Free Elizabeth Warren

Big Banks or Average Joe?

“Obama Still Faces Business Group Defiance On Health Care And More” read the headline. Tom Donohue who is the President of the U.S. Chamber of Commerce and one of President Obama’s leading critics spoke out on the actions of the current administration accusing it of being anti-business. It has been a familiar charge ever since the Wall Street crash and President Obama’s efforts to reign in dangerous practices and increase consumer protections. The lobbyists for various areas of the business community have been busy influencing Congress to just let them police themselves. Well, that is what we did and we can see how that worked out. As an example Mr. Donohue states,

Workers who have been banking on employer-based coverage when they retire are being told not to count on it. And as premiums rise, thanks in part to the law’s new mandates, many companies are thinking about ending their employer-based plans, and moving workers into government-run exchanges.

The fact of the matter is that the system of employer furnished health care was on the chopping block to begin with. Businesses were finding it more and more unaffordable to keep up with rising premiums and pension plans were dropping medical coverage like hot potatoes.

Mr. Donohue goes on to criticize the consumer finance regulations that are designed to make credit card contracts more readable and to prevent interest rates from being arbitrarily increased for the slightest infraction.

We are particularly concerned that the new Consumer Financial Protection Bureau does not use its broad authority in ways that deny small businesses and consumers the credit and financial products they need.

Translated this means that banks don't like being told they cannot keep the lucrative though usurious revenue stream they have enjoyed for so long and that banks won't be so eager to lend money at 6% if they can't recover some of the windfall at 21% plus fees.

The financial titans just don’t get it even yet. They just can’t understand why everyone is so upset just because they blew the retirement plans for millions of people and plunged the country into the deepest recession since the Great Depression. I mean, after all they provide capital to finance the movement of the business world and they should be allowed to crank the system for all it is worth. It is just the cost of doing business. Risk their own money? What’s that all about? They are particularly chagrined at the notion of having to actually have a significant percentage of the money they purport to invest held in reserve. In other words, if they bet $100 they think it is too much to be expected to have $15 or so in reserve. Even a bookie expects that if you bet $100 you had better have $100 in reserve or get an arm broken but these sharks make a bookie look like a public servant.

Mr. Donohue even went so far as to criticize the administrations plans to sharply curtail the excessive lending practices used by the for profit colleges that often leave a graduate with 3 to 4 times the debt of a public university education.

Elizabeth Warren, the temporary head of the new Consumer Protection Agency is due to testify before Congress this week and she is no friend to those who carry the water for the giant banks. She should be nominated and confirmed as permanent director but the GOP majority has sworn she will not be confirmed. It seems they don't want a credit card agreement that can be understood. Two things are certain, she is a friend of the consumer and won't back down.

It sharply points out the “every man for himself” attitude of big business. Big business that can afford to spend millions on lobbyists to influence legislation while the average citizen only has his or her vote. It is the ability to band together that gives the average person the power to go up against big business but unions formed to do just that have been under attack for 30 years.

That's my take on the debate over financial regulation. I come down with Elizabeth Warren and the average Joe.