While the government may have voted itself some $1.1 trillion to spend until the end of fiscal 2015, the biggest contention in the Cromnibus, or as it is also known, the Cronybus, vote which passed the House with the narrowest of margins on Thursday night, was the swaps push-out provision - drafted by Citigroup - and which, as we detailed yesterday [7], could put American taxpayers on the hook for up to $303 trillion in gross notional derivatives as a result of "siloing" swaps, and their associated risks, in FDIC-insured operating companies.
We stated that "we now know with certainty that to a clear majority in Congress - one consisting of republicans and democrats - the future viability of Wall Street is far more important than the well-being of their constituents."
The only question is what was the (s)quid for this particular quo. Now thanks to an analysis by the WaPo, we have the answer.
First, it should come as no surprise that Republicans would be willing to vote for a bill that seeks to indemnify Wall Street from future failure. After all, Wall Street's proximity to the GOP, and vice versa, is hardly a contentious issue. And yet, it was "only" 162 republicans who voted for the Cromnibus - some 67 voted against. Which means that whipping the 57 democrats who also voted for the Bill to get the crucial 218 passing votes was far more critical to assure passage of the swaps push out provision.
The map below shows the final geographic breakdown of the vote by party:
[8]
What exactly motivated those 57 Democrats to break ranks with the rest of their party - the 139 democrats voted against the spending bill - and to be not only on the receiving end of Elizabeth Warren's ire, but also accountable for dumping a few hundred trillions of derivatives into the laps of US taxpayers.
The answer, what else: money. The WaPo reports [9]:
"We cross-referenced the vote with data from the Center for Responsive Politics on how much each member had received in campaign contributions from the finance/insurance/real estate industries. This isn't only from PACs affiliated with those industries, we'll note; it also includes employees of firms in those industries. On average, members of Congress who voted yes received $322,000 from those industries. Those who voted no? $162,000. Here's the split by party.
[10]
Averages can be deceiving, of course, so here's another way to look at it. We color-coded each member of the House by party and then by how much money he or she had received from those industries as a function of the member who had received the most. On the chart below, darker colors mean the members took in more cash from the finance sector.
[11]
It's clearly noticeable, particularly on the Democratic side, how those who had received the most in campaign contributions were also more likely to vote "yes" on the bill.
WaPo tries to hedge what is clearly influence peddling by Wall Street: "It's important to remember that there isn't as clear a line from campaign contributions to congressional votes as people often assume. That's a tough argument to make in this context, of course, but it's worth remembering that it's not clear in which direction the influence flows. Did the financial, et al., industries give to these members of Congress because they are more likely to be sympathetic on issues such as bank deregulation? Did Congress vote for deregulation because of the contributions? The answer is a third option: Influence is complex and often impossible to trace."
Actually, no. The answer is indeed as simple as it appears after a cursory glance: the criminal syndicate that is Wall Street, a syndicate that has seen zero incarcerations over the Great Financial Crisis, and instead has paid of regulators and any cops on the beat from throwing bankers in jail thanks to some $178 billion (and counting) in kickbacks [12] to the government...
[13]
... traffics in money: money spent to purchase the goodwill, influence and votes, of "for sale" puppets in Washington.
Most importantly, none of the above is to insinuate that Democrats or Republicans are more "pro-Wall Street":
The No. 1 recipient of contributions from those industries is that dark red box in the middle of the Republican "yes" votes: Speaker John Boehner.
The reality is that both parties are equally guilty of aiding and abbetting the robbery of the middle class by Wall Street and its "privately-owned" Federal Reserve.
What is most insulting is how cheaply Wall Street's Congressional marionettes will betray their constituents.
Finally, as long as Wall Street is allowed to purchase votes and peddle influence for what amounts to pennies on any given bank's quarterly EPS number, nothing will ever change, until what little is left of America's middle class realizes just how corrupt the American system of government has become, and changes it. Violently. Unfortunately, with $303 trillion derivatives it has just been saddled with, it is now far too late.
