Megabanks like JP Morgan Chase and CitiGroup got a big, fat wad of corporate welfare from the Republicans in the #CRomnibus spending bill that passed this weekend; a provision that allows them to gamble on risky derivatives with taxpayers on the hook to cover their losses. But John Hinderaker at Powerline makes a decent case that the megabanks are actually scapegoats for the failed Progressive Policies of Clinton, Bush, and Obama.
For years, my friends in the banking industry told me that the federal government was forcing them to make bad loans. Mortgages were not the only such bad loans, but while they were the largest, they were also the least problematic from the banks’ standpoint, since the taxpayers, through Fannie Mae and Freddy Mac, stood ready to buy them and assume the risk. The financial collapse of 2008 and the recession that followed were caused primarily by liberal policies enforced by the federal government that went back to the Carter administration.
The TARP bailouts, Hinderaker says, were actually just DC politicians paying back the banks for the bad policies they had forced on them; and the megabanks paid them back anyway; unlike Democrat crony-operatives like Jamie Gorelick and Franklin Raines who made tens of millions on subprime mortgages and got to keep every penny.
Hinderaker wonders what the implications are in this crony corporatist conundrum are in terms of a presidential bid in 2016 for Democrat senator Liz Warren; whose attacks on Wall Street banks have made her the darling of the progressive left. Yet, if she runs, can she count on the millions of dollars in donations from Wall Street bankers that Democrats always get. (Answer: Of course she can; those campaign contributions aren’t looked at as support for political philosophy, they’re bribes and extortion payments to politicians who could destroy the bankers at will.)
I note some Republicans relish the thought of a Liz Warren candidacy. They think there’s no way Americans would elect a far-left radical senator with a sketchy background to the presidency. Recent history says otherwise.