At the Behest of Wall Street, House of Reps Votes to Repeal Dodd-Frank

Two years after the financial collapse of the derivatives market in 2008, a few modest reforms were institued through the passage of the Dodd-Frank law. It stated simply that derivatives, as a risky financial instrument, should be placed in separate accounts not insured by the federal government, thereby ensuring the American taxpayer will not be on the hook for what is essentially a Wall Street betting ring.

But Wednesday, on the heels of their spectacularly failed Affordable Care Act repeal - and their successful shut down of the United States government - House Republicans decided their bold change of course would be to attack the most vital financial protection of the decade. Voting 292-122 to repeal Dodd-Frank, the House cemented its status as one of the world's most careless governing bodies.

Here's the surprising part, from the New York Times:

But the vote Wednesday, which included the support of 70 House Democrats, followed months of intense lobbying by Wall Street banks. The banks and lawmakers who support the proposal hope that the bipartisan support the bill received in the House will send a strong message to the administration to tread carefully as it drafts the remaining regulations necessary to fully enforce Dodd-Frank.

Wall Street's lobbying arm was able to convince 70 "Blue Dog" Democrats that any sort of market regulation is indeed bad for the economy writ large. Now, here's the unsurprising part:

Citigroup lobbyists drafted more than 70 of the 85 lines of the House bill, as they tried to develop language that Democrats and Republicans on the Financial Services Committee could support.

Don't think for a second that Citigroup had a hand in the drafting because of their masterful control of the English language. Money, rather, is doing the writing:

MapLight analysis of campaign contributions to members of the House of Representatives from interest groups supporting and opposing H.R. 992 from January 1, 2011—December 31, 2012. Data source: OpenSecrets.org

  • Citigroup has given $503,150 to current members of the House of Representatives.
  • Representative Jim Himes, D-Conn., has received $66,450 from Citigroup, more than any other member of the House of Representatives. Himes is a co-sponsor of the bill.
  • Co-sponsors of the bill have received, on average, 16.8 times more money from Citigroup than have members of the House who have not signed on as co-sponsors.
  • Speaker John Boehner, R-Ohio, has received $917,500 from interests supporting the bill, more than any other member of the House of Representatives.
  • Representative Randy Hultgren, R-Ill., the primary sponsor of the bill, has received $136,500 from the Securities and Investment industry, more than from any other industry.

This vote represents a complete reversal of one of the few bright spots of the post-collapse period. Remember, the market lost billions and brought our economy to the brink of a collapse not seen since the Great Depression. It was a direct result of the unregulated, Wild West culture of the derivatives market at the time. To desire that again, or to forget the millions of jobs lost and homes foreclosed upon, is the very definition of delusional.

“America’s economy remains stuck in the slowest, weakest nonrecovery recovery of all times,” said Representative Jeb Hensarling, Republican of Texas, the chairman of the House Financial Services Committee. “Those who create jobs for America are drowning in a sea of red tape preventing them.”

Excuse us? "Those who create jobs"? These were the banks that bled us dry. These were the people who lost us our jobs. And the House wants to grant a pardon? Coupled with a limo ride home from pokey? The back of the American taxpayer can only hold so much weight.

There's a bright side to all this, though. The more the House codifies their pro-Wall Street agenda, the more they relegate themselves to insignificance. If there was a way this Congress could take itself any lower than an already abyssmal (and historic!) 22% approval rating, this is it.

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