In her attacks on Obama’s pending trade deals, Elizabeth Warren has argued that could undermine US financial regulations like Dodd Frank. The Administration has taken to trying to dismiss Warren as not knowing what she was talking about. More skillful defenders of the traitorous trade deals took the tact of saying that Warren could in theory be right, but the odds of her fears playing out were so remote as to not be worth worrying about.
In a long, careful article in The Nation, George Zornick explains even with the limited information that we have now about the contents of proposed treaties like the TPP and its ugly European step-sister, the TTIP, Warren’s worries are valid. For instance:
Like with TPP, we don’t know all the details of TTIP yet, but advocates have many fears. One is that the Federal Reserve’s plan to impose separate liquidity requirements on foreign banks might be scotched…
And it’s not just Dodd-Frank: the leaked EU proposal for TTIP has a provision that new regulations first be “analyzed” to determine if they have an unacceptable impact on trade. Americans for Financial Reform (AFR) worries that this could “impose a presumption that regulations must be judged on the basis of their trade impact rather than their effectiveness as public interest policies promoting financial stability.”
Keep in mind that by design, a substantial portion of Dodd Frank implementation was kicked down the road to allow lobbyists to have a second go at weakening it, with studies required before rules would be written. Significant portions of rulemaking have yet to be completed and would appear to be subject to the TTIP analysis requirement, giving the banking industry yet another change to gut legislation.
But an example of Warren’s concerns came out of left field, as reported by the Wall Street Journal:
A US rule that prohibits banks from taking risky bets with their own money violates the North American Free-Trade Agreement because it bans US banks from trading triple-A-rated Canadian government debt, Canada’s finance minister said Wednesday…
Canadian concerns about the Volcker rule’s treatment of sovereign debt aren’t new. In 2012, Canada joined European countries and Japan in raising concerns about the law’s reach..
Mr. [Joe] Oliver noted that the Volcker rule reflects concerns about the credit standing of some foreign securities. That concern doesn’t apply to Canada, he said, because Canada’s credit rating is better than the US government and US municipalities…
“I believe – with strong legal basis – that this rule violates the terms of the Nafta agreement,” Mr. Oliver told a securities industry audience in New York that included the US ambassador to Canada, Bruce Heyman. “I hope the United States administration sees that changing the Volcker rule is in its own best interests and that of its biggest trading partner.”
Pretending that the only risk of holding foreign securities is credit risk is disingenuous. Foreign bond investors are also subject to currency and interest rate risks. Needless to say, the Treasury Department disagreed firmly with Oliver’s view.
One has to wonder, given that Canada has been unhappy about how the Volcker Rule applied to Canadian government debt since 2012, why the Nafta argument was hauled out at this juncture. Has the negotiation of the TPP led Canada to look at trade treaties more seriously as a way to get its way? Regardless, the fact that Canada thinks it has a strong case for having its bonds exempted from the Volcker Rule looks to be a harbinger of the creative ways these pending, toxic trade deals could be deployed, given their far more sweeping provisions.
We’re not backing down in the face of Trump’s threats.
As Donald Trump is inaugurated a second time, independent media organizations are faced with urgent mandates: Tell the truth more loudly than ever before. Do that work even as our standard modes of distribution (such as social media platforms) are being manipulated and curtailed by forces of fascist repression and ruthless capitalism. Do that work even as journalism and journalists face targeted attacks, including from the government itself. And do that work in community, never forgetting that we’re not shouting into a faceless void – we’re reaching out to real people amid a life-threatening political climate.
Our task is formidable, and it requires us to ground ourselves in our principles, remind ourselves of our utility, dig in and commit.
As a dizzying number of corporate news organizations – either through need or greed – rush to implement new ways to further monetize their content, and others acquiesce to Trump’s wishes, now is a time for movement media-makers to double down on community-first models.
At Truthout, we are reaffirming our commitments on this front: We won’t run ads or have a paywall because we believe that everyone should have access to information, and that access should exist without barriers and free of distractions from craven corporate interests. We recognize the implications for democracy when information-seekers click a link only to find the article trapped behind a paywall or buried on a page with dozens of invasive ads. The laws of capitalism dictate an unending increase in monetization, and much of the media simply follows those laws. Truthout and many of our peers are dedicating ourselves to following other paths – a commitment which feels vital in a moment when corporations are evermore overtly embedded in government.
Over 80 percent of Truthout‘s funding comes from small individual donations from our community of readers, and the remaining 20 percent comes from a handful of social justice-oriented foundations. Over a third of our total budget is supported by recurring monthly donors, many of whom give because they want to help us keep Truthout barrier-free for everyone.
You can help by giving today. Whether you can make a small monthly donation or a larger gift, Truthout only works with your support.