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The Obama administration is clearly trying to keep Congress from taking legislative action against derivatives, the “financial weapons of mass destruction” that set off the economic crisis. “Geithner claims he wants credit-default swaps brought under control, but only through stricter regulation, not by law.” California Congresswoman Maxine Waters wants derivatives banned outright, and has submitted legislation to that effect. But so far, she has no co-sponsors.
Maxine Waters vs. Fatal Derivatives
A Black Agenda Radio commentary by Glen Ford
“When it comes to making rhetoric into law, Obama’s team sides with the money bags.”
President Obama’s sent his dog-and-pony show on banking regulation to Capitol Hill, last week, with Treasury Secretary Tim Geithner as Master of Obfuscation. The Obama administration spews lots of rhetoric about reining in the investment banks and hedge funds so that they don’t get another chance to destroy themselves and what’s left of the economy. But when it comes to making rhetoric into law, Obama’s team sides with the money bags that were his biggest campaign contributors and now run his economic policy. Geithner promised he would control derivatives, the Wall Street inventions that billionaire George Soros has called “financial weapons of mass destruction .” The explosion of derivatives is widely acknowledged to have set off the global economic crisis. Credit-default swaps are among the most volatile and dangerous types of derivatives. Geithner claims he wants credit-default swaps brought under control, but only through stricter regulation, not by law. Amazingly, Geithner argues that passing specific laws would make it easier, rather than harder, for the high rollers to break the rules – a totally illogical and dishonest position. Instead, he wants regulators to keep the players in line – but Geithner refuses to say which part of the bureaucracy the regulators should come from, and the Obama administration won’t offer anything more definitive until September. “We are supposed to trust the same regulators that have always been in bed with Wall Street.”
Geithner’s mission, as directed by the president, was to discourage the Congress from interfering with Wall Street through legislation. Instead, we are supposed to trust the same regulators that have always been in bed with Wall Street – the guys that allowed Bernie Madoff to operate with impunity decade after decade – and to trust the Obama economic team, made up of the same people that set the derivatives Frankenstein on its path of destruction under President Bill Clinton.
The Obama team says it will force the high rollers to back their derivatives with more capital, so that they will be less likely to implode. But the derivatives market is nominally valued at $592 trillion, about 12 times the value of all the goods and services produced per year on the planet Earth! It would require far, far more money than exists in the entire world to make the planet safe for derivatives. They must be abolished, before they implode again.
Black California Congresswoman Maxine Waters has introduced legislation to do just that: ban credit-default swap derivatives. “Preventing all credit-default swaps is essential,” said Congresswoman Waters, “to bringing stability to the market and preventing a similar crisis in the future.”
The crisis set off by derivatives has stripped African Americans of hundreds of billions of dollars in wealth – a catastrophe of historical proportions that has undone much of the economic progress of several generations. Congresswoman Waters’ bill, HR 3145 , has no co-sponsors, as yet. We shall see how the rest of the Congressional Black Caucus responds. This is a clear choice of doing what is necessary to protect Black America, or going along with Barack Obama and his Wall Street friends.
This week’s featured author is Biko Mandela Gray. Gray is Assistant Professor of Religion at Syracuse University. His book is Black Life Matter: Blackness, Religion, and the Subject.
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