Should be in every edition.

Terrific news for the oppressed small-to-great-big banks of America! Yesterday, the House passed its version of the banking bill, which will finally remove some of the regulations put in place on the banking industry after it crashed the economy in 2008. The bill, which undoes a lot of the Dodd-Frank regulatory structures designed to prevent banks from making risky gambles with publicly insured assets and to reduce the likelihood of another cascading financial failure like the 2008 crisis, will surely free the banking industry from the regulatory burdens that kept them from profitability for so long! How badly needed was this bill? Well, as CNN reported yesterday, American banks just had their most profitable quarter in history:

Bank profits soared by 28% during the first three months of 2018 to $56 billion, according to statistics published by the FDIC on Tuesday.

The blockbuster earnings report, boosted by President Donald Trump's tax cuts and the healthy economy, easily tops the prior record set just three quarters earlier.

Just think, if it weren't for regulations keeping the brakes on, banks could have REALLY made some money. As CNN notes,

The Dodd-Frank reform law was signed into law in July 2010 by former President Obama. Since then, bank profits have increased by 135% as the American economy climbed out of the Great Recession.

Talk about job-killing regulations, huh?

As we discussed when the Senate took its whack at rolling back Dodd-Frank, the new, slimmer regulations have been pitched to the public as necessary to save community banks, which were allegedly closing all over the place from the burden of complying with Dodd-Frank and its requirement that any bank with assets of $50 billion or more receive close scrutiny from the Federal Reserve, and undergo regular "stress tests" to ensure they can handle some big losses without causing a domino effect in the rest of the financial system.

As Vox notes, however,

community banks aren’t exactly suffering financially: According to the FDIC, community banks reported increases in net income from the year before in every quarter of 2017.

The threshold for close scrutiny by the Fed has now been raised to $250 billion, which means a whole lot of large regional banks will also be free of having to show they can handle significant losses. That's not a trifling matter -- while the very biggest banks will still have to prove they can fail without dragging the economy down with them, former congressman Barney Frank, the lead sponsor of the post-recession fixes, warns that while the failure of a single biggish bank might not cause a recession,

the failure of two or three such institutions would put us in “Lehman Brothers territory,” referring to the investment bank that filed for bankruptcy in September 2008, precipitating the financial crisis. Countrywide Financial, one of the country’s largest subprime mortgage lenders that was at the center of the 2008 mortgage crisis, had assets in the $210 billion range before it failed.

Frank has previously said he thought the $50 billion floor for closer scrutiny was too low, and had caused problems for smaller banks, but that he thought a more reasonable fix would be to require close regulation of institutions once they reach $125 billion in assets.

Oh, golly, and just as Congress let car dealers off the hook from a regulation preventing discrimination in auto loans, this bill will roll back anti-discrimination rules in lending by banks. Heck, if you can't screw minorities, why even run a bank?

The new law will also allow foreign megabanks to avoid regulatory scrutiny by setting up US holding companies that can pretend they're good old flag-waving US businesses.

There's lots more, including a provision to let smaller institutions play fast and loose with home mortgages, because how could those ever cause trouble, huh? But the really important thing to remember here is that Congress has proven that it can get something done on a bipartisan basis: Slobbering all over the financial sector that keeps members flush with campaign donations. Truly, we are about to be Great Again, and if the whole thing results in another financial crisis, we can always blame poor people for owning refrigerators and getting talked into bad loans that leave them homeless.

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[CNN Money / Vox / WaPo]

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Doktor Zoom's real name is Marty Kelley, and he lives in the wilds of Boise, Idaho. He is not a medical doctor, but does have a real PhD in Rhetoric. You should definitely donate some money to this little mommyblog where he has finally found acceptance and cat pictures. He is on maternity leave until 2033. Here is his Twitter, also. His quest to avoid prolixity is not going so great.

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Image: Marriott Hotels

Great GOP wordsmith Frank Luntz, the guy who gave us the "death tax" and who urged the George W. Bush administration to talk about "climate change" since it was less politically motivating than "global warming," did some more of his characteristic word magic today! While staying at the Hotel Imperial in Vienna, Austria, Luntz offered this cautionary tale about the evils of socialism, as illustrated by the shoddy conditions in a 5-star luxury hotel owned by Dubai's "Al Habtoor" conglomerate and operated by Marriott:

Talk about your grim hellholes! Apparently, there's only one elevator in the entire building, and it's been broken for three days, proving that European-style socialism is a failure that should never be imported to the USA, where -- damn it! -- all buildings work!

As some smartass pointed out, now Luntz may have to take the STAIRS, like a common Bolshevik!

We're still trying to get our heads around how a delay in getting an elevator fixed in a luxury hotel owned by the United Arab Emirati proprietors of Dubai's

  • Habtoor Grand Resort
  • Waldorf Astoria Dubai Palm Jumeirah
  • Habtoor Palace, LXR Hotels & Resorts
  • V Hotel, Curio Collection by Hilton
  • Hilton Dubai Al Habtoor City
  • Metropolitan Hotel Dubai
  • Al Habtoor Polo Resort

as well as

  • Imperial Hotel, a Luxury Collection Hotel, Vienna (Austria)
  • Hilton London Wembley (United Kingdom)
  • Hilton Beirut Habtoor Grand (Lebanon)
  • Hilton Beirut Metropolitan Palace (Lebanon)
  • President Abraham Lincoln Springfield – a DoubleTree by Hilton Hotel (United States)
  • InterContinental Budapest (Hungary)
  • The Ritz-Carlton, Budapest (Hungary)

is an example of the horrors of socialism, but then, we don't earn the big bucks like Luntz does. Austria is among the 14 richest countries in the world, so we're fairly certain it's not a commie hellhole. Then again, there is a very strong social safety net, so maybe people in subsidized housing stole all the elevator parts. Or perhaps the elevator would have been fixed sooner if only Austria didn't have such strong unions. It's a mystery.

Or maybe it's that NATIONAL socialism that's the problem, seeing as it has socialism RIGHT IN THE NAME!

Adolf Hitler, once a day labourer outside the Hotel Imperial Vienna, returned as the Führer and "delivered a speech to a rapturous crowd from [the hotel] suite's balcony, on 14 March 1938", according to

We suppose it's worth noting that the Imperial is decidedly not owned or operated by the Austrian government, where a far-Right coalition has recently imploded -- although maybe Luntz is confused about that, since official state guests are traditionally housed there. In any case, the elevator's busted, it's in Europe, Europe is socialist, and Frank Luntz is homesick for America, where no elevator ever goes unrepaired for an entire weekend. It simply has never happened because of our efficient free market!

Still, Luntz's tweet inspired some valuable reflections on how economic theory shapes the reality of everyday life. This is the kind of Austrian economics we can support.

In conclusion, capitalism always allocates resources efficiently and fairly, although that still doesn't explain why Frank Luntz has a job. And now it would be your DOKTOR ZOOM'S BIRTHDAY PARTY OPEN THREAD, if only the socialists would fix the elevator, the end.

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