The financial crisis that nearly torpedoed the global economy began in earnest three years ago today with the bankruptcy of the investment house Lehman Brothers. One day later, mega-insurer American International Group Inc. was bailed out by the U.S. government to the tune of $85 billion.
Lehman’s 2008 bankruptcy was the largest in American history, and the credit panic that followed it set the stage for the the $700 billion Troubled Asset Relief Program and the myriad lending programs put in place by the Federal Reserve to save the biggest financial institutions on Wall Street (and beyond) from the consequences of their own bad behavior. The Great Recession that resulted from Wall Street’s malfeasance cost 14 million people their jobs
Despite the ongoing pain still being felt by the American people — with the foreclosure rate continuing to climb — congressional Republicans have been fighting the implementation of the Dodd-Frank financial reform law tooth and nail. Earlier this week, the GOP’s presidential candidates even called for the law’s full repeal, in order to “free up” Wall Street. Watch a compilation:
Here are just a few ways in which the GOP is preventing Dodd-Frank from moving forward:
— CUTTING FINANCIAL REGULATION BUDGETS: The House GOP passed a 15 percent cut to the budget of the Commodity Futures Trading Commission (CFTC), which faces the gargantuan task of overseeing the market for derivatives, the credit instruments that the Financial Crisis Inquiry Commission said were “at the center” of the 2008 crisis. Senate Minority Leader Mitch McConnell (R-KY) has argued that “the less we fund those agencies, the better America will be.”
— OBSTRUCTING THE CONSUMER PROTECTION BUREAU: Senate Republicans refuse to confirm any director for the Consumer Financial Protection Bureau, which Dodd-Frank created, until changes are made to the agency’s structure that would render it a second-class regulator, subservient to the federal bank regulators that refused to rein in Wall Street excess before the 2008 crisis, and make its budget subject to congressional shenanigans.
When the GOP first won its House majority, now House Financial Services Committee Chairman Spencer Bachus (R-AL) explained that, in his view, Washington’s role is “to serve the banks.” And at the moment, Wall Street banks are pulling in record profits.
The Center for Public Integrity has found that “the Street and other financial institutions engaged about 3,000 lobbyists to fight Dodd-Frank – more than five lobbyists for every member of Congress – and have hired almost the same number to delay, weaken, or otherwise prevent its implementation.” And when it comes to the GOP, that investment appears to be paying off.