Rep. Spencer Bachus, the Banker’s Representative

While the silent majority of progressives were licking their self-inflicted wounds left over from the Republican victories in 2010, they may have missed the expected ascension of Rep. Spencer Bachus to the Chairmanship of the House Finance Committee. Bachus, whose campaign was almost entirely funded by hedge funds on Wall Street and banks on Main Street, has actually said "Washington's role is to serve the banks." Yes he said that. He did not say Washington's role is to serve the people. He said "Washington's role is to serve the banks." Naturally Bachus has already announced his intention to take apart the Security and Exchange Commission. The SEC oversees banks in following regulations and Bachus believes the banks should be able to write their own regulations. After all, who knows more about banking than the bankers themselves?

The SEC, that's who. They know, as has been proven over and over again since the recent financial collapse, the unemployment mess, the foreclosure debacle, that Wall Street and the banks, working with too little regulation, really did come close to crashing the U.S. economy and needed an infusion of trillions of taxpayer dollars and loans from China just to prevent an all out bust. But regulations have gone the way of the passenger pigeon. The Glass- Steagall Act passed in 1933 in the wake of the stock market crash of 1929, placed a much-needed wall between commercial banking and the investment houses at the time. Simply put, the commercial banks in the 1920s had become a bit too enthusiastic about gambling on Wall Street with their customer's savings. And they had not done well. When the time came, the banks didn't have enough funds left to honor the savings of their customers, and the economy crashed.

Hence the Glass-Steagall act. And the GSA worked just fine for more than six decades, when along came Pres. Clinton and his congressional cronies and repealed the whole thing. And what happened? Once again the commercial banks got a little too greedy with their gambling practices on Wall Street, which itself had been freed up from financial regulations safeguarding the U.S. economy and so through various "financial products," which they had conjured up out of the thin air, products like the credit default swap, they too helped to sink the economy.

I feel I have to stop here to explain what a credit default swap is before I actually go on. Say for example you are a bank that awards a mortgage to a lender for $600,000, and, I am another bank who seeing this, and perhaps knowing something about the credit history of the borrower, comes to your bank and says "Look, I will give your bank $2000 a month for 15 months straight if your borrower manages to honor his mortgage for those 15 months. But if he doesn't, you will give me $600,000. That is a credit default swap. It is a straight gamble, as reckless as anything you will ever see in Las Vegas, but completely legal. If you didn't know about the practice before, it probably changed your understanding of banks. They are not as fiscally conservative as they would like their customers to believe.

You can look at all that sub-prime mortgage business and the raiding of 401ks and investment funds as just another result of very little regulation and oversight of U.S, banking and investment interests. It is all the same. It is the human condition. If you leave the safe open someone will eventually come by and empty the safe. Whether he graduated from Dorchester High or the Harvard School of Business is irrelevant.

So here we have Rep. Spencer Bachus promising that he is going to repeal a bill that Barney Frank (D) MA and Christopher Dodd (D) Conn. wrote, allegedly to prevent the risky banking practices of the recent past. But the Bill is a farce. It doesn't really regulate anything. Both Frank and Dodd are beholden to the banking and insurance companies as most are. That is the truth of the matter.

And Bachus isn't the only politician who has an obvious conflict of interest with banks and financial institutions.Just look at New Jersey republican, Scott Garrett, ready to take over the Capital Markets Subcommittee of the House Financial Services Committee when it was learned yesterday that Garrett had just recently received a $200,000 campaign contribution from Elliot Management of New York, a hedge fund company. Garrett's House committee would have some oversight of hedge fund operations. Another obvious conflict of Interest.

Wall Street and the banking industry are now running Congress. How did this happen? It happened last year with one of the worst Supreme Court decisions in history, when the Court ruled that corporations had the same rights as actual people, and therefore could donate as much as they wanted into political campaigns as a form of "free speech." With that one decision, the Supreme Court of the United States effectively took the U.S. away from the people and gave it to the corporations.

Further it turned the Democratic Party into The Republican Party and the Republican Party into the Democratic Party. So now we have only one party. The Party of Greed. One of the other things that horrendous Supreme Court decision did was put Rep. Spencer Bachus in Congress. From the banking, investment and insurance businesses he collected more than a quarter million dollars that is documented. He spent $1.5 million for his seat, and a lot of those single contributions were also from the banking and investment community. So the man paid for by the banking industry is in charge of its oversight. And people walk around shaking their heads about what is wrong with the United States, when they don't have to look any farther than Rep. Spencer Bachus.