I can't believe I'm saying this, but I miss Harry Reid.
As leader of Senate Democrats from 2005 to 2017, the Nevada senator did two critical things on financial regulation. First, he shepherded through the Dodd-Frank financial reform bill in 2010. Second, he bottled up multiple attempts to punch holes in the bill. It was by no means an adequate response to the 2008 financial crisis, but it could have been worse.
To see how, look no further than Reid's successor, New York's Chuck Schumer. The new Democratic leader is providing crucial assistance to Republicans and President Trump to get a sweeping rollback of Dodd-Frank pushed through Congress. It is political and policy malpractice — and amounts to announcing open season on African-Americans and the poor, so that his state's marquee industry can bleed them for profit.
Let's quickly review what this bill does. It quintuples the assets needed for a bank to be considered "systemically important" and thus subject to stricter regulation (from $50 billion to $250 billion). It exempts banks with less than $10 billion from the Volcker Rule, and opens a huge legal loophole for the very largest banks to reduce their capital requirements. It also exempts 85 percent of banks from collecting data used to prevent lending discrimination, and rolls back regulations on mobile home loans. The Congressional Budget Office estimates that the risk of financial crisis will be increased.
As I have previously argued, this deregulation is profoundly racist both in general and in its specifics. Deregulated banks cause economic crises that hit black Americans by far the worst — for example, during the foreclosure crisis the percentage of black households underwater on their mortgage spiked over 20-fold, while over the same period the corresponding white figure increased "only" 6-fold. Meanwhile, if they aren't carefully prevented from doing so, Wall Street preys on black people. That's a constant in American history going back to before the revolution.
Of course, black people are not the only victims of economic crises. Poor people in general and a considerable fraction of the middle and upper-middle class also got hammered by the 2008 crash and the ensuing weak recovery. If there's one structural reform needed in the American economy above all others, it's to sharply reduce the size and risk of the bloated, cancerous financial mass sucking the life from the rest of economy.
Now, Schumer himself did not vote for the bill. But make no mistake, he was the key to its passage. Party leadership has a considerable power in the Senate, both direct and indirect. He could have twisted arms and kept this thing off the floor as Reid did — but instead, as The New York Times reports, "he has given conservative-state Democrats leeway to vote as they see fit and has urged progressives in the party to tread lightly when criticizing moderates."
Given Schumer's very long history of fundraising from and doing favors for Wall Street, rolling back financial regulation is pretty clearly also how Schumer himself "sees fit," even if he can't be seen to actually vote for this turd.
That's doubly true given the large number of Democratic votes necessary to surmount a filibuster. As The Washington Post's Jeff Stein calculates, if every Democratic senator from a state Obama lost in 2012 voted for it, there would have only been 6 defections, not enough to get to 60. It took absolutely unjustifiable — and thus more easily-stopped — betrayal from blue and purple state senators like Colorado's Michael Bennet, Virginia's Tim Kaine and Mark Warner, and Delaware's Chris Coons and Tom Carper, to get it over the finish line.
It's no coincidence that Wall Street cheered when it became clear Schumer was going to take over after Reid. They knew exactly what they were going to get from him, and now they've got it — and might get more.
The limp justifications for this monstrous act are utter piffle. The community banks supposedly laboring under crushing regulatory burden are actually swimming in profits. This is nothing more than an act of successful bribery from an industry that almost exactly 10 years ago was in the process of caving in on itself and taking the world economy down with it.
As Ta-Nehisi Coates once noted, the really pernicious forms of racism in latter-day American society are generally quiet, subtle, and plausibly deniable. You start with maps about which sorts of neighborhood are eligible for government-insured mortgages, and end up with a racially segregated ghetto. You start by preventing the regulation of subprime mortgage derivatives, and end up with Wells Fargo flogging "ghetto loans" to "mud people" who qualify for better ones.
To be sure, Schumer and his merry band of Wall Street stooges will no doubt declaim any racist beliefs. But one doesn't need to be motivated by personal animus against black people to make policy which will have a baldly racist impact on American society. They are doing it right now.