ​human than Israelis, and were, therefore, not entitled to make demands to have their rights recognized and protected."
Mar 8th 2021
EXTRACTS: "XThere’s a global shortage in semiconductors, and it’s becoming increasingly serious." ...... "The automotive sector has been worst affected by the drought, in an era where microchips now form the backbone of most cars. Ford is predicting a 20% slump in production and Tesla shut down its model 3 assembly line for two weeks. In the UK, Honda was forced to temporarily shut its plant as well." ..... " As much as 70% of the world’s semiconductors are manufactured by just two companies, Taiwan Semiconductor (TSMC) and Samsung."
Mar 5th 2021
EXTRACT: "Back in 1992, Lawrence H. Summers, then the chief economist at the World Bank, and I warned that pushing the US Federal Reserve’s annual inflation target down from 4% to 2% risked causing big problems. Not only was the 4% target not producing any discontent, but a 2% target would increase the risk of the Fed’s interest-rate policy hitting the zero lower bound. Our objections went unheeded. Fed Chair Alan Greenspan reduced the inflation target to 2%, and we have been paying for it ever since. I have long thought that many of our economic problems would go away if we could rejigger asset markets in such a way as to make a 5% federal funds rate consistent with full employment in the late stage of a business cycle."
Mar 2nd 2021
EXTRACT: "Under these conditions, the Fed is probably worried that markets will instantly crash if it takes away the punch bowl. And with the increase in public and private debt preventing the eventual monetary normalization, the likelihood of stagflation in the medium term – and a hard landing for asset markets and economies – continues to increase."
Mar 1st 2021
EXTRACT: "Massive fiscal and monetary stimulus programs in the United States and other advanced economies are fueling a raging debate about whether higher inflation could be just around the corner. Ten-year US Treasury yields and mortgage rates are already climbing in anticipation that the US Federal Reserve – the de facto global central bank – will be forced to hike rates, potentially bursting asset-price bubbles around the world. But while markets are probably overstating short-term inflation risks for 2021, they do not yet fully appreciate the longer-term dangers."
Feb 28th 2021
EXTRACT: "To be sure, calls to “build back better” from the pandemic imply some awareness of the need for systemic change. But the transformation we need extends beyond constructing modern infrastructure or unlocking private investment in any one country. We need to re-orient – indeed, re-invent – global politics, so that countries can cooperate far more effectively in creating a better world."
Feb 23rd 2021
EXTRACT: "So, notwithstanding the predictable release of pent-up demand for consumer durables, face-to-face services show clear evidence – in terms of both consumer demand and employment – of permanent scarring. Consequently, with the snapback of pent-up demand for durables nearing its point of exhaustion, the recovery of the post-pandemic US economy is likely to fall well short of vaccine development’s “warp speed.” "
Feb 20th 2021
EXTRACT: "Human rights abuses under Erdogan are beyond the pale of inhumanity and moral decadence. The list of Erdogan’s violations and cruelty is too long to numerate. The detention and horrifying torture of thousands of innocent people for months and at times for years, without being charged, is hard to fathom. Many prisoners are left languishing in dark cells, often in solitary confinement. The detention of tens of thousands of men and hundreds of women, many with their children, especially following the 2016 failed coup, has become common. It is calculated to inflict horrendous pain and suffering to bring the prisoners to the breaking point, so that they confess to crimes they have never committed."
Feb 20th 2021
Courtyard of the Amsterdam Stock Exchange, circa 1670, (Job Adriaenszoon Berckheyde).
Feb 12th 2021
EXTRACT: "Global regulators will no doubt be concerned about a potential volatility spillover from digital asset prices into traditional capital markets. They may not permit what could quickly amount to effective proxy approval by the back door for companies holding large proportions of a volatile asset on their balance sheets."
Feb 11th 2021
EXTRACT: "Since Russians began protesting opposition leader Alexei Navalny’s imprisonment, the security forces have apparently had carte blanche to arrest demonstrators – and they have done so by the thousands. If Russians so much as honk their car horns in solidarity with the protesters, they risk personal repercussions. The official response to the protests goes beyond the Kremlin’s past repression. It is war."
Feb 6th 2021
EXTRACT: ".......like Biden, Roosevelt was certainly no revolutionary. His task was to save American capitalism. He was a repairer, a fixer. The New Deal was achieved not because of Roosevelt’s genius or heroism, but because enough people trusted him to act in good faith. That is precisely what people are expecting from Biden, too. He must save US democracy from the ravages of a political crisis. To do so, he must reestablish trust in the system. He has promised to make his country less polarized, and to restore civility and truth to political discourse. In this endeavor, his lack of charisma may turn out to be his greatest strength. For all that he lacks in grandeur, he makes up for by exuding an air of decency."
Feb 2nd 2021
EXTRACT: "Europe must not lose sight of the long game, which inevitably will center on China, not Russia or relations with post-Brexit Britain. China is already establishing a presence in Iran, and demonstrating that it has the capital, know-how, and technology to project power and influence beyond its borders. Should it succeed in turning the Belt and Road Initiative into a line of geopolitical stepping-stones, it might soon emerge at Europe’s southeastern border in a form that no one in the EU foresaw."
Jan 29th 2021
EXTRACT: "One sign of this change is that, unlike all recent Democratic administrations, Biden’s hasn’t paid obeisance to Wall Street by giving bankers top jobs. The new Secretary of the Treasury, Janet Yellen, is a former Federal Reserve chair and academic who has made it clear that she understands the country’s pressing social needs. Moreover, Biden consulted Warren on her economic views, and has named a former Warren adviser as Yellen’s deputy. Yellen’s appointment demonstrates that Biden shares the insight that enabled Trump’s rise: that too many Americans feel that they cannot get a fair share. "
Jan 24th 2021
EXTRACT: "Barack Obama cautioned in his final speech as president that, “Our democracy is threatened whenever we take it for granted.” Yet isn’t that exactly what America has been doing? In a decade punctuated by the global financial crisis, the COVID-19 crisis, a racial-justice crisis, an inequality crisis, and now a political crisis, we have only paid lip service to lofty democratic ideals. ... Sadly, this complacency has come at a time of growing fragility for the American experiment. Internet-enabled connectivity is dangerously amplifying an increasingly polarized national discourse in an era of mounting social and political instability. The resulting vulnerability was brought into painfully sharp focus on January 6. The stewardship of democracy is at grave risk. "