Privatize the Gain / Nationalize the Pain

 

 

December 18, 2014

What the above headline means is that, once again, when Wall Street takes big risks and wins, it will keep the  money.  But when the risk implodes, as it did with AIG and Lehman Brothers,  taxpayers will take the loss via taxpayer funded FDIC guarantees to the ” Too Big to Fail ” banks…..Citicorp, JP Morgan Chase,  Bank of America, Wells Fargo and  Goldman Sacks.

Is this a laugher…or what ?  And, it gets much, much better !.

On Thursday night the Republican controlled House  passed the Omnibus Spending Bill which funds the federal budget  through September 2015.  Next, the bill goes to the Republican controlled Senate where it is expected to pass.

What is at issue is a last minute  amendment inserted in  the Omnibus Bill  which voids the very important” push out ” provision included in Dodd Frank regulatory legislation .

Dodd Frank pushed the riskiest bank derivative bets out from under the protective FDIC umbrella ( held by you ) ,  to new,  non bank  entities which would shoulder the entire risk for any bets made using risk money raised separately  for such specific  purpose. If the inserted ( voiding )  amendment passes the Senate, it will allow the big five banks to make any bet they want knowing the FDIC will guarantee their loss.

The amendment with no hearing, no chance of further modification and no debate was inserted into a major piece of legislation, Omnibus,  by a lame duck House.

The big five ” too big to fail ” banks control 90% of the risky multi trillion dollar derivatives market so there is a lot of bonus money at stake ( if they win their bets ) and a downside only for taxpayers such as you ,  if they lose.  They want to be in this game, but with your skin in it , not theirs !!

It gets better….

It is said that Citicorp’s main Washington lobbyist  wrote the actual language of the amendment ! !!.. and then found someone,   Congressman Kevin Yoder, Republican, Kansas ) to put his name on the amendment and submit it.  Yoder is known to be heavily dependent on political contributions from financial interests.  Ever since his name has emerged tied to this amendment he has become invisible and reportedly  refuses to answer  any  and all questions relating to his motives for  his involvement,  given  this  type of legislation has almost  no relevancy  to the agenda  of the Kansas farming community he represents.

It is being reported that many of his constituents are leaving less than gracious messages on his Facebook page ! It is also being said that he is counting on this blowing over by the time he comes up for re-election.

Bottom line, after reading this blog, it should be causing you to have some anxiety  about the linkage between Wall Street and Washington DC,  and the revolving employment  door between Banks, the Congress and Lobbyists.

What to do?   Make absolutely certain this amendment gets a good airing in the Senate by contacting your Senator and letting him know how you feel about you  guaranteeing Wall Street’s bets!

And, if you need even more motivation to contact your Senator, read the speech given on the Senate floor by Democratic Senator , Elizabeth Warren, Massachusetts. Just Google her name and look for  the Huff Post article “The Speech that Could Make Elizabeth Warren the Next President of the United States”  . You will have the option to read or listen to the speech !

Senator Warren comes off as  a bristling REFORM fighter ( ex Harvard Law Professor ). I would love to watch her in a debate with Hillary and then , Jeb. !!

Richard Maurice Gore

 

 

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