The Big Banks were a primary cause behind The Great Recession (4Q07-1Q09). The largest of the banks especially, made exceedingly risky trading bets, created the “sub-prime mortgage” fiasco, and had insufficient equity capital in order to offset their risks, as well as the rest of the banking system. Additionally, the myriad of various regulators was ill-equipped to properly do their jobs, which led to turf battles. So, after the Recovery began, President Obama’s Administration enacted the Dodd-Frank Legislation to rein-in the banks.
Throughout this recent Presidential Campaign—both during the Primaries and the General—the Republicans vowed to reduce all regulation, and especially to repeal Dodd-Frank. Now, its quite ironic, however, since throughout that same campaign process, the GOP has constantly accused Secretary Hillary Clinton, as well as President Obama, as being indebted to the Big Banks. Oh, the demagoguery of it!
So, President-Elect Trump, which is it? Are you truly against the banks, especially those considered “Too Big to Fail”, which almost led to the collapse of the U. S. Economy? And, are you going to follow President Obama’s lead and rein them in? Or are you going to side with your Republican colleagues in Congress, and kowtow to the Big Banks—and repeal the Dodd-Frank Legislation, thus allowing them to do as they please?
The GOP love affair with the Banking Industry goes much deeper, however—all the way to Bankers’ lobbyists, who patrol Capital Hill, doling-out contributions, right-and-left. It always appears that the GOP legislators are standing ready at the head of the line.
Back after the last major recession—The Great Recession of the 1930s—the Commercial Banks, which use bank deposits to fund loans and home mortgages, were separated from Investment Banks, which take greater risks through their transactions in the securities markets. There were calls, in 2009 and 2010, to just re-enact the more-stringent 1933 Glass-Steagall Act.
Instead, the Obama Administration devised the more suitable Dodd-Frank Act, which was signed into law in 2010. So now, the GOP wants to have it both ways. They castigate the Obama Administration for the Great Recession, which began under President Bush, they attacked Secretary Clinton for being too close to the banks; but, they are the Party that wishes to repeal the legislation which might prevent a similar Financial Melt-Down.
SO, WHICH IS IT REPUBLICANS—LOVE THE BANKS, OR HATE THE BANKS?