Posted on 10/29/2008 11:36:47 AM PDT by Palin4President
It turns out that Congressman David Price (B.J. Lawson’s opponent in this year’s election) has some very good friends in the financial sector, which has given his campaigns a whopping $637,000 over his career, more than 2/3 of which has come from financial PACs. Just this year, the financial sector has contributed about $57,000 to his campaign, with 65% coming from PACs.
How has Congressman Price rewarded this lucrative support? Quite handsomely, it appears. In 1999, he voted for the Gramm-Leach-Bliley Act, which repealed the Glass-Steagall regulations barring financial institutions from performing both commercial and investment banking, as well as a combination of other services. The financial sector lobbied very hard for this legislation. Many analysts have cited this particular action as a contributor to the current financial crisis, as a wave of merger and acquisition activity ensued in its aftermath and allowed massive leveraging of portfolios to the point where many institutions became “too big to fail.”
Free market economics is certainly the way to go. However, our current financial system is by no means a free market system. The Federal Reserve has complete power to set and manipulate interest rates and to create money and easy credit out of thin air, and it delegates this authority to private banks via fractional reserve banking. This is the ultimate example of a legislated monopoly, as monetary competition via alternative currencies is banned while the Federal Reserve and private banks collectively are given power to create debt-based money.
Given this current situation, it is a particularly bad idea to have removed a regulation like Glass-Steagall, which was absolutely necessary in order to maintain the integrity of financial institutions, curb the excesses of central bank-initiated credit expansion, and prevent institutions from becoming “too big to fail,” which as we have seen usually comes at quite a cost to the taxpayer. It does not prevent the inevitable financial crises and recessions occurring as a result of central banking policies, but it at least delays them and limits the cost of individual bank failures to the taxpayer.
Voting to eliminate Glass-Steagall displays very poor and corrupted judgment on the part of Congressman Price. It is particularly interesting to note that while he spends time mocking the idea of free market economics and Constitutionally-limited government, proponents of such ideas such as South Carolina Governor Mark Sanford both opposed the Gramm-Leach-Bliley act. This certainly contradicts Congressman Price’s implication that those who promote free market ideas do not have the elevated understanding and/or appreciation of the complexities of our economic system that he arrogantly projects himself as having.
Eliminating Glass-Steagall while maintaining the fundamental characteristics of the monetary system essentially amounts to corporate welfare, as banks are enabled with anti-competitive power by government with a support system ready via the Fed’s discount window in cases of financial trouble. As such, Congressman David Price is guilty of kowtowing to the influence of big banks and endowing them with special privileges with his support of Gramm-Leach-Bliley.
But his service to the financial behemoths who line his coffers doesn’t stop with his support for this one massively impacting bill. In nearly every major piece of legislation dealing specifically with the financial sector since this legislation, he has sided with the interests of powerful financial institutions.
He voted for the 2005 bankruptcy reform bill, which made it harder for individuals and families to file for Chapter 7 bankruptcy and instead pushed them to file for Chapter 13 bankruptcy. Under Chapter 7, most or all debts are forgiven, easing the burden on debtors (albeit while damaging their credit ratings) while providing inconvenient (but often not insufferable) costs to lenders. Under Chapter 13 bankruptcy, repayment of debt under a court-set plan is mandatory, making life harder for debtors.
Thus, Congressman Price essentially acted as a collection agent for credit card companies and big banks in voting for this bill. This is despite the fact that most families who declare bankruptcy do so due to health care costs. Congressman Price frequently discusses the need to ease burden of health care costs on families, so he reveals quite the cognitive dissonance in having supported the bankruptcy reform bill.
And as many know quite well by now, Congressman Price voted TWICE for a $700 billion bailout of large financial institutions whose irresponsible lending rendered their financial standing shaky. This bailout represents the ultimate example of corporate welfare, and Congressman Price was ready to serve the will of his paying masters in supporting it.
The good news is that financial institutions do not employ Congressman Price; we do. As such, it’s time for the people of the 4th District of North Carolina to fire him this election year for serving corporate interests, rather than his constituents.
This makes almost no sense, since it's been stand-alone broker-dealers (Lehman, Bear) and largely stand-alone banks (WaMu, Wachovia) that have failed, while the already combined entities such as JP Morgan have weathered the crisis well and in fact been able to rescue broker-dealers precisely because of Gramm-Leach-Bliley.
Obviously I'm no fan of Price, but you could do better than to criticize him for supporting two largely Republican bills.
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