Tag: elizabeth warren
Why Regulate Crypto When We Can Just Watch It Crash?

Why Regulate Crypto When We Can Just Watch It Crash?

Cryptocurrencies were born out of the libertarian dream of a financial system free from government regulation. Bitcoin's promoters peddle its ability to let us make transactions without dealing with regulated banks, which, they say, we are not supposed to trust.

What crypto players since stripped of their "investments" saw were some operators getting amazingly rich sitting in their shorts and running numbers on their laptops. The less savvy may not have quite understood how this thing worked, but they could bask in the flattery of being called "brave," per the Super Bowl ads.

The crypto markets crashed amid a sobering string of scandals, crimes and the growing evidence that much of this wealth was basically made-up money. Amid so much suffering, calls have been growing in Washington to impose government oversight on the industry.

The idea is insane.

Nonetheless, the chair of the Securities and Exchange Commission, Gary Gensler, wants to work with Congress to increase his agency's oversight of what he has accurately calls the "Wild West" of crypto. And Sen. Elizabeth Warren (D-MA) is predictably working on a big digital currency bill that, Politico reports, would cover "consumer protections, anti-money laundering rules and climate safeguards for crypto mining."

The climate part refers to the coal-fired power plants providing the obscene amount of electricity to mine bitcoin. And the money laundering (and assorted scams) is made possible by another of crypto's libertarian virtues, anonymity.

Most of the problems Warren cites are being fixed right now through the collapse in crypto values. Many financial experts say the crypto era is now over (although the associated blockchain technology may have good future uses).

When the government gets involved with overseeing investments and the entire category goes south, calls for government bailouts follow. Do the taxpayers really want to be on the hook for invented money? Besides, the biggest crypto selling point is that it isn't regulated by the government.

But aha, some crypto businesses are now saying, OK, as long as we help write the regs. If that happens, again, heaven help the taxpayers.

One such volunteer was Sam Bankman-Fried, whose $32 billion fortune has vanished along, apparently, with the holdings of depositors at his former crypto empire, FTX. Bankman-Fried cleverly broke with others in his industry by actively calling for regulations. That prompted would-be investors to think: A guy who wants his crypto business regulated is probably on the up-and-up, as opposed to other figures in this admittedly dark business.

Some have likened the crypto craze to the Beanie Baby bubble of the 1990s. Beanie Babies were nothing more than cloth dolls stuffed with beans. They originally sold for $5, but their creator, as Vox reports, "used the illusion of scarcity" to make many think they could be incredibly valuable. People lined up outside Hallmark stores to score a new Beanie Baby release. Especially desirable models traded for thousands of dollars. Naturally, a black market for counterfeit Beanie Babies quickly surfaced.

But step aside Beanie Babies, and make room for CryptoKitties. This is a blockchain-based game that works as follows: You turn over one of the cryptocurrencies in return for pictures of cute little cats. They are marketed as unique kitten pictures, and some have sold for over $100,000. But CryptoKitties are nothing more than digital artwork, which means they have no value other than what you think it is.

Agustin Carstens, a former director at the International Monetary Fund, has called crypto "a combination of a bubble, a Ponzi scheme, and an environmental disaster."

Cryptocurrencies were created to avoid government. Government should avoid cryptocurrencies. Let we who trust banks stroll past the smoking crypto ruins. Not our problem — or shouldn't be.

Reprinted with permission from Creators.

GOP Plan: Either Gut The Social Safety Net Or Destroy The US Economy

GOP Plan: Either Gut The Social Safety Net Or Destroy The US Economy

Perhaps the single most consequential story of the midterms season broke this week, and there’s been virtually no coverage from major TV news shows, newspapers, and other mainstream outlets.

On Tuesday, Bloomberg Government produced a bombshell report that points to the massive economic consequences a Republican House would bring for Americans.

If Republicans gain a majority following next month’s elections, the outlet reported, they plan to use a future increase or suspension of the debt ceiling as leverage to force through “top priorities” like seismic cuts to Social Security, Medicare, and other social safety net spending. Failure to act on the debt ceiling would result in an economic catastrophe, experts say.

There has been shockingly little coverage of this development given its significance. It earned a scattering of mentions in publications including New York magazine. And Sen. Elizabeth Warren (D-MA) and MSNBC’s Chris Hayes detailed the stakes on his show Wednesday night.

But the story hasn’t been referenced elsewhere this week on MSNBC, or on CNN, or on Fox News. The nationally broadcast morning and evening news shows on ABC, CBS, and NBC haven’t discussed it. It hasn’t been mentioned in the pages of major newspapers, including The New York Times, The Washington Post, The Wall Street Journal, the Los Angeles Times, and USA Today.

Republican leaders have been cagey about what they will do if they take control of the House of Representatives in November. House Minority Leader Kevin McCarthy (R-CA) produced a vague agenda last month that The New York Timesdescribed as an “an innocuous-sounding set of principles” that was “aimed at uniting members” but was “light on details,” particularly on issues where the party’s traditional positions are unpopular.

But the party’s real strategy is quite specific, and it covers ground far from the GOP’s culture war battlefield.

House Republicans will threaten to force the United States to default on its debt — setting off a global economic crisis — unless Democrats agree to such cuts, all four Republicans vying for the chairmanship of the House Budget Committee told Bloomberg Government:

“The debt limit is clearly one of those tools that Republicans — that a Republican-controlled Congress — will use to make sure that we do everything we can to make this economy strong,” said Rep. Jason Smith (R-Mo.) , the ranking member of the House Budget Committee. He’s seeking the top GOP spot on the tax-writing Ways and Means Committee but said if he doesn’t get it, he’ll remain in his Budget Committee position.

Reps. Jodey Arrington (R-Texas), Buddy Carter (R-Ga.), and Lloyd Smucker (R-Pa.) are seeking the top spot on the Budget Committee if Smith gets the Ways and Means role. Those three agreed Republicans must use the debt-limit deadline to enact fiscally conservative legislation.

The potential GOP committee leaders offered a variety of direct and indirect measures to carry out their vision, but the upshot for the American public is that a GOP House will try to slash the social safety net and plans to to capsize the economy if it doesn’t get its way.

Bloomberg Government’s story follows a September report from Axios stating that “GOP leaders, congressional aides and business groups are preparing for a potential ‘nightmare scenario’ next year if House Republicans take back the majority: a debt limit showdown reminiscent of the near-crisis in 2011.”

Social Security and Medicare are on the ballot next month. If the American public doesn’t know that, it’s in part because the press isn’t telling them.

Reprinted with permission from Media Matters.

'A Liar And A Traitor': Sen. Warren Denounces Kevin McCarthy Over Deception

'A Liar And A Traitor': Sen. Warren Denounces Kevin McCarthy Over Deception

Senator Elizabeth Warren (D-MA) didn’t pull any punches when she laid into House Minority Leader Kevin McCarthy (R-CA) on CNN over last week’s New York Times report of leaked audio in which McCarthy privately blamed then-President Trump for the January 6 insurrection and suggested that he resign.

In her Sunday appearance on CNN’s State of the Union, Warren didn’t mince words when CNN anchor Dana Bash sought her reaction to the unfolding situation. “Kevin McCarthy is a liar and a traitor,” Warren exclaimed.

“That is really the illness that pervades the Republican leadership right now, that they say one thing to the American public and something else in private," Warren added, referring to McCarthy and GOP lawmaker’s willingness to support former President Trump publicly after the insurrection he incited.

Warren expressed her outrage at Trump’s allies in Congress, all of whom, she said, “understand” that Trump’s “attempt to overthrow our government” was wrong.

“The Republicans instead want to continue to try to figure out how to make the 2020 election different instead of spending their energy on how it is that we go forward in order to build an economy, in order to make this country work better for the people who sent us to Washington. Shame on Kevin McCarthy,” Warren added.

Warren’s CNN Interview on Twitter

Warren’s fierce rebuke comes at a time McCarthy is struggling to put out political fires in the Republican party after he is heard on tape admitting he’d “had it” with Trump and opining that the former president should take responsibility for the January 6 attack.

“Well, let me be very clear to all of you, and I’ve been very clear to the president — He bears responsibility for his words and actions. No if’s, and’s or but’s. I asked him personally today, ‘Does he hold responsibility for what happened? Does he feel bad about what happened?’ He told me he does have some responsibility for what happened and he needs to acknowledge that,” McCarthy said in a clip obtained by CNN.

Hours before the audio clips were made public, McCarthy and his spokesperson vehemently denied the Times’ reporting of his conversion, claiming that McCarthy had, at no time whatsoever, made or shared any suggestion that Trump resign.

“The New York Times’ reporting on me is totally false and wrong. It comes as no surprise that the corporate media is obsessed with doing everything it can to further a liberal agenda. This promotional book tour is no different. If the reporters were interested in truth why would they ask for comment after the book was printed?” McCarthy said in a statement.

Although Trump forgave McCarthy for the comments, some staunch Trump-allies, including indicted Steve Bannon and disgraced Rep. Matt Gaetz (R-FLA), have ripped into the minority leader.

McCarthy will need Trump’s support to have a chance at the coveted House Speaker title if Republicans win back the House.

Biden Names 'Progressive Hero' To Top Financial Regulatory Post

Biden Names 'Progressive Hero' To Top Financial Regulatory Post

By Andrea Shalal

WASHINGTON (Reuters) -U.S. President Joe Biden on Friday said he would nominate former Treasury official Michael Barr to be the Federal Reserve's top regulatory official, replacing Sarah Bloom Raskin who withdrew in March after failing to win the backing of moderate Democrats.

Barr, currently a professor at the University of Michigan Law School, was a central figure at the Treasury under President Barack Obama when Congress passed the 2010 Dodd-Frank financial reform law in the wake of the 2007-09 financial crisis, and helped create the Consumer Financial Protection Bureau (CFPB).

"Michael brings the expertise and experience necessary for this important position at a critical time for our economy and families across the country," Biden said in a statement.

The Fed vice chair for supervision is responsible for overseeing the biggest banks, determining proper capital ratios, and represents the United States in cross-border negotiations over international banking standards.

As Treasury assistant secretary for financial institutions, Barr helped shape the Wall Street post-crisis overhaul, Biden said, adding that Barr had strong support across the political spectrum. He noted that Barr had been confirmed on a bipartisan basis for the Treasury post in 2009.

However, Patrick Toomey, the top Republican on the Senate Banking Committee, criticized Barr's support of the Dodd Frank law, which Toomey said enshrined taxpayer bank bailouts. He also said the CFPB was "unaccountable" and "unconstitutional."

"For these and other reasons, I have concerns about his nomination, but I look forward to meeting and discussing these and other matters," Toomey said in a Friday statement.

The president said he would work closely with the Senate Banking Committee to move Barr's nomination forward quickly, and called on the Senate - which is evenly split with Democrats holding the tie-breaker vote - to swiftly confirm his four other Fed nominees, including Jerome Powell for a second term as chair and Fed Governor Lael Brainard for vice chair.

A vote is expected on Powell, Brainard and economists Philip Jefferson and Lisa Cook, both nominated to fill vacant Fed board seats, after the Senate returns from the Easter break.

'This Job Is Vital'

Senate Banking Committee Chair Sherrod Brown said he would support Barr's nomination and strongly urged his Republican colleagues to avoid personal attacks and back him as well.

"At a time when working families are dealing with rising prices while corporate profits continue to soar, this job is vital to ensuring the economy works for everyone," Brown said.

If confirmed Barr, who would have a vote on monetary policy issues, would arrive at the Fed as it is confronting the highest inflation in 40 years, with officials promising an aggressive series of rate hikes this year to rein in prices. The central bank is also planning to cull its $9 trillion balance sheet.

Barr will also have a lengthy to-do list on the regulatory front, including pushing ahead with climate risk tests for Wall Street banks, implementing new capital rules, and drafting new rules for cryptocurrencies and community lending.

Barr's name had been floated for another bank regulatory post, heading up the Office of the Comptroller of the Currency, but some progressives objected, citing his work with some fintech firms after leaving government.

Biden said Barr had spent his career protecting consumers, and played a critical role in creating both the CFPB and the Fed post for which he was now being nominated. He also served at the National Economic Council in the White House.

Former CFPB Director Richard Cordray has described Barr as "a progressive champion," while Senator Elizabeth Warren has called him "a hero" for his work on Dodd-Frank.

"He was instrumental in the passage of Dodd-Frank, to ensure a future financial crisis would not create devastating economic hardship for working families," Biden said.

Raskin withdrew from consideration for the top regulatory post at the Fed on March 15, a day after Democratic Senator Joe Manchin and moderate Republicans said they would not back her, leaving no path to confirmation by the full Senate.

(Reporting by Andrea Shalal; additional reporting by Michelle Price; Editing by Leslie Adler and Franklin Paul)