As expectations of the U.S. Congress are abysmally low, we rejoice in the fact members were able to piece together a funding bill that allows the federal government to continue operating.
The concurrent resolution omnibus bill -- or cromnibus -- made it through the Senate during the weekend and on to President Barack Obama for his expected signature. The $1.1 trillion bundle will fund the government through September, except for the Department of Homeland Security which only gets money through February.
Still, we didn't have another shutdown or slowdown, so at least the economy doesn't need to take another unnecessary hit because of legislative ineptitude.
Given the size of the package, there was something for most every group to dislike. The primary piece of pork we object to has been labeled a liberal complaint -- the rolling back of key financial industry reforms put in place after the Great Recession. That only liberal Democrats spoke out against these regressive moves is not surprising, but lawmakers and citizens of every political stripe should be up in arms.
We all recall the recession, correct? While officially only lasting from December 2007 to June 2009, a lot of the country has yet to recover. American households lost approximately $16 trillion in net worth, an estimated 8 million jobs disappeared and were replaced with much lower-paying ones, and tens of thousands of people lost their homes.
While there might be debate on precisely what started the national housing crisis, there is little doubt practices of the too-big-to-fail banks quickly transformed that economic situation into a global financial meltdown. Forcing taxpayers to pay the debts of large lending banks' insanely risky bad investments led to financial reforms designed to prevent such calamity from repeating.
The Dodd-Frank financial reform law, which passed in 2010 yet still doesn't have all of its provisions finalized, made an egregious error as it was formulated. Instead of singling out the five largest banks in the country -- Citigroup, JPMorgan Chase, Goldman Sachs, Bank of America and Wells Fargo -- the law lumped regional and community banks in with them. The resulting forced increases in holdings have had negative effects, and lawmakers throughout the nation have been attempting to repeal as much of Dodd-Frank as possible to assist their constituents.
That makes sense. But the five big banks are being taken care of as well. That makes sense as well, because Citigroup basically wrote the original bill that was passed during the weekend. The big banks do not want the federal government hindering any pursuit of profits, particularly in the $700 trillion derivatives market. More than 90 percent of that lucrative, and highly speculative, market flows through just those five banks.
Gone is the Lincoln Amendment to Dodd-Frank, or the so-called push-out rule. As crafted, it would have forced banks to move 5 percent of their riskiest investments into separate entities that did not have federal insurance protecting them. Even with the push-out rule in effect, 95 percent of the banks' investments had government backing for exotic financial instruments that base their value on underlying variables. But that 5 percent had a negative effect on regional and community banks as well, even if they had not taken part in schemes seemingly designed to create personal bonuses.
So all will be back to normal for the too-big-to-fail banks which, by the way, are even bigger today than they were in 2008. The institutions are back to recording record profits, have no guilt about the public picking up the tab for their previous incompetence, and couldn't care less that only the upper class has recovered from the recession. Apparently Congress doesn't either.
Liberals, conservatives, moderates and all the nuanced groups in between should be outraged. Those five banks, and an extremely accommodating federal government, basically stole livelihoods and nest eggs from 90 percent of America. We're not willing to let them off the hook that easily. Are you?
Editorial by Patrick Lowry