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Toxic train wrecks. Bank failures. Pandemics. Thanks, GOP! [1]
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Date: 2023-03-13
So let’s look at the inconvenient history here for the famously anti-banking regulation, anti-Dodd-Frank WSJ and every other Republican screaming “woke”: You made this happen. In May 2018, the former guy signed the Economic Growth, Regulatory Relief and Consumer Protection Act (the “Reform Act”) into law.
In March of 2018, Sen. Elizabeth Warren warned us at Daily Kos about what this could mean.
Dodd-Frank said that every bank with more than $50 billion in assets – that’s roughly the 40 biggest banks, or the top 0.5% of all banks by size – would have tougher rules than smaller banks. That means mandatory stress tests to analyze how they would react to another financial crisis and plans for how they would break apart, sell off assets, and liquidate in bankruptcy if they started to fail.
“What could possibly go wrong?!?” she asked in 2018.
Well, here’s a taste of it. Warren writes in The New York Times that “high-powered executives,” including SVB’s Greg Becker, successfully lobbied Congress and “[b]anks like S.V.B.—which had become the 16th largest bank in the country before regulators shut it down on Friday—got relief from stringent requirements, basing their claim on the laughable assertion that banks like them weren’t actually ‘big’ and therefore didn’t need strong oversight.”
Had Congress and the Federal Reserve not rolled back the stricter oversight, S.V.B. 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 But because those requirements were repealed, when an old-fashioned bank run hit S.V.B., the bank couldn’t withstand the pressure — and Signature’s collapse was close behind.
And here we are.
It’s East Palestine all over again, minus the toxic fumes and poisoned water, at least. The Trump administration stopped an Obama-era regulation to require better, faster braking systems on trains carrying highly flammable materials. It stopped a rule that would require at least two crew members on freight trains, and it ended a probability on allowing liquified natural gas to be transported by rail.
Remember this from early March 2020? “Trump disbanded NSC pandemic unit that experts had praised.” When Trump was declaring that COVID-19 “came out of nowhere” and “blindsided the world,” after he had disbanded the National Security Council directorate “charged with preparing for when, not if, another pandemic would hit the nation.”
Yeah, that. Progressive policies didn’t bring down SVB. They didn’t knock that Northrup Southern train off the rails. And they sure as hell didn’t cause the U.S. government to be caught flat-footed when COVID hit our shores.
It all comes down to a “small-government” GOP that’s become so obsessed with the “small” that they’ve abandoned the “government” part. It’s so much easier to play the victim and blame the gays and the women and trans people and (checks notes) veterans than to face reality.
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[1] Url:
https://www.dailykos.com/stories/2023/3/13/2157874/-Toxic-train-wrecks-Bank-failures-Pandemics-Thanks-GOP
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