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Live Chat: Robert Scheer on Obama’s Call for Less Regulation
Posted on Jan 21, 2011
Anderson: OK. Well, going back to your column, we have a question from Truthdig member BarryDalton, who says: “Your column is fair in regards to the Clintons, but isn’t it too early to tell whether Obama is simply greasing the wheels for the next election without any real intention of weakening important regulations? Certainly there has to be one or two regulations that give a government worker something to do but aren’t particularly effective. He can have his political cake and eat it too.”
Scheer: Well, look. I hope I’m dead wrong on Obama. I mean, I voted for Obama; I actually made a financial contribution that at the moment I couldn’t afford, because I was afraid he might lose. And I would like nothing better than to be dead wrong on my assessment of this administration. Trust me. And I would say that even if it were a Republican administration. I want a happy ending. I’d like to think we can get out of this mess. I’d like to think we could solve the problems we have. You know, it doesn’t give me any great pleasure that there are 50 million Americans who have mortgages that are worth considerably less than the value of their house. It doesn’t make me feel better that millions of people are losing their homes, and when they lose their homes they have to pull their kids out of school, and their whole self-esteem, their whole sense of their life is destroyed. So, you know, I don’t like wallowing in despair. And I would love to wake up six months from now or two years from now and say, “God, I got Obama wrong.” I hope that happens.
However, I think the signs are very worrisome, because as I said in the column, Obama seems to be following the Clinton trick. And it’s working! The Wall Street Journal poll now shows he’s up to 54 percent popularity. He’s seen as a moderate. He’s going to probably get more money from Wall Street—he got quite a bit from Wall Street in the last election—and you know, he may get that second term. If it were just a question of getting rid of needless regulations…and, trust me, I’ve lived in this country for a long time; I know we have a lot of needless regulations. I’m not a fan of government bureaucracy; I have to go over to county and city buildings all the time and argue about this tax or this bill or what have you. I don’t live a life where I have agents who take care of that. And I don’t really … obviously we could get rid of all sorts of regulations. That’s not what they’re talking about. He didn’t come out with just, “Oh, let’s get rid of needless regulations.” He wrote a piece for the Wall Street Journal that was a white-flag column. It was throwing up his hands and saying “Tell me what to do.” And then he’s going to the Chamber of Commerce with the explicit message: “How can we cooperate? Tell us what to do.”
Here’s a Chamber of Commerce—deceitful crowd—that put money into the people, to win the Republicans who were demagogues in this midterm election, to finance them, blaming not Wall Street, blaming not the radical deregulation, but blaming the government and its faint-hearted efforts at regulation. And so the language is very similar to that Clinton employed: “We have to have a modern economy. We have to have regulations for the 21st century. We have to compete abroad,” et cetera, et cetera. And so he’s really talking about derailing the Consumer Protection Agency. I’m afraid he is. Maybe I’m wrong. I hope I am. One way we can make sure that I’m wrong is if we can mount letter-writing campaigns and e-mail campaigns, and people can say “Hey, we’re worried, President Obama. Don’t betray us on this.” That’s why I wrote the column: I’m trying to get people agitated about this so that they will do something.
Square, Site wide
But in the main, it’s not really a question of regulation. No one likes regulations, unless you happen to be some mindless bureaucrat who just wants to push people around. What we’re really talking about is anti-fraud. We’re talking about transparency. This word “regulation” gives the wrong impression. What you really want is to make sure when the banks put mortgages together, that they’re doing it in a transparent way. When they extend a loan, make sure that they’re following reasonable procedures of informing the consumers, that the language is clear, that people are not being deceived. So we’re really talking about anti-fraud rather than regulation. And that’s what was destroyed by the policies of Clinton, of George W. Bush; and the radical deregulation was really allowing these people to commit fraud and have it be legal. That’s what we’re really talking about: the collateralized debt obligations, the credit default swaps, to let AIG issue what they claim were insurance policies on these things and not put any money up to back it up. The incredible leveraging that went on, the deception in the writing of mortgages, the packaging people’s nest eggs, their security, their dream of retirement into some kind of security that they sold and resold and, you know, tranches and all this gibberish—which everybody now concedes. And that happened not because we had excessive regulation; it’s because we ended fraud prevention. That’s really what happened.
So what I’m hoping is that this Consumer Protection Agency, which is the only real thing to come out of Obama so far, will have some muscle. It looks like it’s going just the other way; the Republicans, elected with the help of the Chamber of Commerce and the House, are now going after Elizabeth Warren, they’re going after her agency, they’re threatening not to fund it. So this already weakened consumer protection is in danger of being wiped out, and clearly they’re trying to reverse even the small gains in regulation of the financial community that were pushed through in the last Congress.
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