Friday, December 12, 2014

The Fall

The 1,600 page omnibus bill just passed by the US House of Representatives contains a deregulation provision (in a spending bill!) that removes the "push out" rule instituted in Section 716 of the Dodd-Frank Act.  Specifically, this regulation requires banks and financial institutions covered by the FDIC (you and me) to push any derivative-based trading in the form of credit default swaps and specifically those based in securities, out to affiliate businesses not underwritten by taxpayers via the FDIC. 

Both The New York Times and Mother Jones had previously uncovered that the new retrograde bill's language was written by Citigroup lobbyists. 

This very risk-increasing bill, which reintroduces systemic risk to the financial system - risk that will be underwritten again by taxpayers - had died in the Senate as a stand-alone measure. A few Democrats and many Republicans sponsored it and helped push it through the House as part of this $1.013 trillion omnibus spending bill. Plutocracy, plain and simple. 

In addition, the bill includes a rider - one which evaded public debate - that astronomically increases the upper limit for individual donors to political party committees by eightfold.  For national elections in the US, both major parties have three campaign committees to which individuals can contribute $32,400 per, totaling $97,200 for a party.  The stealthily injected rider increases the $97,200 limit to $777,600, 14 times the US median income for individuals, or 17.3 times the National Average Wage Index.     

Adding insult to injury, the rider was literally snuck in at the end and placed on page 1599 of the 1603 page bill.  It is difficult to not be alarmist and to escape what might otherwise seem hyperbole: the Republic as we know it, has fallen.  It seems clear at this point in history that this fall can only be remedied by popular uprising and the replacement of the two-party system that maintains a vice grip on the common citizens of the United States.  What is not clear at all is how this can or will happen.

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