Taibbi: Forget the Memo – Can We Worry About the Banks?

The Internet is exploding today with cries of #ReleaseTheMemo, with the GOP throwing a big fat j’accuse at the Democrats. Republicans are pounding the table over what by now is about the millionth news story to be called “worse than Watergate” since the Russia scandal first broke. “People will go to jail!” chirped Florida Republican Matt Gaetz.

The GOP claims congressional committees have been shown a memo detailing shocking Obama-era surveillance abuses involving the Russia case. Dithering town-crier types like Iowa’s Steve King have spent the last day or so insisting to reporters that if only they could see the explosive material, they’d be lighting torches and marching in search of Obama administration security officials to burn as witches.

“The sickening reality has set in,” King yelped.

This trick – i.e. “If only you could see the amazing secret stuff I can’t tell you about, although actually I can” – has been employed with increasing regularity by both sides in the past few years, particularly with regard to #Russiagate.

By all means, if the memo is important (although I doubt it) let’s let the public see it. But followers of this story should also remember that if this or any classified document somehow exculpates Donald Trump on any front, he’s had the power all along to declassify such information.

Why Trump hasn’t done so on a number of these occasions has been one of the enduring mysteries of this affair. It’s given pause to even the most hardened Russiagate skeptics.

This includes people like former federal prosecutor Andrew McCarthy of the National Review. McCarthy has been highly critical of the Robert Mueller investigation, but has also repeatedly wondered why Trump is not lifting the veil on some of these documents.

One of the few figures in the media to explore holes in Russiagate theories propagated by both sides, McCarthy had this to say in August:

“I can’t get past a nagging question: Why must we speculate about whether the Obama administration abusively exploited its foreign-intelligence-collection powers in order to spy on Donald Trump’s political campaign? After all, Trump is president now. If he was victimized, he’s in a position to tell us all about it.”

So #ReleaseTheMemo seems curious and disingenuous at best. But the Republicans don’t have a monopoly on such behavior, either.

Recently, there’s been an effort in Democrat-friendly media to walk back one of the major assumptions of #Russiagate, i.e. that the FBI’s Russia investigation was spurred by either the Steele report, the case involving Carter Page, or both.

Stories have come out in both the Washington Post and the New York Times in recent weeks that appear to contradict their own earlier reports on the matter, pointing now at Mueller-target George Papadopoulos as the ostensible root of the Russia probe.

There’s no conclusion to be drawn from any of this, other than that the genesis of the Russiagate investigation remains mysterious and neither party seems particularly motivated to clarify the matter for the public.

The Republicans seem anxious to keep hinting that the privately-generated Steele report was used improperly as part of a FISA warrant application, while both the Trump administration keeps passing up opportunities to release what it knows about the matter. It’s a bizarre stalemate that will eat up a lot of airtime, without really moving this interminable affair forward in any significant way.

Predictably, there have been more concerning stories in recent weeks having to do with Republicans and Democrats agreeing, rather than trading dumb accusations.

Last week, for instance, numerous congressional Democrats – including Nancy Pelosi and chief Russia hawk Adam Schiff – voted to reauthorize the virtually limitless surveillance powers of this president. This is despite the fact that those same congressional Democrats spent much of the last year claiming Trump is an agent of a foreign power.

This is a classic example of something that’s been axiomatic in Washington for ages: that both parties tend always to be interested in expanding executive power, no matter who’s in office or what the political situation. In this case, the principle of expanding presidential authority outweighed even concerns of abuses by the likes of Donald Trump.

In another bizarre episode, at least ten Senate Democrats recently crossed the aisle to support a rollback of key provisions of the Dodd-Frank banking reform bill, the killing of which of course has long been a major policy goal of Trump’s.

The Dodd-Frank bill story is particularly disturbing, because it signals a rare potential area of consensus amid the otherwise reassuringly dysfunctional three-headed monster that is the lunatic Trump, establishment Republicans, and Democrats.

The bill has been pitched as aid and regulatory relief to small banks and credit unions. Such groups are the widows and orphans of financial reform: nobody’s ever against helping them, which is why even giveaways to Wall Street behemoths are often dressed up as aid to regional bankers.

The Dems who crossed the aisle to support the Dodd-Frank rollback bought into the lobbyist-flogged idea that Too-Big-To-Fail banks have too many punitive regulatory requirements, and moreover that “smaller” companies (i.e. firms with less than $10 billion in assets) should be exempt from the already watered-down Volcker rule, which prevents depository banks from gambling for their own accounts.

One of the main ideas behind the proposed bill, which passed the banking committee 16 to 7, is changing the definition of a “Too Big to Fail” institution from having $50 billion in assets to having $250 billion in assets. This quintupling of the size limit would mean a number of huge companies would now enjoy relaxed capital requirements and other benefits. Only about 10 companies would be left to face the more stringent rules.

This moves us in the opposite direction of the most urgently needed kind of Wall Street reform. De-concentrating financial power (and the systemic risk associated with such concentration) would be the best guarantee that we never have a repeat of 2008, in which all the biggest depository banks put the entire financial system at danger by acting like giant hedge funds.

Reform advocates have long sought to make banks smaller, and also to make sure financial companies keep depository banking and gambling activities separate. The bill proposed would represent a step back on both fronts.

Although the bill is opposed by powerful Senators like Elizabeth Warren, other influential Democrats co-sponsored it, including Heidi Heitkamp of North Dakota, Jon Tester of Montana, and Mark Warner of Virginia.

“This bill increases the risk of another taxpayer bailout, and I will continue to challenge supporters of this bill – from both parties – to explain why they stand on the side of big banks instead of working families,” said Warren.

All in all, this whole period has been a classic example of how congress operates. The parties fight publicly about something that’s either irrelevant, inaccurate, or far from a resolution.

Meanwhile, a quiet consensus pushes forward a handful of unsexy but important bills and amendments, usually economic or deregulatory in nature. Those issues tend to be the ones that demand, but rarely get, the most attention.