Leave it to the Repukes to sneak a last minute poison pill amendment into a critical bill ($1.1 trillion spending bill to keep the gov't open). But this bastardized piece of crap cannot be allowed to go forward - no matter it has Obama's "blessing". Sorry, Obama, but we cannot allow an amendment that subsidizes another bankster bailout because risky derivatives are allowed to be insured by Federal Deposit Insurance money. That dog won't hunt and you are backing the wrong dog! (No one wants a government shutdown, but NO one should want to risk another financial meltdown either!)
Let's back up here and get our minds around this: Back in 2008 the mother of all financial crises was spawned after the banksters used the money from ordinary passbook accounts to make bets on risky derivatives called "credit default swaps". The damned things were insinuated all over the place - and no one knew how much of any bond (mislabeled AAA) or other instrument held them. The presence nearly caused a financial calamity of Depression proportions, but the resulting Recession was bad enough with over 20 million losing their jobs and many losing up to half of their 401ks. Massive bailouts followed in the wake - including under Bush (for AIG) then in the early months of Obama's tenure - with a stimulus package of nearly $793 billion.
All this is history, which makes one wonder why Obama himself doesn't remember it and is prepared to back this jackass mutant of a spending bill which threatens the same thing.
Why? In the aftermath of the 2008 credit meltdown, the Dodd-Frank bill was passed in some form containing a key regulation which stipulated that the risky derivative trades could henceforth only be done on the banksters' own dime. Thus, the federal government would no longer insure those trades. In other words, banks could do the risky trades themselves if they wanted, but they'd no longer be insured by the taxpayers.
When I say insured, I mean using the FDIC (Federal Deposit Insurance Corporation) monies. The FDIC, for those unaware, insures all regular passbook savings of up to $250,000. Thus, if I have $250,000 in an account (I should be so lucky) and the bank goes under because of bad financial dealings - then FDIC pays and I can recover the losses. (You can have more money in the account but it's only insured up to the $250k limit). This sort of depositor protection came into regulations after so many millions lost all their money with the collapse of banks during the Great Depression.
But in the poison pill amendment that was stuck in this spending bill, the banks can once again use FDIC monies to back up their risky trades. In other words, the assholes that stuck this thing in the spending bill are paving the way for a new credit meltdown and implosion if the derivatives blow up the banks' trades again. And who will lose? Who do you think? John and Mary Taxpayer!
This is why this perfidy can't be allowed to go forward and thank goodness to Nancy Pelosi in the House and Elizabeth Warren in the Senate for mounting an opposition. They both understand that the risk is too damned great to allow this abomination to pass- even with a government shutdown possibly looming. Evidently, Obama is too desperate to have the spending bill pass with this mutation - but that's too bad.
The best chance to kill the thing is in the House where an unlikely alliance of Tea Party members and liberal democrats (who are needed because there aren't enough Tea Party votes) would bring it down. With both factions withholding support it has to die, unless the poison amendment and gift to Wall Street and the banks is removed.
As Elizabeth Warren put it yesterday:
"This is a democracy and the American people didn't elect us to stand up for Citigroup. They elected us to stand up for all the people. I urge my colleagues in the House - especially my Democratic colleagues whose votes are essential to moving this package forward to withhold support from it until this risky giveaway is removed from the legislation."
Amen! And until that risky giveaway is removed, no damned spending bill!
See also:
http://smirkingchimp.com/thread/richard-eskow/60022/this-is-not-a-drill-the-budget-deal-is-a-disaster
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Footnote: Alas, the House Ds caved and voted for this perfidy, aware that a Continuing resolution would lead nowhere but into a world of hurt next year - when the Rs have majority control of both houses. Without Obama willing to use his veto pen, it was the proverbial losing wicket.
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