Here’s Massachusetts Congressman Michael Capuano yelling at today’s Capitol Hill hearing with eight big bank CEOs, who demanded that Congress give them a second set of keys to the U.S. Mint (just to make it more convenient during the all-nighter printings, right?) He asks if their companies invest in credit default swaps (“hell fuckin’ yeah”), and then adds, “So basically all or most of you engaged in all or at least some of the activities that actually created this crisis, in my opinion. Because every one of those activities, especially the SIVs [structured investment vehicles], ESPECIALLY the SIV’s — to me, I think they’re illegal. I cannot believe no one’s prosecuted you on this.” Rah rah rah!
These public theater hearings with the various failed assholes of the Financial Sector get more grating as they go along. Congressmen will deliver their best outraged, populist rants — usually glazed with this sort of “HOW DID BAD STUFF HAPPEN?” bewilderment — but several days later will almost certainly vote to give these people hundreds of billions in loans under the “preconditions” that they must use it wisely! and not be greedy! because there will be an oversight panel!, all of which is useless grandstanding because they will never include actual legal, binding tools in the terms of the loans with which to punish these people for reckless usage of taxpayer funds. This is a crucial point! A five-minute lecture on Morality & Greed will not stop Wall Street from taking the most vulgar, possibly nation-destroying risks to inflate their bonuses by a few million dollars, as long as those risks are in any way legally justifiable!
Which leads us back to Michael Capuano’s rant today, about how he “thinks” credit default swaps and such are “illegal” — it is his opinion! — and “cannot believe” that people who’ve used them haven’t been prosecuted. Well let us help you figure out why, Mister Congressman! Here’s the roll call for a House bill called “Making Appropriations for Labor, Health and Human Services for Fiscal Year 2001” that President Clinton signed into law on December 21, 2000. You voted for it! And included in this package was something called the “Commodity Futures Modernization Act of 2000,” the one that — thanks to Alan Greenspan’s weird, intrusive lobbying efforts — completely deregulated the derivatives market. So that is probably why these bankers haven’t been prosecuted.