Those who created the banking crisis are also the most powerful lobby on Capitol Hill
Tuesday, June 2, 2009
The Democratic Chairman of the Agriculture Committee yesterday announced to the press that “The banks run the place,” in reference to the US Congress. He is the second notable elected official to speak out in recent weeks over the gross and institutionally corrupt conflict of interest on Capitol Hill.
“I will tell you what the problem is,” Collin Peterson told the New York Times, “they give three times more money than the next biggest group. It’s huge the amount of money they put into politics.”
Peterson is pushing for legislation to regulate derivatives trading. His proposed bill would limit derivatives trading to public exchanges, rather than private clearinghouses, which are managed by banks.
In this sense he directly opposes the proposal of Treasury Secretary Timothy Geithner, to have the transactions monitored by the New York branch of the Federal Reserve, a move also (coincidentally?) proposed by the heads of the banking industry.
Over-exposure to credit derivatives of mortgage-backed securities – or credit default swaps (CDS) was a key reason for the failure of Bear Stearns, Lehman Brothers, Merrill Lynch, American International Group, and Washington Mutual last year, and is at the centre of a financial black hole that is engulfing the economy.
“Peterson’s bill specifically bars derivatives trading in a clearinghouse regulated by the New York Federal Reserve, which he said in an interview ‘is a tool of the big banks’ that ‘wouldn’t do much’ to regulate the contracts,” the New York Times writes.
“Because the banks’ lobbyists persuaded some of his Republican colleagues to resist more sweeping changes, Mr. Peterson said, he has had to modify a bill he introduced that is similar to Mr. Harkin’s in calling for wide-ranging limits on derivatives.”
Peterson’s warning mirrors that of Democratic Senator Dick Durbin, who just a few weeks ago uttered the same rarely acknowledged truth.
“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,” he said.
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According to the Center for Responsive Politics, Barack Obama received $69,823,872 in contributions from the banking industry, while John McCain got $60,605,254, with the total between the two exceeding $130 million.
This makes the banks the biggest donor to the presidential campaigns by a clear $35 million, second only to lobbyists and lawyers. Feel the democracy in action.
The New York Times reports that the top five financial sector companies — Goldman Sachs, Citigroup, JP Morgan Chase, Bank of America and Credit Suisse — gave $22.7 million and spent more than $25 million combined on lobbying activities in one year.
The banks have literally bought the House of Representatives.
In this sense the vast swathe of regulatory powers eventually handed over to the government will first be filtered through the very interests they are supposed to be overseeing, and we are back to where we started.
We have tirelessly exposed how the very people tasked with rescuing the economy by both the Obama and Bush administrations are the same ones who helped create the financial crisis in the first instance. Geithner is a prime example, being as he is a protege of former Goldman CEO and Citigroup director Robert Rubin.
Salon journalist Glenn Greenwald has exposed more ties between the House and the banks, and how financial policy is now almost wholly dictated by the banking industry.
This article was posted: Tuesday, June 2, 2009 at 10:17 am