Take a #5 tub of pure chutzpa, stir it into a giant vat of raw Wall Street greed, vigorously whisk in millions-of-dollars-worth of banker campaign contributions, then cover it tightly and apply high political heat.
That’s the perfect recipe for another financial meltdown for America – and it’s currently being cooked up in Washington. The chefs are nine Wall Street giants, including Bank of America, Citigroup, Credit Suisse, Goldman Sachs, and JPMorgan Chase.
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Last fall, even as these sinking banks were being bailed out, their executives were meeting secretly to form a new lobbying front: the CDS Dealers Consortium. CDS stands for “credit-default swaps,” the unregulated, absurdly-profitable financial scams that have devastated our economy. The bankers had been major players in this credit-default casino game – JPMorgan, for example, pocketed $5 billion in profits from it last year, before the game blew up. The game was disastrous, but these banks desperately want to keep playing, so their lobbying consortium is trying to kill new regulations to stop the scams.
Amazingly, despite broad public disgust with these profiteers, they are succeeding. While many in congress are demanding an independent, public entity to regulate these volatile trades, the CDS consortium is lobbying instead for them to be only loosely overseen by private “clearinghouses,” controlled by – you guessed it – the banks! In March, treasury chief Timothy Geithner caved in to the Wall Street consortium, embracing the closed clearinghouse concept it is pushing. As one conservative Democratic lawmaker said of this development: “The banks run the place.”
Still, public outrage matters in this fight. To battle Wall Street’s recipe for disaster, connect with grassroots mad-as-hellers at www.anewwayforward.org.
“In Crisis, Banks Dig In for Fight Against Rules,” www.nytimes.com June 1, 2009
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