One of the first votes attempted by the enlarged Republican majority in the House of Representatives was barely defeated, as they attempted to pass a bill with provisions to weaken the anemic Dodd-Frank bill passed to rein in speculation by big banks and Wall Street after the financial crash of 2008. The House leadership tried to pass their bill through a suspension of the rules. That maneuver requires a 2/3rds vote of all members, and I suppose the GOPers thought there were enough Democrats beholden to Wall Street to get it passed. They were wrong, but two Virginia Democrats joined 33 of their colleagues and voted with the Republicans, Gerry Connolly (D-11) and Don Beyer (D-8). (By the way, a suspension of the rules would have meant the bill couldn’t be amended or debated. “Democratic,” huh?)
Why was this bill so lousy for the average American? For starters, it would have let banks keep collaterized loan obligations (CLOs) for two more years, in essence gutting the Volker rule that made it illegal for banks to gamble their depositors’ money on risky securities trades. CLOs are similar to those pooled mortgages that proved worthless and helped destroy our economy. It’s estimated that about 95 percent of those CLOs are held by banks with at least $50 billion in assets. (Can anyone say, “Too big to fail”?)
Lest we think this is the first try at undoing the regulation of giant banks following the crash of 2008-2009, most Americans don’t realize that the omnibus budget bill passed in the last days of the previous Congress (when Democrats still controlled the Senate) allowed subsidized derivatives, the very things that formed the heart of the credit collapse in 2008. That trick allows big banks to keep borrowing from the Fed to finance such derivatives. This latest attempt was simply trying to put more nails in the coffin of financial reform and regulation.
GOPers even had a provision in their poison-to-the-consumer bill that would have enabled large corporation to stop releasing their annual reports in computer-friendly formats, thus making it more difficult for prospective investors to make informed judgments about whether to invest in them or not. Now to my main question: Why did Gerry Connolly (D-11) and Don Beyer (D-8) vote with the Republicans?
Looking at the voting record of Gerry Connolly, there is no bias in favor of large banks. In fact, the website, ontheissues.org, calls Connolly a “liberal populist.” Voting for this bill’s quick passage is NOT a liberal populist position, Gerry.
Don Beyer doesn’t seem beholden to huge banking contributions, either. Beyer’s vote is a personal disappointment for me. I first met Don when he was the national treasurer for Howard Dean’s 2004 campaign for the Democratic nomination for president. Don was completely on board with the progressive, anti-corporate governance platform that Howard Dean espoused, and I had great respect for him. I can’t reconcile that Don Beyer with this vote.
I have no doubt that when, not if, this bill is brought up in the regular order of House business, it will pass, probably with 35 or more Democratic votes. It will probably pass in the Senate, as it is unlikely that there will be 41 Democratic votes to filibuster it. President Obama will probably sign it, especially in light of the fact that he lobbied Democrats in December to pass the omnibus budget bill that began the process of dismantling Dodd-Frank.
Folks, we no longer have a representative democracy. Welcome to the Second Gilded Age.
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