Truthdig's Scheer: Wall Street Banks Subverting Financial Regulations

Thursday, 30 May 2013 07:53 AM

By Michael Kling

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The same Wall Street banks that caused the financial crisis and Great Recession are subverting government regulations designed to prevent another financial meltdown, according to Robert Scheer, editor in chief of Truthdig.

At stake is the government's attempt to rein in the humungous derivatives trading market that was instrumental in causing the financial crisis. Writing in his column on Truthdig, Scheer cited a New York Times article that states Citigroup, which received a $45 billion taxpayer bailout, essentially wrote a bill that was approved by the House Financial Services Committee.

Citigroup's recommendations were included in 70 of the bill's 85 lines, according to The Times, and the committee accepted two critical paragraphs practically word for word.

Editor's Note:
Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

That, Scheer wrote, should "stand as the defining epitaph for the death of representative democracy."

Financial institutions gave legislators who supported bills backed by Wall Street twice as much in donations as did lawmakers who opposed them, The Times reported, citing data from the non-profit group MapLight.

Rep. Jim Himes, D-Conn., who supported the bill, noted the conflict of legislators who write banking legislation and also accept campaign contributions from banks.

"It's appalling, it's disgusting, it's wasteful and it opens the possibility of conflicts of interest and corruption. It's unfortunately the world we live in," Himes, who previously worked for Goldman Sachs, told The Times.

Scheer responded: "No, buddy, it's the world you guys make and wallow in. Other folks just lose their jobs and homes while you manage to slither out of the slime richer and more powerful than ever."

Others are also criticizing Wall Street banks' influence over Congress. Robert Reich, former Secretary of Labor under Bill Clinton, says the bill shows that Democrats cannot be trusted to control Wall Street.

Most Democrats on the finance committee received sizeable donations from banks and supported the bill, Reich wrote on his blog.

Plus, top Obama officials such as Treasury Secretary Jack Lew and former Office of Management and Budget Director Peter Orszag either previously held or are currently holding jobs at Citigroup.

"Who needs Republicans when Wall Street has the Democrats? With the help of congressional Democrats, the Street is rolling back financial reforms enacted after its near meltdown," Reich said.

"Democrats can’t be trusted to control Wall Street. If there were ever an issue ripe for a third party, the Street would be it."

Editor's Note: Economist Unapologetically Calls Out Bernanke, Obama for Mishandling Economy. See What They Did

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