A bank crashes. A train derails. And you wonder why we need government regulation? | Ray Landis
It has been almost 40 years since Ronald Reagan turned the phrase “The nine most terrifying words in the English language are ‘I’m from the government and I’m here to help’” into a mantra for Republican politicians.
Two recent events – the failure of Silicon Valley and Republic Banks, and the Norfolk Southern train derailment – show the hypocrisy and shallowness of this attitude. They are also examples of how the regressive message of the acolytes of smaller government endangers Americans at the same time it pours more money into the pockets of the wealthy.
The United States has experience with bank failures. The depression of the early 1930s saw thousands of banks collapse, wiping out the savings of their depositors. It led to the creation of the Federal Deposit Insurance Corporation (FDIC), a government agency funded by insurance premiums paid by banks which protects $250,000 of each depositor’s funds in case of a bank failure.
You might expect those with deposits exceeding the $250,000 threshold in these failed banks who adhere to Reagan’s philosophy to grudgingly accept their losses. You would be incorrect in this assumption, however. Wealthy depositors with more than $250,000 in these banks pleaded with the government to intervene and ensure they would recover all their money – an effort that proved successful.
Some Republicans don’t want this to become a habit, however. The “Freedom Caucus” issued a statement opposing a permanent increase in the deposit guarantee amount, falsely blaming regulators and “unnecessary, burdensome regulations” for the situation. Their view appears to be these regulations and FDIC insurance premiums threaten banks, not the bank’s own risky financial decisions.
Regulations are also at the heart of the other event, the derailment of a Norfolk Southern freight train carrying toxic chemicals in East Palestine, Ohio. The subsequent fire and release of hazardous materials into the air and water caused health and environmental concerns in the area and led to temporary evacuations of area residents.
Here’s how Silicon Valley Bank’s collapse differs from our last financial crisis
Government officials sent to the derailment site to assess the hazards were met with skepticism and outright hostility from the residents of the small, rural town. After years of being indoctrinated by the likes of regressive politicians and Fox News to not trust the federal government, there is little wonder many people refused to believe officials had their best interests at heart.
It turned out those who felt it was the government’s fault their lives had been disrupted had a point – but it wasn’t quite the point they imagined.
In 2018, the Trump administration, at the request of the railroad industry, rolled back safety regulations regarding brake systems on trains. While the train which crashed in East Palestine may not have been required to have the enhanced brake system required by the rescinded regulations, this lax regulatory environment contributed to the likelihood of a crash occurring.
The narrative of United States economic history since the Civil War is cycles of greed and corruption resulting in economic turmoil followed by attempts by more progressive governments to clean up the mess. Much of societal repair has taken the form of government regulations to attempt to curb the unruly behavior of the wealthy.
After the experience of the Trump years, we are in the midst of a cleansing. But the forces of greed and corruption aren’t going down without a fight in this cycle and they have more tools at their disposal than in the past.
Between a corrupt campaign finance system, a propaganda network highlighting and exaggerating Americans’ mistrust of “others”, and a wealth gap growing greater with each passing day, regressive forces continue their push for laws and actions which benefit the powerful at the expense of the vast majority of citizens.
Priorities for rail safety bill debated in U.S. Senate hearing with Norfolk Southern CEO
They twist the narrative of bank failures to blame “woke” political views and tell residents of East Palestine the federal government isn’t responding to the hazardous situation quickly enough because they voted for Trump. Meanwhile, they work behind the scenes to thwart attempts to strengthen government regulations in response to these situations.
The federal government has been called on to assist in circumstances beyond bank failures and train crashes in the past year. Tornadoes in the Deep South, flooding in Central California, hurricanes in Florida, large numbers of migrants coming to the Texas border as they flee oppression in other countries – these areas, all governed locally by Republicans, have asked for intervention and resources. And the federal government has been there to help.
So how do those who ascribe to Reagan’s philosophy reconcile their views with their requests for assistance? The contradiction never crosses their minds. Because when you have abandoned any sense of shame or remorse in the quest for power and wealth, saying one thing and doing another is an everyday occurrence.
Welcome to 21st Century American politics.
Originally published at www.penncapital-star.com,by Ray Landis
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