I wrote yesterday about the misguided coverage regarding the revision to the Dodd-Frank law which is part of the omnibus spending bill. There is one more point which needs to be added.
The provision in the omnibus bill does not allow all banks to get involved with all derivatives under the umbrella of the FDIC. The bill will allow banks to deal in only certain types of less risky derivatives. Without going into great detail, it is worth understanding that derivatives are used by farmers, airlines and others to manage risk. This serves an important and helpful role in our economy. This sort of derivative is not the kind that nearly put AIG out of business in 2008. The really risky ones are not affected by the change in the bill.
The proposed change was voted for separately in the House a few months ago but the Harry Reid blocked consideration of that bill in the Senate. In the House, however, 35% of the Democrats voted for the measure. In addition, there was support for the change expressed by former congressman Barney Frank, who is the Frank of Dodd-Frank. My own congressman, Jim Himes, who actually wrote the language in the section covering derivatives also supported the change. If two liberals like Frank and Himes can understand the reality of the bill, why must Elizabeth Warren demagogue the issue? I assume she understands what the change actually does. Is this just another lie by Warren to get ahead? Remember, Warren went through her academic career claiming to be a Native American, a move that got her many benefits. During her campaign for the senate, we learned that the basis Warren had for that claim was that her aunt once told her that she had high cheekbones like the local Native Americans.
The provision in the omnibus bill does not allow all banks to get involved with all derivatives under the umbrella of the FDIC. The bill will allow banks to deal in only certain types of less risky derivatives. Without going into great detail, it is worth understanding that derivatives are used by farmers, airlines and others to manage risk. This serves an important and helpful role in our economy. This sort of derivative is not the kind that nearly put AIG out of business in 2008. The really risky ones are not affected by the change in the bill.
The proposed change was voted for separately in the House a few months ago but the Harry Reid blocked consideration of that bill in the Senate. In the House, however, 35% of the Democrats voted for the measure. In addition, there was support for the change expressed by former congressman Barney Frank, who is the Frank of Dodd-Frank. My own congressman, Jim Himes, who actually wrote the language in the section covering derivatives also supported the change. If two liberals like Frank and Himes can understand the reality of the bill, why must Elizabeth Warren demagogue the issue? I assume she understands what the change actually does. Is this just another lie by Warren to get ahead? Remember, Warren went through her academic career claiming to be a Native American, a move that got her many benefits. During her campaign for the senate, we learned that the basis Warren had for that claim was that her aunt once told her that she had high cheekbones like the local Native Americans.
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