Sen. Elizabeth Warren (D-MA) how the bill to weaken Dodd-Frank regulations that is poised for Senate passage is setting up the US for another bank bailout disaster.
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Warren said, “So here’s the deal, what this bill says is the next Countrywide that figures out a way to blow up the economy will be regulated the same way as if it were a tiny little bank. Like regulation, nobody takes a close look at. Did we learn nothing from the crash of 2008? These banks needs enough oversight to keep in mind all of us safe. I should add one more point, it’s not just me saying this, the congressional budget office, yesterday put out a report saying that what this bill will do is it will increase the likelihood that America will have — American taxpayers will have to bail out the banks again. Now, they said it won’t increase it a lot, but it will increase it.”
There is a consistent pattern in the modern era of Republicans deregulating banks and then using taxpayer funds to bail them out. The 1989 Savings and Loan bailout happened under a Republican president. The 2008 bailouts happened under a Republican president, and in 2018, Republicans are setting the stage for a future bailout. This bill has very little to do with real community banks. Community banks don’t have assets in hundreds of billions of dollars.
As we should have learned during the Great Recession, deregulating banks is never a good idea. Deregulation leads to banks taking unnecessary risks for profit, and since they know that the taxpayers will be there to bail them out, most banks don’t worry about the failing, because the government will pick up the tab. This is a bad bill that is being supported by mostly red state Democrats who are feeling the pressure of the midterm election.
Any Democrat who supports this bill will be responsible for setting the stage for the next financial crisis.
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