Distortion again

The Dodd-Frank Act of 2008 is on its way to be repealed. The comprehensive banking regulations were designed to protect consumers, curtail corruption, and eliminate risky investments. On June 8^th, 2017, however, the House of Representatives passed a bill that would abolish these regulations. The bill now only needs to pass through the Senate and the President before the Dodd-Frank Act is officially repealed.

This is deeply troubling. The regulations were a response to the 2008 financial crisis, when risky investments like credit default swaps led to the collapse of the housing market. You might have seen the movie, The Big Short. It’s a great film for understanding the economic necessity of Dodd-Frank. Its ending was overly pessimistic though—it acted like no laws were passed to prevent the same thing from happening all over again. The movie failed to acknowledge Dodd-Frank, which went to great lengths protect our country from economic disaster, and our citizens from financial ruin.

Now that protection is about to vanish. If the Dodd-Frank-Banking Rules are repealed, we are back to square one. We’ll head back to the days when predatory lenders used shady mortgages to enrich themselves at the expense of the poorest Americans. The days when Lehman Brothers gambled recklessly with the American economy.

I never thought I’d see those days again. I thought we had learned our lesson. Alas, the Financial Choice Act, as its backers are calling it, follows a long trend of right wing politics demolishing basic protections for the average American citizen in the name of freedom. In reality this is just another legislative move meant to appease big investors and the rich.

To understand this phenomenon in greater detail, read The Distortion chapter in my newest book, Reclaim American Democracy.