US Senate Stiffs the People, Cheers Wall Street
Sam Rayburn, a longtime speaker of the U.S. House, once said, "Every now and then, a politician ought to do something just because it's right."
Last week, 45 U.S. senators dodged an excellent chance to do just what Mr. Sam advised. At issue was a straightforward, common-sense amendment proposed by Dick Durbin, D-Ill. It would have allowed bankruptcy judges to help hundreds of thousands of financially strapped homeowners who now find themselves trapped by exploding, exorbitant interest rates that bankers had attached to their loans.
Here was a conspicuous opportunity for even the most ethically blind of our congress-critters to take a principled stand, for Durbin's bill practically had a flashing red-and-yellow neon arrow attached to it, declaring, "Vote Here for the People Against Greedy Bankers."
Actually, even GBs would've benefited, for the bankruptcy provision would have allowed families to stay in their homes and keep making monthly payments to banks (albeit in reduced amounts). Also, banks could still make a profit (though not a killing), and there would be far fewer vacant homes going on the market, thus giving a badly needed break to America's depressed housing market.
What a sensible idea! So, naturally, the Senate stomped it to death.
The members were prodded to do so by Bank of America, Goldman Sachs, JPMorgan Chase, Wells Fargo and other upstanding members of the hyper-aggressive GB lobby. These are, of course, the same banksters who for years speculated rapaciously on people's homes, created a housing bubble that has since burst and shattered our economy, reduced their own financial fiefdoms to insolvency, then rushed to Washington to unscrew the Capitol dome and help themselves to a taxpayer bailout that is nearing $3 trillion.
Yet, the very idea of allowing bankrupt families to get a small break in bankruptcy courts has caused Wall Street elites to squawk like a banty rooster choking on a peach pit. They dispatched hundreds of well-connected lobbyists to Congress, to the White House and to key government agencies to nix Durbin's amendment (which, ironically, would've been attached to a bill that awards even more billions of taxpayer dollars to the banks).
Among the influence peddlers hired by bailout recipients were more than 100 former lawmakers, top congressional staffers, White House aides and agency officials.
Goldman Sachs alone has more than 30 ex-government officials in its lobbying army, including former House Majority Leader Dick Gephardt and the former top staffer to house banking chairman Barney Frank.
The first and chief target of this furious lobbying blitz was a guy who had long backed the homeowners protection plan, promising again and again last year that he would lead the fight to pass it: Barack Obama. The banker lobbyists were aided in this effort to back off Obama by two White House insiders who have shown themselves to be shameless Wall Street softies - Treasury Secretary Timothy Geithner and top economic advisor Larry Summers. Timid Timothy reportedly argued that even a small, tightly targeted bankruptcy provision for common folks would create "uncertainty" for big investors in Wall Street banks.
Never mind that millions of homeowners are facing crushing uncertainty over their mortgages, Obama and team promptly disappeared from the legislative fight, abandoning Durbin.
This let Wall Street's hired guns go after pusillanimous, bank-financed Democrats. Sen. Evan Bayh of Indiana, for example, was a swing vote, counted on by Durbin. But with no pressure from Obama, Bayh was free to sidestep principle and vote his own political pocketbook. Up for re-election next year, Bayh's top campaign donor is Goldman Sachs.
Needing 60 votes for passage, Durbin got 45. In all, a dozen Democrats gave Wall Street a big wet kiss by voting against Durbin's amendment, which also was a vote against America's hard-pressed homeowners - and against Mr. Sam's sage admonition.
"The banks are still the most powerful lobby on Capitol Hill," sighed Sen. Durbin afterward. He added this sobering note: "They frankly own the place."
© 2009 Creators Syndicate Inc.