Sen. Elizabeth Warren

We Interrupt This UnReal Reality Show....


The news got crazier this week, but there’s a piece that’s dangerous, but eye-glazing, —easy to miss in the midst of a porn star’s lawsuit against our President, followed by the House Intelligence Committee’s Republicans issuing an all-clear on Trumpish collusion with Russia

It feels like some horrible Trump reality show. You're fired, Rex, for faulting Russian government. But now for an important commercial: Pay attention to Pocahontas!

That’s Trump’s nickname for the smartest Senator on the Senate Banking Committee, Elizabeth Warren from Massachusetts (originally from Oklahoma, where her family lore claimed native blood when that was a racial slur). Warren’s books are an important source in Screwnomics. She tracked bankruptcies back in the 90s and found medical costs the top cause for rising rates. She next headed a commission overseeing TARP bank bailout program, and seeing Wall Street’s bamboozles, proposed the Consumer Protection Agency. Elected the first female Senator from Massachusetts in 2012, she and her money-saving agency have been under attack ever since.

Now she’s sounding a new warning. After the 2008 meltdown, Congress passed a banking reform bill called Dodd-Frank, and ever since Wall Street has tried to undo it. The devil’s in the details. Many of the bill’s measures, designed to regulate Wall Street’s mega banks, were hard for small banks, and resulted in bank mergers. What we need is a healthy network of local, small banks. But in a legislative effort to lessen the regulatory load on these smaller banks and credit unions, Wall Street’s bullies have laid claim to the same regulation break.

Isn’t that fair? No, all things are not equal, says Warren. S.2155 is called The Economic Growth, Regulatory Relief and Consumer Protection Act,” and is supported by 50 Republicans and 16 Democrats. What would it do? Dodd-Frank required all bank holding companies with more than $50 billion be supervised by the Federal Reserve. What Warren has renamed as The Bank Lobbyist Act raises that threshold to $250 billion, increasing risk five-fold.

It would weaken stress tests for 25 of the 38 biggest banks in the country, megabanks like Wells Fargo, Bank of America, JPMorgan Chase and Citigroup. Ten years ago these same billionaire banks got billions in taxpayer dollars, after they collapsed the economy. So now they get an anniversary present??! Warren’s right to rename it. Tell your Senator you want an amendment. Yes, help community banks, but small is less risky. Wall Street’s bigness, which always puts them first in line for government welfare, crushes the communities we live in.

Wish U Were Here, Janet Yellen

Janet Yellen, Federal Reserve Chair 2014-2018

Janet Yellen, Federal Reserve Chair 2014-2018

I’m going to miss the first woman to ever head the Federal Reserve, Janet Yellen, appointed by President Obama. She has just served the shortest term of any recent Chair. No, she wasn’t ill, newly pregnant, or incompetent; she just wasn’t reappointed by President Trump. She was known for consensus building.

One of two mandates of the Federal Reserve is sustaining employment, helping to finance jobs. Under Yellen’s tenure, unemployment decreased from 6.7 percent in 2014 to 4.1 percent in 2018. Trump took credit, tweeting women’s job rates while pink-hatted women marched on his inaugural anniversary (while the government shut down.) But without explanation or complaint, he’d already replaced Yellen with yet another pale male, William Powell.

Her male predecessors served terms more than twice as long: Ben Bernanke (8 years), Alan Greenspan (19) years, and Paul Volcker (8) years. Longer tenures supposedly help ensure financial stability. In Screwnomics, I complain women like Yellen can and do learn to “mansplain” the economy. Her monetary addresses to Congress delivered like those before her:  a firehose of lukewarm, gushing water-words impossible to take in, and strangely mesmerizing. What’d she just say?? Still, the financial press widely appreciated moderate Yellen.

She exasperated Sen. Elizabeth Warren, who pressured her more than once. Most recently it was over the Wells Fargo frauds. That’s the other Federal Reserve mandate, to regulate the banking system. But then as Janet left, she gave two parting gifts to the country: one was a raise in the long-term Treasury bond rate to cool down an overheated market. The other was the first big-bank punishment of its kind for Wells Fargo, removing board members, along with some real structural changes to address its being overlarge.

Will Mr. Powell stay the course and enforce those penalties on WF? Those rising interest rates? The word is that Trump’s money-men want to further undo regulation, setting freer the already free market, making it a libertine. That hasn’t gone well in our near past. I’m nervous, seeing last week’s near 1600-point DOW drop last week, but generally agree with those like Yves Smith at Naked Capitalism,  who say it’s a needed correction for overvalued bubbles

But I also agree with those who warn this new volatility has less to do with interest rates, than with fears about US national stability. Wall Street on Parade writers, Pam Marten and Russ Marten, say that the stock market, which has shrugged off the President’s low approval rating at home, and a diminishing reputation for steady, credible world leadership, are fools to ignore Trump’s chaos.

The whole world knows about the Republican tax gift to our richest, essentially gutting the government budget, weakening it further. We’re going to spend millions on a military parade, not on veterans health care, and money for ICE, not dreamers. About now, I am mentally writing steady Janet a note that says, Wish you were still here.