Chamber of Commerce Launches $100 Million Campaign to Protect Wall Street's Power at Our Expense
Perhaps the greatest public deception surrounding today's financial meltdown is the notion that it is unique -- a once-in-a-lifetime crisis that reflects bad luck rather than any fundamental problem with the U.S. banking system's sway in global politics.
The truth is that throughout the 1980s, the major money center banks were in much the same situation they find themselves in today.
But the U.S. Chamber of Commerce plans to spend $100 million on a lobbying push to tell you the otherwise. It's a very careful strategy designed to ensure that Wall Street maintains the power to hijack the economy and demand epic bailouts from ordinary citizens as a reward for its own greed.
The name may sound like a coalition of your friendly neighborhood small-business proprietors, but in truth, the CoC is the world's most powerful lobbying machine for the corporate executive class.
Between 1998 and 2009, the CoC's campaign contributions dwarfed those of every other interest group in the United States -- over $447 million, more than double the next closest political influence peddler, according to the Center for Responsive Politics. If you add up the total contributions of Exxon Mobil, tobacco giant Altria (formerly known as Philip Morris) and GE, you won't even get close to what the CoC spends on congressional favors.
"The Chamber," as the group ominously refers to itself, opposes key issues like universal health care, expanded unionization, efforts to curb global warming and even pay restrictions for the CEOs of bailed-out banks. Their new lobby assault is an attack on regulation and any other attempt to control the economic wrecking crew in the U.S. banking sector.
"Our biggest worry is the issue with the Congress and then the follow-on regulations," CoC President and CEO Thomas Donohue said in a recent Fox News interview. "We supported the TARP funds, we supported issues to clear up the issues on General Motors, because this is a most extraordinary time. But now it is a moment to say 'OK, we've gone there, let's stop.' "
Donohue's argument is simple. With the economy on the verge of collapse, the government needs to funnel trillions of dollars to failed businesses just this one time, and then leave corporate execs to their own devices once the storm passes. Of course, Donohue's story is also a complete lie. Big bank bailouts have happened before, and without radical changes to the government's oversight of the financial sector, they will happen again.
In 1982, JPMorgan, Bank of America and Citibank were all facing financial ruin. They had made billions in expensive, high-interest loans to developing nations in Latin America, and the nations simply could not afford to repay them. These loans accounted for more than double the amount of money that the banks had set aside as a cushion against losses, according to FDIC data. Accounting for the loans accurately would have meant filing for bankruptcy.
"They were a lot like subprime mortgage loans," says William Black, a senior bank regulator from the 1980s, who now teaches law and economics at the University of Missouri at Kansas City. "They were never very good loans to begin with, so the borrowing never made a whole lot of sense."
But compliant U.S. regulators didn't make the banks record losses on the loans that were never going to be paid back. Between 1982 and 1987, no major money center bank realized any loss on a loan to a nation in Latin America. As the crisis dragged on, the International Monetary Fund eventually stepped in, amid heavy negotiations between foreign governments, the banks and the U.S. Treasury Department.