Obama Plans Gutting Regulations for Corporate Favorites – by Stephen Lendman
Promising change after eight Republican dominated years, Obama betrayed the public trust by special favors given business at the expense of essential growing needs.
Spurning them, in fact, he shows contempt for the things he rhetorically supports, proving he’s no different from the worst of the bipartisan criminal class, serving wealth and power interests only.
As a result, he backed Wall Street’s financial coup d’etat, looted the nation’s wealth for them, institutionalized speculation and corporate racketeering, wrecked the economy, and consigned millions to impoverishment without jobs, homes, savings, social services, or futures.
Now more is planned, first announced in a January 18, 2011 Executive Order, (EO) titled, “Improving Regulation and Regulatory Review” to benefit business, no matter the public cost.
On February 7, Obama elaborated in a Chamber of Commerce speech, promising to “remove outdated, unnecessary regulations” to free business more than ever since the roaring twenties to do whatever they damn well please, saying:
“I understand the challenges you face. I understand you are under incredible pressure to cut costs and keep your margins up. I understand the significance of your obligations to your shareholders and the pressures that are created by quarterly reports. I get it.”
What he doesn’t “get” or give a damn about is growing human need. Instead, he focuses solely corporate bottom line concerns no leader should prioritize over greater ones affecting millions of troubled households during the nation’s gravest economic crisis in decades, one he’s worsening, not alleviating.
In fact, acting more like one of them than one of us, he discussed various special favors he had in mind, including lowering corporate taxes and “breaking down some of the barriers that stand in the way of your success,” eliminating “outdated and unnecessary regulations” to save billions of dollars annually, no matter the incalculable public cost.
Dismissively he said:
“I’ve ordered a government-wide review,” and if there are rules on the books that are needlessly stifling job creation and economic growth, we will fix them….I’ve also ordered agencies to find ways to make regulations more flexible for small business,” promising to make government as accommodative as possible, giving away the store if there’s anything left from the wreckage he already caused.
Obama Unveils Corporate Friendly Deregulation Plan
On May 26, Reuters writer Alister Bull headlined, “White House takes steps to cut business red tape,” saying:
Obama unveiled a plan to save corporations “billions of dollars over time, seeking to placate businesses complaining about what they see as undue regulatory burden.”
In fact, billions of dollars in political contributions freed corporate giants from numerous regulations since the 1970s.
Jimmy Carter, in fact, spearheaded deregulation Nixon and Ford began by hiring Alfred Kahn to head the Civil Aeronautics Board (CAB). The 1978 Airline Deregulation Act followed. It dissolved the CAB, removed industry restraints, eased consolidation, and subsequent bills deregulated trucking and railroads – the 1980 Motor Carrier Act and 1980 Staggers Rail Act, following the 1976 Railroad Revitalization and Regulatory Reform Act.
Carter also phased out interest rate deposit ceilings, and gave the Fed more power through the 1980 Depository Institutions and Monetary Control Act, removing New Deal restraints and enabling subsequent administrations to go further.
Under Reagan, energy deregulation followed, notably oil and gas, then electric utilities under GHW Bush and Clinton, the result being high prices, brownouts, and Enron-like scandals.
In the 1980s, the 1982 Alternative Mortgage Transactions Parity Act led to exotic feature mortgages with adjustable rates or interest-only. They carry low “teaser” rates for several years, after which they’re adjusted much higher, often making loans unaffordable, especially for low-income, high-risk borrowers using subprime and Alt-A loans.
The 1982 Garn-St. Germain Depository Institutions Act deregulated thrifts and fueled fraud, so much that the Savings and Loan crisis followed. As a result, hundreds of banks failed, sticking taxpayers with most of the $160 billion cost. In 1987, the Government Accountability Office (GOA) declared the S & L deposit insurance fund insolvent because of mounting bank failures.
In 1988, global regulators imposed minimum bank capital requirements, known as the Basel Accord or Basel I, enforced in G-10 countries.
In 1989, the Financial Institutions Reform and Recovery Act abolished the Federal Home Loan Bank Board and FSLIC, transferring them to the Office of Thrift Supervision (OTS) and FDIC. It also created the Resolution Trust Corporation (RTC) to liquidate troubled assets, assume Federal Home Loan Bank Board insurance functions, and clean up a troubled system.
Clinton era telecommunications deregulation let media and telecommunication giants consolidate, gave new digital television broadcast spectrum space to current TV station owners, and let cable companies increase their local monopoly positions.
His 1994 Reigle-Neal Interstate Banking and Branching Efficiency Act let bank holding companies operate in more than one state. In 1996, the Fed reinterpreted Glass-Steagall to let bank holding companies earn up to 25% of their revenue from investment banking. The 1998 Citicorp-Travelers merger followed, combining a commercial/investment bank with an insurance company ahead of the 1999 Financial Services Modernization Act, also called the Gramm-Leach-Bliley Act (GLBA) authorizing it.
In 2000, the Commodity Futures Modernization Act (CFMA) passed, legitimizing swap agreements and other hybrid instruments, at the heart of today’s problems by ending regulatory oversight of derivatives and leveraging that turned Wall Street more than ever into a casino.
New Deal reforms were enacted to restrain corporate fraud and abuse. Gutting them decades later to the present, business was freed to pillage at will, Washington turning a blind eye to the worst of their racketeering.
Obama, in fact, exacerbated the worst of bad practices, especially for his Wall Street favorites, literally rewarding their criminal fraud with at least $12.3 trillion dollars of taxpayer money and perhaps more yet to be disclosed, if ever.
Obama’s “Simpler, Smarter Regulatory System”
Thirty federal agencies proposed eliminating or modifying hundreds of regulations to benefit business, despite compromising environmental concerns, sacrificing public safety, and disregarding general welfare issues.
While details so far are sketchy, several proposals include:
— excusing states from requiring air pollution vapor recovery systems at gas stations;
— ending “outdated” Endangered Species Act regulations;
— freeing business from 1.9 million regulatory reporting hours relating to workplace safety;
— curtailing railroad and other safety standards;
— stressing bottom line priorities over public benefits; and
— assuring further deregulation follows current proposals.
Office of Management and Budget (OMB) director Jacob Lew said:
“Paperwork and reporting burdens are a serious problem….This is not a one time project. This is the beginning of what will become a new way of doing business.”
Responding, the Chamber of Commerce applauded “some commonsense recommendations that will save businesses some time, money, headaches, and resources,” adding much more needs to be done, saying:
“What we need is a plan to make our flawed regulatory system smarter, less intrusive, and more accountable.”
National Resources Defense Council (NRDC) Legislative Director Scott Slesinger said:
“The purpose of the regulatory system is to protect the health and well-being of the American public. Any proposed changes should be closely evaluated to ensure they protect the public, first and foremost.”
“Coming at a time when the entire system for protecting (public safety) is already under political attack by some in Congress, we will closely examine these specific change to ensure that federal agencies continue to put the public’s interest above all else.”
From what’s so far known, public safety and welfare are being sacrificed for bottom line considerations, Obama prioritizing his efforts for them.
Stephen Lendman lives in Chicago and can be reached at firstname.lastname@example.org. Also visit his blog site at sjlendman.blogspot.com and listen to cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.