Financial Crash Amnesia in the House
As unemployment brought on by the recession still hovers around 9 percent, most ordinary folk in the U.S. are not in danger of forgetting the experience, or the financial crisis at its start, anytime soon. But several bills in the House of Representatives are showing financial crash amnesia, trying to water down hard-won financial reforms.
One, by Rep. Bachus, would foster gridlock at the Consumer Financial Protection Bureau by putting it under a five-person committee, rather than a single leader. Another would give regulators the ability to block consumer financial protections. As Americans for Financial Reform put it:
If enacted, these bills would virtually guarantee that the CFPB would be a weak and timid agency without the will or ability to stand up for the public and curb the kind of financial abuses that caused the nation's worst financial crisis since the Great Depression.
And there are more bad ideas on the House docket. Even as gas is around $4 a gallon -- partly due to speculation running even higher than during the food and oil price bubble of 2008 -- Rep. Bachus has proposed delaying the reform already passed in this area. He wants to countermand Congress' decision for reform to take effect quickly on "derivatives" -- which, as you may recall, went spectacularly toxic in 2008; derivatives also include oil and food-related speculation which drives up prices for those things. And, by the way, derivatives also include a toxic asset that has driven a county in Bachus' district to the brink of bankruptcy, as Stop Gambling on Hunger points out:
When Congress passed [financial reform], it requested that limits on commodity speculation be implemented earlier than any other reforms due to the urgency of getting excessive speculation under control. It is especially ironic that Bachus would present such a bill when Jefferson County, in his district, was brought close to bankruptcy because of unregulated derivatives. Though perhaps the fact that Bachus received more donations from the financial sector than any other member of Congress has something to do with his decision to sponsor the bill.
Elizabeth Palmberg is an associate editor of Sojourners.