June 13, 2017

Republicans Are Working Hard to Allow Another Financial Crisis

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Last week House Republicans voted unanimously—with one oddball exception—to repeal big swaths of the Dodd-Frank financial reform act. This was, perhaps, not surprising since only six Republicans voted for Dodd-Frank in the first place. Today, the Trump administration weighed in:

Treasury Secretary Steven T. Mnuchin on Monday proposed sweeping changes to the tough Dodd-Frank regulations put in place after the 2008 financial crisis, including a major reduction in the power of the Consumer Financial Protection Bureau…reducing oversight of large financial institutions, providing even more regulatory relief for smaller banks and loosening new mortgage restrictions designed to prevent a repeat of the subprime meltdown.

….“A sensible rebalancing of regulatory principles is warranted in light of the significant improvement in the strength of the financial system and the economy, as well as the benefit of perspective since the Great Recession,” the report said….The report, which included dozens of recommendations, is the first of three ordered by Trump as he looks to fulfill a campaign promise to dismantle the Dodd-Frank Wall Street Reform and Consumer Protection Act.

Put all this together, and it’s pretty obvious that Dodd-Frank is essentially gone if it all passes. It’s even possible that Wall Street would, on net, end up less regulated than it was before the Great Crash.

I don’t expect a serious answer to this, but I have to ask: Do Republicans think any response was warranted to the 2008 financial meltdown? They sure don’t act like it. I mean, Dodd-Frank was hardly a crushing blow to Wall Street. On a variety of measures, financial sector performance is cranking along this year at the very-healthy-but-non-bubble values of 2003:1

And yet, a mere decade after the Great Crash, Republicans want to repeal pretty much everything we did to prevent 2003 performance from turning into 2007 performance and then 2009 performance. Why? After all, in the long run the Great Crash probably hurt Donald Trump’s working-class supporters more than anyone else.

There’s no need to answer this. Unless, of course, you’re a conservative with something serious to say.

1Sources: Employment via Bureau of Labor Statistics; stock performance via Financial Select Sector SPDR Fund via Google Finance; earnings via Yardini Research.

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WHO DOESN’T LOVE A POSITIVE STORY—OR TWO?

“Great journalism really does make a difference in this world: it can even save kids.”

That’s what a civil rights lawyer wrote to Julia Lurie, the day after her major investigation into a psychiatric hospital chain that uses foster children as “cash cows” published, letting her know he was using her findings that same day in a hearing to keep a child out of one of the facilities we investigated.

That’s awesome. As is the fact that Julia, who spent a full year reporting this challenging story, promptly heard from a Senate committee that will use her work in their own investigation of Universal Health Services. There’s no doubt her revelations will continue to have a big impact in the months and years to come.

Like another story about Mother Jones’ real-world impact.

This one, a multiyear investigation, published in 2021, exposed conditions in sugar work camps in the Dominican Republic owned by Central Romana—the conglomerate behind brands like C&H and Domino, whose product ends up in our Hershey bars and other sweets. A year ago, the Biden administration banned sugar imports from Central Romana. And just recently, we learned of a previously undisclosed investigation from the Department of Homeland Security, looking into working conditions at Central Romana. How big of a deal is this?

“This could be the first time a corporation would be held criminally liable for forced labor in their own supply chains,” according to a retired special agent we talked to.

Wow.

And it is only because Mother Jones is funded primarily by donations from readers that we can mount ambitious, yearlong—or more—investigations like these two stories that are making waves.

About that: It’s unfathomably hard in the news business right now, and we came up about $28,000 short during our recent fall fundraising campaign. We simply have to make that up soon to avoid falling further behind than can be made up for, or needing to somehow trim $1 million from our budget, like happened last year.

If you can, please support the reporting you get from Mother Jones—that exists to make a difference, not a profit—with a donation of any amount today. We need more donations than normal to come in from this specific blurb to help close our funding gap before it gets any bigger.

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