Cross posted from http://retiregarrett.com
Every time Scott Garrett crosses a line and gets no pushback, he becomes emboldened to go further the next time. I’d be hard pressed to find a single day that I don’t come across something said, done or voted upon by Scott Garrett in which I’m not deeply disturbed. It is my hope that in passing along the information to the people who follow Retire Garrett I am able to gently nudge you into taking action to stand opposed in whatever form you deem appropriate. What I learned last evening has caused a sea-change in my thinking. I can no longer convey information and hope you’ll get involved. I can’t hope to gently nudge the readers here to do something. It’s time for us to shout it from the rooftops. Scott Garrett has to go! With no hyperbole, I’m comfortable is saying to you that Scott Garrett has gone too far and he must be replaced for the good of the Republic.
The Nation’s George Zornick published an article yesterday whose title says it all: House Poised to Gut Derivative Reforms. I’ve railed in the past at Scott Garrett’s brazen efforts to aid Wall Street at the expense of the rest of us. However, Mr. Garrett’s latest efforts have crossed a line I previously thought no American – politican or otherwise would dare cross. If Scott Garrett has his way, hard won regulatory reforms designed to rein in dangerous derivative trades like credit default swaps will be rolled back to the days before Dodd-Frank. Zornick spells it out in simple terms:
Unregulated, shadowy derivatives played a key role in the 2008 financial crash-Warren Buffett called them “financial weapons of mass destruction”-and the Dodd-Frank financial reforms took serious measures to bring them out into the open. Even Matt Taibbi, a noted critic of the overall bill, said the derivative rules were the “biggest win of all.”
There’s no need to guess who’s leading the charge to roll back these necessary reforms because you already know the answer; Scott Garrett. The Swap Execution Facility Clarification Act, introduced by New Jersey Republican Representative Scott Garrett would as Zornick wrote, “kneecap the open-market derivative reforms established in Dodd-Frank.”
Before the bill was passed, derivatives were mainly traded in the dark; neither regulators nor customers were privy to crucial price details. Only the traders, who have obvious motives for self-enrichment, knew this information.
Dodd-Frank directed the Commodity Futures Trading Commission to create rules to bring derivative trading out into the open… in late 2010 the CFTC began pushing forward rules that derivative market participants must post prices on a “centralized electronic screen” that customers can easily access; one-to-one phone dealings would be barred.
Garrett’s bill is ostensibly meant to preserve the ability of firms to conduct phone trades-something the Democrats on the committee actually support. But as written, it would gut most all of the derivative reforms regardless of how they are conducted.
A second piece of legislation passed Garrett’s committee – with Garrett as a primary cosponsor would prevent the CFTC and the SEC from regulating derivative trades by overseas subsidiaries of American companies. In other words, the same bad actors who helped cause the worst economic recession since the Great Depression could simply conduct their derivative trading through overseas subsidiaries and go back to doing business as usual as they did before Dodd-Frank.
It’s no longer good enough to rely upon the Senate and/or the Administration to do the right thing. As Zornick noted, “these two bills would defang much of the Dodd-Frank efforts to rein in dangerous derivatives. It’s truly astonishing-these instruments have already demonstrably caused massive harm to the US economy, and the negative effects continue to this day.”
The voters in the 5th Congressional District of New Jersey are the only people that can stop Scott Garrett cold. He needs to be voted out of office. If Scott Garrett and his Wall Street contributors have their way, we’ll be right back where we were at the end of the Bush Administration.
We need to contact Senators Lautenberg and Menendez and urge them to stop these two pieces of legislation in their tracks. It’s not simply good enough to modify these bills; they have to be killed. We need to spread the word to people we know in other states so that they can contact their Senators as well. We need to reach out to the Administration and voice our fervent opposition to the efforts of Scott Garrett and his like-minded collaegues.
This is a call to arms. Scott Garrett has got to go and we’re the ones who have to do it. Make your voices heard. Register to vote. If you’re already registered, register a friend. Talk to anyone who will listen. Call your Senators. Write a letter to the editor of your local paper. Volunteer on a campaign. Don’t let up. Scott Garrett isn’t just a representative with a different perspective. Scott Garrett is a dangerous man and we can no longer afford to have him in Congress.