Senators voted with Republicans to cripple banking oversight. The party has learned nothing from the triumph of Trump
Perhaps it’s not so surprising that the Democratic establishment hasn’t learned the lessons of its failure. In an economy hollowed out by the Great Recession, legacy Democrats lurch, occasionally, in a populist direction before retreating to where they are most comfortable: doing favors for the rich in exchange for campaign donations.
This week, it became clear again that Democrats have not truly internalized 2016. Democrats in the Senate joined the Republican majority to vote in favor of gutting key banking regulations passed in the wake of the 2008 crash, leaving dissenters like Elizabeth Warren to howl into the wind.
Beyond the immorality of the votes, they represented poor politics – a concession to the banking lobby in exchange for further distance from the beating heart of the party.
“I hope that our bipartisan work can rub off on the rest of Congress so we can break through the partisan gridlock that has plagued Washington for too long,” said Jon Tester, one of the moderate Democrats who worked on the legislation.
Tester was one of 12 Democrats to help drive what will soon amount to the biggest legislative change to banking industry oversight since Democrats under Barack Obama enacted the Dodd-Frank Act, the historic 2010 law that introduced many new rules on lenders. Congress is now poised to shrink the number of big banks that are subject to scrutiny designed to assess their ability to withstand financial shocks.
Banks with at least $50m in assets are subject to supervision under current law; the Senate bill would quintuple that number. Soon, banks will need at least $250m in assets to come under scrutiny.
Several dozen major financial institutions, including American Express, Credit Suisse, Regions Financial and SunTrust, would no longer be subject to the most rigorous checks. On Tuesday, the Congressional Budget Office warned of dire consequences: a financial firm with assets between $100m and $250m will become more likely to fail.
It’s worth considering when bipartisanship can still exist in this deeply polarizing moment. It cannot live where there is a growing national consensus, as over the severity of climate change or the scourge of mass shootings.
It cannot live in any kind of economic matter that benefits the working class or the poor, even after Donald Trump managed to shred rightwing economic orthodoxies on his way to the presidency – never mind that he’s governing like a Koch brothers pawn.
Weakening Dodd-Frank confirms the suspicions of any cynical voter – that the political class really will screw them over
Democrats and Republicans can only come together to feather the nests of the rich and powerful. Weakening Dodd-Frank confirms the worst suspicions of any cynical voter – that the political class really is colluding to screw them over.
What Tester doesn’t understand is that this “bipartisan work” will not “rub off” on Congress. This bill only exists because the largest funders of the Democratic party want it to exist. Big donors on the Republican side will kill efforts to ban assault weapons, fix our healthcare system or end our reliance on fossil fuels.
There is only bipartisanship when the rich demand it. Where no demand exists, the war commences. And make no mistake, 21st-century American politics is war.
If you are not winning, you are losing. Republicans know this well. It’s why they blocked Obama from appointing a supreme court justice and gambled on Trump’s victory, paving the way for decades of a Neil Gorsuch supreme court. It’s why Mitch McConnell, the Republican majority leader of the Senate, vowed early in Obama’s tenure to erode his agenda wherever possible.
Corporate welfare for bad-behaving banks is immoral. It’s also politically stupid. Republicans will do Democrats no new favors. Voters will not flock to the Democratic brand.
It will be seen simply for what it is: a giveaway to those who least deserve it.
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