For all the talk of extreme partisanship in Washington — Republicans and Democrats blaming each other instead of fixing bad immigration laws, soaring medical and school costs, or the proliferation of armed knuckleheads — the two sides have quietly, sweetly spent the last year jointly advancing dozens of bipartisan laws deregulating their mutual donors in the financial-services industries.
I'd like to believe what they're saying: that these proposals speeding toward President Trump's desk really will simplify government lending and investing limits, leading to more, better transactions that enrich the American people.
Though that's not what happened last time. Ten years ago this summer — three months before the stock market collapsed and credit markets froze — I wrote in this space that the impending financial crisis was brought to us by "a strange 1990s alliance of Democratic social engineers and Republican finance-industry allies."
Policies endorsed by Sen. Phil Gramm (R., Texas), sometime head of the Senate banking committee; Larry Summers, President Bill Clinton's Treasury secretary; and Alan Greenspan, the so-called "Maestro" who ran the Federal Reserve, encouraged lenders to finance more and more home loans to buyers unlikely to pay them back, and to resell those disguised bad loans to investors who had little warning how risky they were, all with minimal regulation.
They thought markets and marketeers could be trusted to act sensibly, ignoring history. They acted as if, when credit and investment is good, a lot more must be better. They were surprised the engine wrecked.
"Top minds in both parties failed to read the signs that led to the credit crisis," I concluded. "Let's hope they've learned something. Too bad no one forecloses on bad ideas."
And this summer, presto, we're back!
On Monday — as President Trump embraced Russia President Vladimir Putin in Finland — the bipartisan leaders of the House banking committee posted a long and friendly list of what they called "strong, bipartisan capital-formation legislation" from two pals who, if you took their typically aggressive public rhetoric at face value, you might have thought were blood enemies from Planet Red and Planet Blue.
Their joint statement: "Today, Congresswoman Maxine Waters (D., Calif.), Ranking Member of the House Committee on Financial Services, and Congressman Jeb Hensarling (R., Texas), Chairman of the House Committee on Financial Services, announced that they have reached an agreement on a package of strong, bipartisan capital-formation legislation to help America's small businesses and entrepreneurs and to protect investors."
These bills, which they have combined into "the 'JOBS and Investor Confidence Act of 2018,' is comprised of 32 separate pieces of legislation that have passed the Committee or House this Congress with broad bipartisan support." One after another. Over the past year. While we were distracted by our president's performances and his critics' outrage.
They spoke as one: "We all support small businesses, their access to capital, and protecting investors," claimed Waters.
These laws, on final passage, will "breathe new life into markets that are suffocating under aging regulations," promised Hensarling.
Is American finance "suffocating", with stocks at record highs, and employers complaining they can't find workers, and generous Trump tax cuts that should help take the edge off stiff Trump import fees? How much more help does our financial and speculative sector need from Washington?
The bills, with names like "Helping Angels Lead Our Start-Ups," "Modernizing Disclosure for Investors," "Encouraging Public Offerings," and "Investing in Main Street," reduce public-reporting requirements and investor protections facing small business people and dealmakers that want to raise a lot of money in a hurry. Some of the bills extend government subsidy programs. In the name of eliminating red tape, they continue the peelback of investment restrictions that began in Obama's second term, promoting new and lightly-regulated entities like "venture exchanges," as if we don't have enough penny-stock promoters pushing marginal pot and Bitcoin bets already.
I hope it all works as advertised. But what could explain this two-party rush to help financiers?
Many financial-services donors give mostly to Republicans and conservative groups. Jeff Yass' Bala Cynwyd-based Susquehanna International Group staff gave $1 million each in this campaign cycle to both the Club for Growth Action corporate support group and the libertarian, antiregulatory Protect Freedom PAC. Blue Cross health insurers, Bank of America, and many other financial giants also give predominantly to the GOP and conservatives.
The biggest financial service donors — including the largest contributors, the hedge funds Paloma Partners and Soros Fund Management — donated mostly to Democrats and liberals. Even Renaissance Technologies, the hedge fund famously led by early Trump and Steve Bannon funder Robert Mercer, has given a little more to Democrats than to Republicans this year. It's the same at JPMorgan, the nation's most successful commercial bank.
It's been this way, often as not, since at least the 1920s, when DuPont Co. and J.P. Morgan officials led and financed both the Democratic and the Republican national committees.