Kent Mitchell: Cowardly politicians allow banks to gamble with ‘house’ money
Some have equated our federal government with Las Vegas after approval of a budget that contains a repeal of Section 716 of the Dodd-Frank Act, which protected the public from “federal government bailouts of swap entities.” But now, for the major players on Wall Street, there is no gamble – these bets are sure things. This seems inconceivable given the 2008 financial crisis and federal bailout of too-big-too-fail banks.
Big financial institutions will take higher risks to obtain greater returns when they are, in essence, playing with house money. Prediction: we will once again see public money used to bail out banks to keep the economy from collapsing.
Financial institutions contributed greatly in this last campaign and got the repeal they desired. Politicians acted cowardly by attaching this language to a budget bill rather than to a piece of legislation in which they could be held accountable for their votes.
Another provision allows individuals to contribute $1.5 million in every two-year election cycle as opposed to $194,000 currently. If there is anything politicians care more about than a potential financial collapse, it’s getting re-elected. The end result will be large Wall Street corporations contributing even more mega-profits to the campaigns of friendly politicians.
Kent Mitchell, Riverbank
This story was originally published January 14, 2015 at 11:07 AM with the headline "Kent Mitchell: Cowardly politicians allow banks to gamble with ‘house’ money."