The House just passed the biggest bank deregulation bill in a generation

[FriendlyFire]

So the government allows the banks to leverage themselves 30:1, removal of oversight and now no bailouts
Third times the charm !

The House just passed the biggest bank deregulation bill in a generation

Spearheaded by House Finance Chair Rep. Jeb Hensarling (R-TX), the Choice Act begins by throwing out much of the banking oversight passed under President Barack Obama’s administration, mostly through the Dodd-Frank Act signed in 2010. But it goes further than that, rolling back oversight in a way that could dramatically exacerbate the likelihood of another financial crisis, according to experts in financial regulation.

It could also expose the hollowness of Trump’s campaign promises. Trump ran on slamming Wall Street for “getting away with murder” and arguing that Goldman Sachs had "bled our country dry."

But the bill looks to some like a wish list of what advocates and lobbyists for the banking industry have demanded. Among the provisions that have most alarmed progressives on the Hill is its proposed elimination of the “Volcker Rule,” which prevents commercial banks from making certain kinds of speculative and risky trades.

“Taxpayer bailouts of financial institutions must end, and no company can remain ‘too big to fail,’” said Hensarling, the bill’s lead author, in a statement. "Big banks on Wall Street aren't supporting [the Choice Act]. Perhaps that's because it ends Wall Street bail outs.”

Hensarling isn’t just making this stuff up: His bill would get rid of what’s called the Orderly Liquidation Authority, a key part of Dodd-Frank that controls what happens when financial firms that could sink the whole economy go belly-up.

Under OLA, the Federal Deposit Insurance Corporation can step in during a panic to immediately take control of the bank. So if JPMorgan is on the verge of going bankrupt, the federal government can declare an emergency and essentially take control of it overnight, to make sure its collapse doesn’t spread throughout the financial sector.

“A lot of what we’d call ‘center-right’ bankruptcy experts are very nervous about pulling OLA without a replacement

https://www.vox.com/2017/6/8/15762462/wall-street-house-republicans

 

[Timsup2nothin]

DOA in the senate.

 

[Ajidica]

Dead in the Senate.
Senate must be getting pissed at the House dropping all these turds in their lap.

 

[Timsup2nothin]

Dead in the Senate.
Senate must be getting pissed at the House dropping all these turds in their lap.

They just reconstitute the turds at leisure and drop them back. Just like nothing that can pass the house has a shot at passing the senate, when they rework it into something that can pass the senate it stands no chance when it goes back to the house. The hilarity of Republican "control."

 

[FriendlyFire]

Nuclear option on Filibusters ?
Problem SOLVED !

The Irony is that Trump is so desperate to sign something that hes staging pretend signing media events (infrastructure bill that dosnt exist) and the new Trumpcare

 

[Timsup2nothin]

Nuclear option on Filibusters ?
Problem SOLVED !

The Irony is that Trump is so desperate to sign something that hes staging pretend signing media events (infrastructure bill that dosnt exist) and the new Trumpcare

I think the Republicans in the senate know better. If they change that rule they really have no excuse for turning down the bills that come out of the house, and they know that the bills coming out of the house are generally insane. Senators have to take a longer view because of their six year terms. In the house they can say "we need to pass something so when I'm running for reelection I can point at it as an accomplishment." In the senate at least some of them have to look at the reality that if they pass something stupid it may very well have exploded by the time they are running for reelection.

 

[Perfection]

I think the Republicans in the senate know better. If they change that rule they really have no excuse for turning down the bills that come out of the house, and they know that the bills coming out of the house are generally insane. Senators have to take a longer view because of their six year terms. In the house they can say "we need to pass something so when I'm running for reelection I can point at it as an accomplishment." In the senate at least some of them have to look at the reality that if they pass something stupid it may very well have exploded by the time they are running for reelection.

They know better, but it's not because they're afraid of stuff blowing up in their faces. It's because the moment dems can manage a narrow majority in both houses and control the presidency they'll be unstoppable - and then it's game over for the Republican agenda. Remember, dems were the first to go nuclear. And since it's democrats who generally want to make sweeping legislative reforms having the Republicans remove one of their best means of putting up roadblocks would ultimately be self defeating.

Good article on the matter:
https://fivethirtyeight.com/features/nuking-the-filibuster-may-hurt-republicans-in-the-long-run/

 

[warpus]

So is this thing fully passed now or what's happening? I have more popcorn left but sometimes it's hard to follow American politics

 

[BvBPL]

It passed the lower chamber, but wouldn't go anywhere in the upper chamber.

 

[warpus]

So the Republicans in that chamber didn't think it was a good idea? What difference is between these two groups of Republicans that one said "Awesome idea!" and the other one said "This is no good"?

 

[Broken_Erika]

So the Republicans in that chamber didn't think it was a good idea? What difference is between these two groups of Republicans that one said "Awesome idea!" and the other one said "This is no good"?

I think it must be something in the air at the house. Or some mind control device installed below the house floor that blocks out common sense. Or House Republicans have their common sense surgically removed(I.E. Lobotomy)

 

[Azem.Ocram]

Personally, I'd love to see bailouts rid of. If giant banks fail, wealthy "investors" and retirees would combined lose billions if not trillions. This will make the money of the working class worth more (from deflation), evening the playing field. Tech companies with a lot of illiquid assets will come out on top, allowing a total restructuring of the economy. In a world with a trillion dollars taken out of circulation, property owners will be hurt the least. If it's bad enough, certain forms of debt will become uncollectable and some people will end up owning their house by default (since the holders of their mortgage debt would be gone).

 

[BvBPL]

Members of the House are more likely to be at extreme ideological ends because they represent limited geographic consistencies. Contrast with senators that represent whole states.

I'd love to see us get rid of bailouts too. Having a high capitalization requirements is a great way to determine institutions from risky investments that may subsequently necessitate a bailout.

 

[Cutlass]

Personally, I'd love to see bailouts rid of. If giant banks fail, wealthy "investors" and retirees would combined lose billions if not trillions. This will make the money of the working class worth more (from deflation), evening the playing field. Tech companies with a lot of illiquid assets will come out on top, allowing a total restructuring of the economy. In a world with a trillion dollars taken out of circulation, property owners will be hurt the least. If it's bad enough, certain forms of debt will become uncollectable and some people will end up owning their house by default (since the holders of their mortgage debt would be gone).

Great Depressions mean dead working class people.

 

[Azem.Ocram]

Great Depressions mean dead working class people.

Massive unemployment in a society where an income requires a job means starving unemployed masses (former workers). Automation is already capable of taking the majority of jobs in existence. The only reason it hasn't is a cultural/societal one (we as a civilization are unprepared for an economy where corporations are highly productive without employees). Giant banks failing without bailouts would make a shock that could better prepare us for a post-job economy.

 

[Cutlass]

Preparing for a 'disaster' by staging an actual disaster is massively stupid and irresponsible.

 

[El_Machinae]

By far and away, the mistake was that we bailed out the wrong group. It's because people just have a hard time with the various money theories. The governments rescued the super-rich from the Crash, and then begged them to help real people. As if.

Bailing out the people would've worked out fine. I mean, a bunch of redistributional stuff amongst of people would have happened. Buncha pissed off people, for sure. But not this massive wealth transfer upwards that we got.

 

[Cutlass]

The real failure was failing to make a distinction between bailing out the banks, and bailing out the owners of the banks. One does not require the other.

 

[VicRatlhead5199]

I just love how they placate the uneducated masses with this idiocy. "Businesses can't currently get loans. If we remove all regulations, jobs will....um....happen"

 

[El_Machinae]

Right now, the economy is being inefficiently buoyed using consumer debt. Businesses getting loans is a great way to stimulate an economy. With the way money-printing works in the States, goals of getting businesses to take on loans is of net benefit.

It's the distributional effect of the profits of those loans that matters, along with the relative risk burden.

The real failure was failing to make a distinction between bailing out the banks, and bailing out the owners of the banks. One does not require the other.

Or even, since so many of the owners are actually pension funds, bailing out the employees vs the owners. But that's neither here nor there. Bailing out home owners would have effectively bailed out the banks.

Buying out the bad debt and then (essentially) forgiving it is fine, it will wobble distributional effects, but ehn. But if there's a mound of cash to be hounded out, there's no reason why it had to be handed to the owner of the bad debt instead of the indebted person.