In 2007, former US Vice President Al Gore, published The Assault on Reason (1). Now ten years old, the book not only laid bare how groups in our society were attacking science, the value of evidence-based judgments and rational thinking, it foreshadowed what we are currently witnessing at the hands of the Trump administration.
We are now well beyond Gore’s “assault on reason”. We have entered a twilight zone where facts no longer matter, reality can be flat-out denied, and words are not to be taken at face value; brash campaign promises are to be applauded irrespective of their provably negative consequences. Just as bad, perhaps even worse, we are witnessing an attack on the foundations of our democracy: civility, a free press, a credible judiciary, and a government that is not constantly under the sway of special interests and “dark money” (2). This latter point will be addressed in the two commentaries that follow.
In the aftermath of the 2008 great recession, Senator Chris Dodd and Representative Barney Frank (both Democrats), joined forces to construct legislation that would impose prohibitions and constraints on financial institutions whose previous reckless lending practices played such a prominent role in the economic meltdown. In spite of Congressional Republican opposition, Dodd-Frank passed into law and has been on the books in spite of steady conservative attacks on it.
Earlier this week, the president insisted that Dodd-Frank be repealed. He claimed that it was making it much too difficult for small business owners to borrow and gain the capital they needed to expand their enterprises and thus create jobs. Yet, on analysis (3), the assertion of “difficulty in borrowing” has been unfrocked as a fiction.
There is absolutely nothing in Dodd-Frank that would limit borrowing by a small business owner who has a reliable cash flow, a solid business model and collateral. It would most certainly impact a person seeking funds for a start-up who is under-capitalized, has yet to establish a reliable cash flow and has no collateral; in other words, a bad risk. Such an individual would be the equivalent of the hundreds of thousands of folks who, circa 2005 – 2008, sought home mortgages with little chance of being able to meet their monthly payments. As they drifted into default, their lenders bundled their bad papers and sold them off at a discounted rate to investors who should have known better. When those bundles diminished in value to the point of being near-worthless, the investors were stuck, billions of dollars were lost and disappeared from the economy as we lapsed into the aforementioned recession.
Given the foregoing history and the exposure of Trump’s deceit, the question is begged, “Who benefits from the repeal of Dodd-Frank?” The obvious answer is the lending institutions who would then be free to make the kinds of questionable loans described above and at higher interest rates because of the risks involved. In other words, the repeal is a give-away to the very entities that Trump railed against in his faux populist campaign rhetoric; i.e. banks and Wall Street. It is also a headlong plunge down the slope that led us into the worst economic collapse since the Great Depression.
The confirmation of Betsy DeVos
Yesterday, it took the unprecedented tie-breaking vote of VP Mike Pence to hand Ms. DeVos the cabinet position of Secretary of Education. During her confirmation hearings, this woman presented herself as singularly unqualified for the job. Indeed, much of her history has been as an advocate for charter schools with nothing more than lip service offered in support of public education.
In the run-up to the final vote and Pence’s tie-breaker, Republican senators were swamped with calls to oppose DeVos’ confirmation. With just two exceptions (4), those pleas fell on deaf ears. Given the DeVos family’s donations of thousands of dollars to Republican senatorial candidates that should not have been surprising. We are thus left with the firm impression that important appointments and elected positions now go to the highest bidder. Our government “of the people, by the people” lays wounded.
- Gore, Al; The Assault on Reason. New York: The Penguin Press. 2007.
- See Jane Mayer’s book Dark money”, a review of which appeared at this site.
- Lydia Depillis; “Analysis; Dodd-Frank won’t be easy to dispose of”. Houston Chronicle, 2-7-2017; p B-1 and 5.
- The two laudable exceptions were Republican Senators Susan Collins and Lisa Murkowski.