House Passes Deregulation Bill Written by Citigroup

[n2doc]

By Jessica Desvarieux

BILL BLACK, ASSOC. PROF. ECONOMICS AND LAW, UMKC: Thank you.
DESVARIEUX: So, Bill, what are you working on this week?

BLACK: So I'm dealing with the effort--primarily by Republicans, but with strong support from Democrats--to gut the Dodd-Frank act. So this has multiple parts, but the one I'm going to concentrate on is the passage of or attempted passage of legislation that would remove the protections that Dodd-Frank tried to put in place. And remember, Dodd-Frank didn't put a whole lot of effective protections in place.

So two big things that Dodd-Frank didn't do are coming back to bite it. Dodd-Frank didn't simply repeal the repeal of Glass-Steagall and reintroduce that law that had separated commerce and banking, and in Dodd-Frank they didn't simply repeal the Commodity Futures Modernization Act of 2000, which had created the massive regulatory black hole on financial derivatives. But there were specific provisions that had elements of Glass-Steagall and elements of giving regulatory authority over financial derivatives that were put into the Dodd-Frank bill. And the big banks, working to some extent with the big corporations, are making an enormous effort to get rid of these protective portions of the law.

So the one I'm going to focus on is the one that was driven by Citibank that would allow a wide range of financial derivatives to be done directly by the bank, which is to say, the insured entity, which is to say, the government would be on the hook if there were losses. And Dodd-Frank was designed to prevent or at least dramatically minimize that. So this is a truly awful bill.

And we talked about it earlier. An analysis of the 80 lines of the bill when it was first introduced showed that 75 of them were written by Citicorp, including entire paragraphs in which the only thing changed was to make some words plural by Congress. And this has been adopted by the House of Representatives by a greater than two-to-one margin, with virtually all Republicans supporting it and 70 Democrats supporting it. And there's been a study that shows the people that are cosponsoring this kind of bill get $18 from the banking industry and finance industry for every $1 that goes from that industry to people who oppose the bill. So you get what you pay for type of thing.

And, by the way, this is one of eight bills that the House has passed. This particular bill probably won't become law this year, because the Obama administration has said it's not in favor of it, and simply the time of the year and such.

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http://truth-out.org/news/item/19763-house-passes-deregulation-bill-written-by-citigroup

[spanone]

1. k&r...

[tularetom]

2. I'm shocked - shocked - that corruption is going on in here!

[PoliticAverse]

3. Is it called the Privatize the Profits, Socialize the Losses Act? n/t

[polichick]

4. Fits perfectly.

[liberal N proud]

5. The fox building the fence around the hen house.

[Rex]

6. Plutocracies work that way, the business community

directly writes public policy to benefit the owners. The middle class goes extinct and the poverty rate skyrockets. Food riots occur, the ruling class does away with public safety nets. The number of homeless goes way up.

[Baitball Blogger]

7. Can we expect the Senate to do the right thing?

[MisterP]

8. Kochie liars have infiltrated academia! it's called CitiCares because Citi cares!

[Scuba]

9. The rest of us, meanwhile, are given but a single option ...