Wall St Rips Off Communities by $4 Billion…and the GOP Wants to Roll Back FinReg?
Now that Republicans have retaken the House, it appears from a JP Morgan Chase memo obtained by that they will attempt to roll back the recent enacted regulations on Wall St., particularly the new Consumer Financial Protections Commission and the rules on derivatives trading.
While Republicans may be planning to repay Wall St. for its election largesse, unwinding rules and defunding departments aimed at protecting investors, consumers, and the economy would be an enormous mistake as we should have learned from the financial crisis. That crisis was caused by unregulated, massive speculation aimed at generating enormous profits for Wall St regardless of the harm the speculative derivatives might cause to the economy as a whole.
Lest you think only the housing sector was the prime target of the derivatives game – and the only loser – Bloomberg article on how much interest rate derivatives cost state, local, non-profits and school boards should change your mind.
Wall Street Collects $4 Billion From Taxpayers as Swaps Backfire
Long story short, because of the derivatives that these entities bought into, the available cash to fund needed thousands of projects, jobs, and student enrollment is wiped out.
Congressional Republicans must not roll back the newly enacted regulations on derivatives, defund the regulatory agencies or stop the CFPC. If they do, the next financial crisis may come sooner rather than later – and will have an economic impact that the United States will not be able endure. It will crush the nation as the cost will be in the multiple trillions or greater than the GDP, according to most economists.