Sam Rayburn, a longtime speaker of the U.S. House, once said, “Every now and then, a politician ought to do something just because it’s right.”
Last week, 45 U.S. senators dodged an excellent chance to do just what Mr. Sam
advised. At issue was a straightforward, common-sense amendment proposed by
Dick Durbin, D-Ill. It would have allowed bankruptcy judges to help hundreds of
thousands of financially strapped homeowners who now find themselves trapped by
exploding, exorbitant interest rates that bankers had attached to their loans.
Here was a conspicuous opportunity for even the most ethically blind of our
congress-critters to take a principled stand, for Durbin’s bill practically had a flashing red-and-yellow neon arrow attached to it,
declaring, “Vote Here for the People Against Greedy Bankers.”
Actually, even GBs would have benefited, for the bankruptcy provision would have
allowed families to stay in their homes and keep making monthly payments to
banks (albeit in reduced amounts). Also, banks could still make a profit
(though not a killing), and there would be far fewer vacant homes going on the
market, thus giving a badly needed break to America’s depressed housing market.
What a sensible idea! So, naturally, the Senate stomped it to death.
The members were prodded to do so by Bank of America, Goldman Sachs, JPMorgan
Chase, Wells Fargo and other upstanding members of the hyper-aggressive GB
lobby. These are, of course, the same banksters who for years speculated
rapaciously on people’s homes, created a housing bubble that has since burst and shattered our
economy, reduced their own financial fiefdoms to insolvency, then rushed to
Washington to unscrew the Capitol dome and help themselves to a taxpayer
bailout that is nearing $3 trillion.
Yet, the very idea of allowing bankrupt families to get a small break in
bankruptcy courts has caused Wall Street elites to squawk like a banty rooster
choking on a peach pit. They dispatched hundreds of well-connected lobbyists to
Congress, to the White House and to key government agencies to nix Durbin’s amendment (which, ironically, would have been attached to a bill that awards
even more billions of taxpayer dollars to the banks).
Among the influence peddlers hired by bailout recipients were more than 100
former lawmakers, top congressional staffers, White House aides and agency
officials. Goldman Sachs alone has more than 30 ex-government officials in its
lobbying army, including former House Majority Leader Dick Gephardt and the
former top staffer to house banking chairman Barney Frank.
The first and chief target of this furious lobbying blitz was a guy who had long
backed the homeowners protection plan, promising again and again last year that
he would lead the fight to pass it: Barack Obama. The banker lobbyists were
aided in this effort to back off Obama by two White House insiders who have
shown themselves to be shameless Wall Street softies — Treasury Secretary Timothy Geithner and top economic advisor Larry Summers.
Timid Timothy reportedly argued that even a small, tightly targeted bankruptcy
provision for common folks would create “uncertainty” for big investors in Wall Street banks.
Never mind that millions of homeowners are facing crushing uncertainty over
their mortgages, Obama and team promptly disappeared from the legislative
fight, abandoning Durbin.
This let Wall Street’s hired guns go after pusillanimous, bank-financed Democrats. Sen. Evan Bayh of
Indiana, for example, was a swing vote, counted on by Durbin. But with no
pressure from Obama, Bayh was free to sidestep principle and vote his own
political pocketbook. Up for re-election next year, Bayh’s top campaign donor is Goldman Sachs.
Needing 60 votes for passage, Durbin got 45. In all, a dozen Democrats gave Wall
Street a big wet kiss by voting against Durbin’s amendment, which also was a vote against America’s hard-pressed homeowners — and against Mr. Sam’s sage admonition.
“The banks are still the most powerful lobby on Capitol Hill,” sighed Sen. Durbin afterward. He added this sobering note: “They frankly own the place.”
Jim Hightower is a national radio
commentator, columnist and author.
This article appears in May 7-13, 2009.
