The Senate Banking committee started hearings on the recent problems at JP Morgan (which even Mornan’s chairman said were “sloppy” and “stupid” and would increase the pressure for additional regulation). But thanks to generous donations of campaign cash, the hearing got turned into a circus. Committee members weren’t about to actually, you know, investigate any possible problems at JP Morgan. Instead, they were more interested in blaming government regulations for the problems, especially the recent Dodd-Frank bill.
Richard Shelby (R-AL) grilled the regulators, mocking them repeatedly for not knowing in advance what was going on at JP Morgan. (JP Morgan contributed $72,950 to Senator Shelby, making them his second largest source of campaign money).
Bob Corker (R-TN) predicted “the American people are going to wake up” and realize “this Dodd-Frank bill really doesn’t address real-time issues.” (Corker received $61,000, making JP Morgan his largest source of money).
Mike Johanns (R-NE) complained that “regulations become more and more onerous.”
Pat Toomey (R-PA) declared that “we’ve gone down the wrong road” with Dodd-Frank.
There’s just one problem with these statements. The part of Dodd-Frank that would have prevented what happened at JP Morgan is the “Volcker rule“, which attempts to separate speculation and monetary gambling from their government-backed deposits, similarly to the Glass-Steagall law that was repealed in 1999. And the Volcker rule hasn’t been implemented yet, mainly because of Republican efforts to water it down through exemptions and by defunding it.
So the Republicans are trying to abort the Volcker rule before it is even implemented, by blaming it instead of the bankers who actually caused the problem. And even though SEC chairman Mary Schapiro testified that JP Morgan would have been more easily monitored “if the Dodd-Frank rules had been in place.”
But the most ironic thing was Toomey’s solution to the problem. He wants to “let the people in the marketplace make the decisions they will make.”
Yeah, that’s what caused the great recession in 2008. I guess the Republicans like to think of that as the good old days.