Congressmen Alan Grayson and John Conyers have published a well-thought-out proposal on bank equity, with the objective of assuring that when banks do stupid things (which they do with great regularity, even before the era of casino banking, they’d embrace some new fad and run off the cliff together, like lemmings), they have enough capital to absorb losses. And that means a lot more capital than regulators are demanding they have now.
So I urge you to co-sign their letter (full text below) at http://nobankwelfare.com/. It’s already at 15,300 signatures towards a target of 17,500. This letter relates specifically to proposed rules by the Office of the Comptroller of the Currency on how much equity systemically important banks should hold, which means defining how the ratio is determined and how it is applied to various bank entities. This is the sort of process in which public interest has an impact; Sheila Bair in her book Bull by the Horns said a petition by this site that garnered 12,000 signatures influenced a mortgage reform proposal.
I don’t believe, and I suspect they don’t either, that this is anything approaching a solution to the outsized and predatory role banks have come to play in our economy. But it is an important piece of the solution. For instance, Martin Wolf, who many readers criticized as being too muted in his some of his remarks on the “contained depression,” said:
In essence we have the same financial system as before, except that the banks are bigger and more concentrated, and more diverse, and they are very marginally less leveraged – but they are less leveraged, as I put it in one thing it is the difference between being unbelievably over-leveraged and merely being extraordinarily over-leveraged, so basically the leverage ratios have halved but they are still very very very high. The interconnections of the banking system are the same, and it is not at all clear that any of the underlying problems that have been revealed in risk management and so forth have been resolved.
The letter, of necessity, gets into technical details, but the major issue it addressed that our bank regulatory regime has moved to a system where bank assets are measured on a risk-weighted basis. This is the mechanism that encouraged Eurobanks to buy toxic AAA rated CDOs and sovereign debt; both had zero risk weights under Basel II, which meant they could lever them to the moon. The US did not implement Basel II prior to the crisis, but similarly focused on risk-weighted assets rather than simpler total leverage measures. Former central banker London Banker described the results in a 2010 post:
The credit risk weightings mean that instead of reserving the standard 8 percent of capital in respect of a debt, the bank can cut that by the weighting applied to the asset class. Effectively, the reduction in credit risk weighting operates as a powerful subsidy to the borrowers and equally powerful incentive to over-leveraging the lenders….
So the current financial crisis started with bad mortgage debt, spread to bad bank debt, carried over into bad agency debt, and now encompasses bad sovereign debt. Each of these categories was given preferential capital weighting under the Basel Accords, and now all are open sores on the financial system and the stability of excessively indebted governments.
Not only did the Basel weightings encourage poor risk assessment, they directly contributed to the inadequate capitalisation of banks for the risks they assumed.
In general, undue reliance on single measures is dangerous; it’s like using blood pressure as a proxy for health and thus missing that a patient has cancer. So I hope you’ll co-sign the letter at http://nobankwelfare.com/. Text below:
The Honorable Thomas Curry
Comptroller of the Currency
Office of the Comptroller of the Currency
400 7th Street SW, Suite 3E-218
Washington, D.C. 20219
The Honorable Ben Bernanke
Chairman
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, N.W.
Washington, D.C. 20551
The Honorable Martin J. Gruenberg
Federal Deposit Insurance Corporation
550 17th Street NW
Washington, DC 20429-9990
Dear Comptroller Curry, Chairman Bernanke, and Chairman Gruenberg:
We write to commend you for tackling a core problem in our financial system: too much gambling with other people’s money, by banks that are often regarded as too big to fail. As Andrew Haldane, the Executive Director for Financial Stability for the Bank of England, has noted, every financial crisis has one critical ingredient: excess leverage. This is because a financial institution with a lot of equity can absorb unexpected losses, whereas one with too much debt relative to its equity will fail in the face of financial stress.
We think that the standard you have proposed, a supplementary leverage ratio (SLR), is less prone to manipulation and more likely to succeed than many alternatives. At the same time, we also believe that the proposed ratio is simply too low. As Nobel Prize winner Eugene Fama recently argued, “The simple solution is to make sure these firms have a lot more equity capital — not a little more, but a lot more — so they are not playing with other people’s money.” We agree.
The problem the proposed rule addresses is as follows: A system in which banks or bank-like institutions are tightly coupled with one another, and in which those institutions have too much debt relative to equity, is prone to meltdowns that can spill into the real economy and cause massive damage. Whether these liabilities are in the form of derivatives and off-balance-sheet assets or overvalued tulips pledged as collateral, too much debt without loss-absorbing equity to match it is simply too dangerous to exist.
It is difficult to measure the exact cost to society of our undercapitalized large banks blowing up during the most recent financial crisis, but it was certainly enormous. The nonprofit advocacy and research group Better Markets pegged the cost at roughly $12 trillion, whereas the U.S. Government Accountability Office put it at $22 trillion. Regardless of which figure one uses, it is obvious that the United States is a much poorer society because there was too much leverage backed by over-valued collateral in our financial system. The proposed rule strikes at this problem.
Of course, all capital and accounting standards are not created equal, and many are prone to manipulation, especially during a crisis. For example, in 2009, the Financial Accounting Standards Board (FASB) Chairman Robert Herz complained of getting “calls and visits from some of those institutions that are now in government hands, about two weeks before they get taken over, trying to get the accounting [standards] changed.” It is critical to set standards that are as simple and strong as possible, so as to reduce the pressure on regulatory bodies to allow bad actors into the market, as well as to create sufficient information in the market to ensure that investors are pricing risk accurately.
The proposed rule by the Office of the Comptroller of the Currency (OCC), the Board of Governors of the Federal Reserve System (Board), and the Federal Deposit Insurance Corporation (FDIC) would require large, systemically important financial institutions (SIFIs) to hold more equity relative to their amount of debt. This rule would require the application of the SLR to the institution’s balance sheet, in addition to a risk-adjusted capital ratio. An SLR measures a financial institution’s tier one capital against its total assets. A risk-adjusted capital ratio measures a financial institution’s capital base against assets that are adjusted by regulators based on how risky they are perceived to be. According to the rule, SIFIs would be required to have a minimum capitalization of 3%; to be allowed capital distributions and executive bonuses, the capitalization would be higher, at 6% for the holding company.
An earlier rule proposed a minimum amount for the SLR. This rule would define the amount required for an institution to be deemed well-capitalized and able to pay out executive bonuses and dividends. It only applies to bank holding companies (BHCs) with more than $700 billion of consolidated assets or over $10 trillion in assets under custody. The institutions to which this rule would apply are Citigroup Inc.; JPMorgan Chase & Co.; Bank of America Corporation; The Bank of New York Mellon Corporation; Goldman Sachs Group Inc.; Morgan Stanley; State Street Corporation; and Wells Fargo & Company. These are the institutions that are often regarded as “too big to fail.”
We believe that an SLR is a more accurate measurement of how much risk a financial institution is actually taking on, versus using risk-based capital.
In a crisis, as former FDIC Chairman Sheila Bair has observed, the market cares about the leverage ratio, not risk-adjusted capital. Risk weights are prone to manipulation by internal bank models. As the Vice-Chairman of the Federal Deposit Insurance Corporation (FDIC), Tom Hoenig, has noted, there was a “steady downward trend in risk weights and upward trend in leverage leading into the crisis.” And less-capitalized banks manipulated risk weights after their internal models were approved by regulators. The use of a leverage ratio in the United States by regulators meant that American banks were, relatively speaking, better capitalized than their European counterparts.
Risk-weighted capital ratios also have the added downside of increasing, rather than reducing, systemic risk. Regulators deemed certain asset classes as less risky than others. Mortgage backed securities, sovereign debt of Zone A states, agency debt, and interbank debt all effectively received subsidies because regulators determined that banks had to hold limited capital against them. Thus, a crisis beginning in mortgage debt spread through agency debt, interbank debt and into sovereign debt. Risk-adjusted capital allowed banks to treat Greek sovereign debt as bearing the same risk as German sovereign debt. Regulators cannot predict the future, but risk-adjusted capital models require them to. Leverage ratios do not.
As you continue crafting and applying this rule, we believe several principles should apply:
1) When in Doubt, Require More Capital: Insufficient capital requirements for banking institutions might increase the return on equity of specific institutions and help bank executives garner bonuses, but it also caused a multi-trillion-dollar financial crisis. Erring on the side of requiring too little capital is not a risk worth taking. It makes no sense that smaller, simpler, less complex banks that have no implicit backstop are better capitalized than large, opaque, and systemically significant institutions that have sprawling international operations and an undeserved taxpayer-enabled funding advantage.
Stanford University professor Anat Admati recommends that large banks hold capital levels of 20 percent. Tom Hoenig has pointed out that the average Tier 1 leverage ratio for banks that have between $250 million and $10 billion in assets is a little under 10 percent. A 6% ratio, with a 3% minimum threshold, is insufficient. We urge you to increase the SLR substantially for large institutions, in accordance with bipartisan legislation backed by Senators Sherrod Brown and David Vitter.
2) Set the Highest Possible Standards: Setting high capital standards is critical; in a crisis, simplicity matters. An SLR is simpler and easier to understand than a risk-based capital ratio. Therefore, we think an SLR should be the primary measure for regulators, and that risk-based capital standards should be the backstop. During a crisis, investors believed the leverage ratio, whereas they did not trust risk-based capital.
Ensuring that the SLR is a high-quality ratio is also critical. The numerator in the ratio should be Common Equity Tier 1 capital. In addition, the SLR should conform to the proposed Basel revision of leverage ratio (from consultative document issued June 2013). The Basil revision updates capital standards for derivatives and off-balance sheet assets, although we’d prefer the use of the more cautious International Financial Reporting Standards (IFRS) when accounting for derivatives exposure as opposed to Generally Accepted Accounting Principles (GAAP). Regulators should also ensure that loan loss reserves and deferred tax credits are not being included as a part of an institution’s regulatory capital.
3) Cast a Wide Net: The application of the Supplementary Leverage Ratio should be extended beyond the largest financial institutions. The Savings and Loan crisis involved thrifts that were not particularly large, but it still was costly to certain regional economies. The fall of Long Term Capital Management, a highly leveraged hedge fund, created enormous problems for the large banks and nearly required a massive bailout. In a deeply interconnected system without the firewalls of Glass-Steagall, the risks of inadequate capitalization are not confined solely to the largest institutions or solely to banks. Regulators should consider using their authority to extend it beyond the largest financial institutions, and into institutions that are smaller institutions that are nonetheless an integral part of the financial system.
4) No Self-Regulation: There should be no self-regulation when it comes to setting capital standards. Large banks are asking that requirements to hold capital against derivatives exposure be calculated based on internal bank models, which include the use of Value-At-Risk (VAR) calculations. Internal bank models are prone to manipulation, and VAR fails precisely when a financial crisis hits.
This is also why banks should not be allowed to net between trading and banking books. We believe that the more reasonable firewalls there are within and between institutions, the less interconnected the system is, and the less risk it poses to the real economy.
In addition, we think that it is problematic to treat insured depository institutions (IDIs) that are subsidiaries of bank holding companies differently from the holding companies themselves. There is no reason for a 5% ratio for the IDIs and a 6% ratio for the holding company. This is an invitation to regulatory arbitrage.
Once again, we thank you for your attention to this matter. Inadequate capitalization of large financial institutions was at the heart of the financial crisis. Thank you for your work to address this critical problem.
Sincerely,
Alan Grayson
Member of Congress
John Conyers
Member of Congress
38 comments
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Petition signed. Wondered what Grayson had been up to. He’s less controversial and more workmanlike this session so he’s isn’t getting as much media attention. It’s a good change, a better use of his (considerable) talents, IMO. 15,400 signatures, 88% of the way to 17,500 now.
I’m not sure that’s entirely by design.
He was on the Financial Services Committee before. He made too much trouble there. Now he’s on one of the defense committees, and they keep those guys quiet by showing them classified material.
Maam;
I wonder if they have to sign some sort of “National Secrets Confidentiality Form?” Even I can see a big conflict of interests here.
Conyers also is not on any of the finance committees.
I wonder why there are no D’s from the committees with jurisdiction on this. Grayson must have at least tried. I know I know, fund-raising and all that. But zero signatories? That’s pretty extreme.
So we have two minority congressmen going over the heads of their own party’s committee members to gin up a public reaction on an issue the banks care about. That’s pretty gutsy, and deserves to be supported.
Signed and agree, Grayson is on leash. It will be interesting to see how well he can be restrained.
. Now he’s on one of the defense committees, and they keep those guys quiet by showing them classified material.
Yes. For example, as reported here, Grayson has said he’s been shown the TPP drafts but he can’t talk about them.
But he is entirely mistaken. He has every right to make them public, put them into the Congressional Record, no matter what agreement he has signed, no matter the classification.
Nobody has the power to restrain the legislature that way – Parliamentary Privilege, enshrined in the Speech & Debate Clause of the Constitution. Art 1, sec 6.1 -“and for any Speech or Debate in either House, they [legislators] shall not be questioned in any other Place.” Rep. Grayson – do a Mike Gravel.
Yep. If Grayson does this and has to camp out on the Capitol floor, we’ll organize a brigade to bring him food and supplies. I’ll come down from The North….. Great media spectacle, I might add.
Alan Grayson could deliver the tablets from the mount and I would not read them. He is one of the most disgusting individuals in Congress. He should be censured by the House.
His recent fundraising letter, comparing the Tea party to the Klan is despicable and brings Dem politics to lower in the sewer. Do you have any idea of the outrage in the black community about the Klan? Where is the outrage from the Black Congressional Caucus.
Nothing that Alan Grayson does merits consideration
I read Black Agenda Report, so I know where the outrage in the Black Congressional Caucus is: It’s in a glass jar on Jamie Dimon’s desk, along with some other vital bodily organs.
As usual, truth is the best defense. I can’t fathom how anyone could find it offensive to deal with reality.
Grayson must be moving up in the world! He’s now the target of trolling. First time commentor, presumably came here based on a Google alert.
Monopoly—-5 banks crry 50% of deposits of 7000 banks.
10 banks carry 80%. m o n o p o l y—————
On one hand, I would like to thank you for not posting DNC propaganda.
However, I believe the word you are looking for is ‘oligopoly’. If 5 companies control 80% as you say, the term for that is oligopoly.
Its an honest mistake of words.
We love you Alan G. (to distinguish vis a vis Allen W(est)).
I am of your previous constituency; can’t stand the lard headed “Daniel Webster” {what a crock – these reactionary, Cadillac driving gerrymandered ditrict inhabitants, with low IQs and impaired attention to detail, probably simple-mindedly thought the name “Alan Grayson” looks/sounds, in comparison to a candidate who’s name perfectly mates to their elitist ultra-conservative, bank friendly anti-labor views of themselves, too much like neo-liberal/libertarian “Alan Greenspan”}.
Alan G. has been doing his vocal and vociferous part on the intel committee and everything he possibly can … approaching Eddie Snowdon levels … to raise everyone’s awareness of these supra-government activities – only to have hurdles surreptitiously raised as the effect of his efforts began to bloom.
What I would like to know is who has Alan found to fill Matt Stoller’s previous role ?
I am sure he will be pleased you asked.
Stoller is again a staffer to Grayson.
I signed, and I’ll ask friends and family to do the same.
I support this, but only half-heartedly, since I am somewhat skeptical that increased capital requirements, including leverage requirements, are a real solution to the fundamental problem of financial instability.
The metaphor of capital “absorbing” losses obscures the tangled economic interconnections in modern money-manager capitalism. The shareholders in big banks are mainly large institutional investors, including the asset management arms of other big banks, and if a big bank suffers large, unanticipated losses, then those losses are experienced by those investors whose balance sheets take a giant hit. In turn, the asset values of everyone invested in those institutional funds takes a hit. The negative wealth effect can have a massive impact on demand and confidence, as happened in 2008 when everybody’s retirement savings were partially vaporized. That’s what the “absorbing” consists in – it just means that instead of creditors being threatened with losses, shareholders are threatened with losses.
Now you might say that since shareholders have a corporate governance role that creditors lack, the more they are on the hook, the more pressure they should exert on the TBTF institutions to assess and manage risk and investment properly. That’s the Alan Greenspan view about the self-regulating capacity of capitalism. That view hasn’t worked out so well in practice, and I don’t expect it to prove any more successful in the presence of stronger leverage requirements. See Bill Black.
I don’t understand why so many progressives have drifted into Tea Partyism, with its hair-pulling obsessions with central bank bailouts and seeming preference for liquidationism. A lot of these are based on the misconception that central bank backstopping depends on “taxpayers.” There are other more progressive approaches to financial stabilization, and they involve a larger government role, not a smaller one. They include some combination of:
1. Breaking up institutions, so that there aren’t any TBTG institutions, possibly creating state banking institutions in the process to supply the missing large project capital development potential that is lost if private firms are shrunk.
2. Targeting wealthy individual investors, hedge funds, etc, for first loss position, while protecting the many small investors investing through asset-management funds, etc. This would involve something more fine-grained than an undifferentiated capital requirement for all shareholders.
3. Converting private retirement funds into public funds via an expansion of social security, thus shrinking the overall size of the financial sector significantly. Roll back the “ownership society”.
4. Tying implicit and explicit government guarantees to plans for partial or total nationalization of institutions if they fail. If the government has to bail out an institution, the bailout should give the public an ownership stake in the firm and a senior role in the governance structure. Some progress has been made in the area of resolution authority, but we need something in between the takeover of a failed firm and the hands-off policy for solvent firms. There should be a series of fire alarms, and each one should carry the potential for stepped-up government buy-in and management.
5. More micromanagement of lending and investment activities, which will include an army of regulators watching the industry like hawks. Err on the side of assuming everyone in the financial biz is a potential predator, who will start eating the deer and sheep as soon as the shepherd’s back is turned. And while it is one thing to have a way of cleaning up a bad investment mess with minimal destabilization once it occurs, we need to make sure that fewer bad investments occur in the first place.
6. A redistributive, leveling incomes policy. Financial instability is made more likely in a society built on debt peonage.
Should also have mentioned the importance of upholding the rule of law in the financial industry. Failure to do so enables a Hobbesian jungle, and is the single greatest threat to financial stability. I didn’t think I would need to reiterate that point for people who are already reading everything Yves and Bill Black write.
Rep. Grayson has just sent out the most hideous fund raising letter I could imagine. I find a member of Congress I thought I admired to be reprehensible and will turn away from any idea Grayson has from here on.
When a member of Congress turns to being Senator McCarthy, I am done with that person from there on. No excuse, no apology accepted, and of course none has been offered only more hideous offense.
What does the letter say? What are the McCarthyist elements of it?
http://www.thedailybeast.com/articles/2013/10/23/grayson-s-folly-what-the-tea-party-and-the-kkk-
Apparently, the “Obama is a Muslim Kenyan Marxist Terrorist” Tea clatch has a one sided sense of humour.
Oops, okay I’ll try that link again:
http://www.thedailybeast.com/articles/2013/10/23/grayson-s-folly-what-the-tea-party-and-the-kkk-have-in-common.html
I read it and actually gave money and never batted an eyelid. The Tea Party is a racist organization and it’s time someone in Grayson’s position pointed it out and power to Grayson for doing this. I also enormously admired him for pointing out to this country from the floor of Congress that the GOP plan for Healthcare was ‘die quickly’. Is that not the truth? You keep cutting Medicaid and deny all assistance to help people buy low cost insurance – that is what you are doing in the end – asking people to die quickly. Grayson spoke for a lot of us then and he is speaking for a lot of us now when he calls out the Tea Party for what it is. It is nothing but a racist Caucasian Senior Citizen organization that is afraid of losing its benefits and special stature in Society in terms of SS and Medicare. They don’t care tuppence about their children and grandchildren but care only about whether SS and Medicare will run out before they kick the bucket. Their firm belief is, ALL our safety net expenditure is going towards blacks and immigrants. I am pretty sure that if you ran some kind of a survey among the members of this clan you will find widespread sympathy and support for the Klan and its heyday.
Oh, this is rich. The Tea Partiers routinely engage in all sorts of vicious hyperbole (comparing Obama to Hitler, death panels) , but when someone gives them a dose of their own medicine, they get all offended. Grayson is making an accurate charge, that the Tea Party is racist. You think you are going to get much sympathy for whining that your feelers are hurt?
And in general, the sooner the Tea Party is relegated to the dustbin of history, the better.
Alan Grayson letter and subsequent horrid justification show how racist and mean-spirited a person he is, but he is not just an average person but a member of Congress. Grayson is a shameless McCarthite racist.
I think Alan Grayson is rather mild compared to Michele Bachmann, Rush Limbaugh, Rick Santorum, Ann Coulter, and Rick Perry. Some of their statements are rabidly hateful, and some are so strange they are worthy of the Bizarro World or Monty Python’s Flying Circus.
The goal of shouting racist towards legitimate critics of the Obama Administration is to avoid counter arguments because there are none by conflating racists and tribalists* with actual critics. White guilt works among the petty bourgeois.
The Obots can’t counter the arguments with anything else because Obama is a puppet of Wall Street and the MIC.
It prevents African-Americans and other minorities who often experience really racism from looking closer at what a crummy guy Obama (lets not forget the Democratic establishment) really is.
My guess is the poster making accusations of racism is either very cynical or doesn’t have the slightest clue who Grayson’s ally John Conyers is which would be expected if one is American.
*Not all Teabaggers are racists, and they would be just as problematic for a white Democrat such as Bill Clinton.
How convenient historically that they came together just in time to spew conspiracy theories and neofascist propaganda points at the first “black” looking president. Coincidence, surely.
And their behavior towards John Lewis when demonstrating in front of Congress, that was love spit!
And their position on social safety net issues, the fact that they should be all for white people and nothing for the swarthy to darker earth toned ones because they are all bums, that’s taken out of context or something, right? Right. Get Obama’s black government welfare muslim Kenyan communist socialist black nationalist Christian cotton pickin’ hands off my Medicare!
I think being called racist and compared to the Klan is only offensive to the TPP on a class basis: the Conservative Citizens’ Councils were where the real racist power resided, the head that directs the snake rather than the snake itself, which is run by po white trash pawns to the rural elites. Like Reagan in Philadelphia, Mississippi, the goal is to maintain the sheen of gentility while directing your flying monkeys remotely to do your evil bidding.
I don’t think one could find a better illustration of the belief that everyone not of “my kind” is automatically undeserving, regardless of what we do or don’t do in life, than this link from yesterday, featuring gasbag Rush Limbaugh:
http://www.duffelblog.com/2013/10/rush-limbaugh-calls-troops-welfare-queens-moochers/
Trying to placate these people by pandering to their world view, especially with a country and a workforce that is more diverse, by gender, culture, and ethnicity– just like the military– is a fool’s errand that one can never win, by definition.
We can’t even “earn” our pay and our social security, etc, because we are meant to toil away and still be systematically disenfranchised and exploited.
“Neoliberalism” ain’t the half of it. Not even close.
It pains me to say something in defense of Rush Limbaugh, since I have enormous contempt for the famous drug addict. However, the DuffelBlog article is Onion style satire. To the best of my knowledge, Limbaugh did not say the words that are reported in the DuffelBlog article. He probably has thought them many times, though.
It is a bit of convenience. Like most people they aren’t particularly smart, and Obama’s skin color is a bit obvious. I know many people didn’t pay much attention in the 90’s especially among Democrats who still labor under the delusion that Bill Clinton was anything other than a right winger, but I’ll just list some things you might have forgotten:
-selling arms to the chinese
-kowtowing to the Saudis
-the various sex scandals; yes, there were plenty of outlandish ones such as his “affair” with Gina Gershwin
-the stuff about Hillary
-a subpoena for the list of attendees at Chelsea Clinton’s slumber party
-the Vince Foster sage
-the start of the right wing e-mail “fact” lists
-the White Water fiasco
-anything about Janet Reno; although it did give us Will Ferrell’s delightful impression
-a major expansion of talk radio including Rush Limbaugh having his own television show. It was pretty nasty.
-lets not forget the books by former Clinton security people who handled his hookups.
-you may have forgotten about Hillary sending her black helicopters as part of the NWO which connected to anti-semitic propaganda
-the vast body count of Bill’s political enemies.
-IRS targeting by Bill (yeah, its a classic)
-hiding phone calls; even Obama’s calls for transparency were framed as a pot shot at the Clintons.
-of course various gift scandals such as the who’s who of the Lincoln Bedroom guests.
Truly, it was a time to be alive.
I know pretending this didn’t happen is very important to rationalize Obama weakness and the general seeking of the bipartisanship, but the right wing didn’t become crazy because of Obama.
Admittedly, there wasn’t youtube, so the clips weren’t just available for consumption the way they are today. You had to send those annoying attachments which took forever to open to dial up. It was very irritating.
I have not seen the fund raising letter that Grayson sent out and therefore cannot comment on whether or not he is a racist. (Do believe that he is firmly in the AIPAC camp, however.)
But this much I do know: After vowing not to vote for a health care bill without a public option, he folded and did just the opposite. As far as I’m concerned, case closed. Not interested in talk from those who can’t or won’t do the walk. My gut reaction to this bill is that it is grandstanding, pushing a bill they know has no chance to get out of committee, much less come to the House floor for a vote. Just another case of, “See what I tried to do. Aren’t I great?”
When Grayson and Conyers and others (looking at you, Kucinich and the rest of the Fauxgressive Caucus) had a chance to back their big talk with a vote, they took a dive. (Or, if you prefer, revealed their true lying selves.) And despite his big talk, did Conyers ever introduce an impeachment bill against Bush? Fuck no.
Fuck Grayson. Fuck Conyers. Fuck all the Dems.
The public option was a bait-and-switch scam operated by career “progressives” running interference for Obama, designed to suck all the oxygen away from single payer, a tactic that worked brilliantly. I can’t fault Grayson for failing to vote for a scam.
I agree about the use of the public option as a decoy around single payer. However, it would have been better than nothing. Grayson in neither stupid not uninformed on that subject and I think you have to be pretty generous to think that he didn’t know it was a decoy until late in the game. After all, if he knew it, he should have come out and said so. But no matter how you slice it, from my perspective he vowed to vote for it, then didn’t.
And as flawed as the public option may have been, lots of progressive bloggers such as Jane Hamsher were whipping support for it. (Not to mention that it scared the health insurance complex enough that President Pinocchio has to make a secret deal to keep it out of the final bill.)
An impeachment bill would have gone nowhere. The Rs controlled the House through 2006, and the Dems came in just as the crisis was starting, which rather focused the mind. Plus an impeachment so close to a Presidential election had high odds of backfiring.
Well, the Democrats and those who at that point identified with them made several arguments that were impeachment worthy, especially Bush’s program of warrantless surveillance. WMDs might well have been thrown into the mix. Of course, all of that, in retrospect, was purely instrumental — “any stick to beat a dog” — but at the time part of the base were pretty fired up about it, and Bush was greatly weakened, as well, after having spent his political capital on a botched attempt to privatize Social Security. (The Democrats, bless their hearts, are far more subtle than Bush was.)
Apparently this would be good for national security. Not sure how. Because with higher capital requirements the banks would fail tomorrow, not today? And since the TBTFs are insolvent (or “illiquid”) why should we taxpayers allow them to just rot at our expense. Asking them to keep more capital is iffy. If they can’t do it they won’t. But they will publish reams of accounting bullshit for everyone’s entertainment, including their regulators. Better to just put an end to this system. I vote for euthanasia of our banking system. If they want to be privateers, let them buccaneer their way to China.
Even gardeners are up in arms — “overvalued tulips.”