Spoiler: They're Not All Republicans
Yesterday, we saw Bernie’s statement about how the crippling of Dodd Frank caused the bank failures Friday. In 2018, Bernie loudly and consistently opposed passage of the GOP’s Economic Growth, Regulatory Relief, and Consumer Protection Act (EGRRCPA), the deregulation bill Trump was bragging about at the time. Bernie noted that the Republican Director of the CBO released a report— ignored by Republicans in Congress— that the EGRRCPA would “increase the likelihood that a large financial firm with assets between $100 billion and $250 billion would fail.” He didn’t name the Silcon Valley Bank by name but that was pretty prescient.
So how did it pass? Bankster lobbyists were handing out the checks like it was Christmas in March. When the vote was called in the evening March 14, every single Republican voted for it. They should all be held accountable and defeated the next time they run for reelection. The Democrats followed Bernie’s lead and opposed it. It passed 67-31. But wait! There were more than 31 Democrats in the Senate! Oh no! Oh, yes— 17 Senate Democrats crossed the aisle, campaign accounts bulging with bribes, to help Trump pass this repulsive and dangerous deregulation of the banks, leading directly to the mess we’re in now.
Which Dems? You could probably guess. It’s all the corrupt conservatives who are always voting with the GOP on economic issues: Joe Manchin (WV), the 2 scumbags from Delaware (Carper and Coons), the 2 from Virginia (Warner and Kaine), the 2 from New Hampshire (Hasan and Shaheen), the 2 from Michigan (Peters and Stabenow), Tester (MT), Bennet (CO), Maine independent Angus King and 5 GOP-lite senators who were almost immediately defeated at the polls, handing that chamber over to the Republicans in time to confirm Trump’s extremist judicial nominees:
Joe Donnelly (IN)
Heidi Heitkamp (ND)
Doug Jones (AL)
Claire McCaskill (MO)
Bill Nelson (FL)
You may be asking where Kyrsten Sinema’s name is. She wasn’t a senator yet. She was chair of the Blue Dogs in the House and the single worst Democrat in that body and… working furiously to pass the Senate Republican bill. I don’t want to give you the wrong impression though. It wasn’t just Sinema who encouraged Democrats to break ranks and vote for the bill. She worked closely with two other corrupt scumbags— Josh Gottheimer (Blue Dog-NJ) and Sean Patrick Maloney (New Dem-NY), These 3 are among a handful of Democrats who get as much or more in bribes from the banksters as top Republicans do. In the end, there were 33 conservative Democrats— mostly Blue Dogs and New Dems— who voted for deregulation, quite a few of whom have since been turned out by savvy voters. The ones who subsequently lost their seats (or wisely retired before the voters kicked them out):
Sean Patrick Maloney (NY)
Stephanie Murphy (FL)
Kurt Schrader (OR)
Collin Peterson (MN)
Tom O’Halleran (AZ)
Filemon Vela (TX)
Al Lawson (FL)
Ron Kind (WI)
Kathleen Rice (NY)
Many of them are still in Congress and deserve primary challenges, including Josh Gottheimer, (NJ), Henry Cuellar (TX) Terri Sewell (AL), Jim Costa (CA), Vicente Gonzalez (TX), Danny Davis (IL), Lou Correa (CA), Ann Kuster (NH), Sanford Bishop (GA), Lisa Blunt Rochester (DE), Bill Foster (IL), Andre Carson (IN), Marc Veasey (TX), Lou Correa (CA), Brad Schneider (IL)…
It’s much easier to point to the Republicans who should be defeated. 225 of them voted for EGRRCPA and just one opposed it— Walter Jones of North Carolina— and he died the next year. Trump, bragged how bipartisan the bill was, signed the bill on May 24, 2018, three days after the House passed it. When The NY Times first reported on SVB going under, Emily Flitter and Rob Copeland wrote that “Trump signed a bill that lessened regulatory scrutiny for many regional banks. Silicon Valley Bank’s chief executive, Greg Becker, was a strong supporter of the change, which reduced how frequently banks with assets between $100 billion and $250 billion had to submit to stress tests by the Fed. Becker, who had been on the San Francisco Fed’s board of directors, was no longer on the board as of Friday, a Fed spokesperson said.”
Becker has been a bipartisan donor, contributing to bankster-friendly Democrats like Mark Warner, Chuck Schumer, Jim Costa and Joe Biden— and the New Dem PAC— as well as to Kevin McCarthy’s leadership PAC.
You might want to read Elizabeth Warren’s whole OpEd, We Know Who Is Responsible, in yesterday’s NY Times. Excerpts:
“No one should be mistaken about what unfolded over the past few days in the U.S. banking system: These recent bank failures are the direct result of leaders in Washington weakening the financial rules. In the aftermath of the 2008 financial crisis, Congress passed the Dodd-Frank Act to protect consumers and ensure that big banks could never again take down the economy and destroy millions of lives. Wall Street chief executives and their armies of lawyers and lobbyists hated this law. They spent millions trying to defeat it, and, when they lost, spent millions more trying to weaken it.”
Greg Becker, the chief executive of Silicon Valley Bank, was one of the many high-powered executives who lobbied Congress to weaken the law. In 2018, the big banks won. With support from both parties, Trump signed a law to roll back critical parts of Dodd-Frank. Regulators, including the Federal Reserve chair Jerome Powell, then made a bad situation worse, letting financial institutions load up on risk.
Had Congress and the Federal Reserve not rolled back the stricter oversight, SVB and Signature would have been subject to stronger liquidity and capital requirements to withstand financial shocks. They would have been required to conduct regular stress tests to expose their vulnerabilities and shore up their businesses. But because those requirements were repealed, when an old-fashioned bank run hit SVB, the bank couldn’t withstand the pressure— and Signature’s collapse was close behind.
On Sunday night, regulators announced they would ensure that all deposits at SVB and Signature would be repaid 100 cents on the dollar. Not just small businesses and nonprofits, but also billion-dollar companies, crypto investors and the very venture capital firms that triggered the bank run on SVB in the first place— all in the name of preventing further contagion.
Congress, the White House and banking regulators should reverse the dangerous bank deregulation of the Trump era. Repealing the 2018 legislation that weakened the rules for banks like SVB must be an immediate priority for Congress. Similarly, Powell’s disastrous “tailoring” of these rules has put our economy at risk, and it needs to end— now.
[I]f we are to deter this kind of risky behavior from happening again, it’s critical that those responsible not be rewarded. SVB and Signature shareholders will be wiped out, but their executives must also be held accountable. Becker of SVB took home $9.9 million in compensation last year, including a $1.5 million bonus for boosting bank profitability— and its riskiness. Joseph DePaolo of Signature got $8.6 million. We should claw all of that back, along with bonuses for other executives at these banks. Where needed, Congress should empower regulators to recover pay and bonuses. Prosecutors and regulators should investigate whether any executives engaged in insider trading or broke other civil or criminal laws.
UPDATE: Mark Takano Wants To See Accountability
"The collapse of Silicon Valley Bank and Signature Bank mark the second and third largest bank failures in U.S. history. These failures serve as stark reminders that rolling back the rigorous prudential standards that were required of the banking sector following the 2008 global financial crisis, as the Trump Administration and Congressional Republicans did in 2018, can spell disaster for small businesses and individuals across the country… As we learn even more about what happened at SVB and why, I stand ready to act in Congress to bring accountability to those responsible and push for new reforms to ensure this does not happen again. Unsurprisingly, Republicans are not being as swift to respond. Instead of working with the Administration to strengthen the financial sector and hold the largest banks accountable, Republicans are now desperately trying to deflect blame toward Environmental, Social, and Governance (ESG) and ‘woke’ culture on the recent failures. They are desperate to obscure the role of the 2018 bill supported by 225 Republicans that led directly to this catastrophe. Once again, Republican policies have failed the American people. It is time to reestablish strong regulations on these sorts of banks, to protect depositors and customers from the next SVB.”