Among the Obama-era protections that the Trump administration and Republican-led Congress are working over with an eye towards dismantling is the Dodd-Frank Act.
This law was put in place after the 2007-2008 financial meltdown in order to address the sort of problems that led to the crisis. The Dodd-Frank Act provided for greater oversight of “too big to fail” banks that engaged in risky business practices that endangered the economy. It enabled the government to step in and wind down large, failing banks in an orderly way so as not to create or worsen a spreading financial panic. Another important part of the Dodd-Frank Act was the creation of the Consumer Financial Protection Bureau, which looked out for the interests of American families by regulating scammy and deceptive lending practices like payday loans.
House Republicans are taking aim at these important provisions by introducing the “Financial Choice Act,” which would repeal the Dodd-Frank Act. Just like so many warm and fuzzy names for initiatives that are anything but, the Choice Act is a giveaway to Big Finance. Here, “CHOICE” is an acronym for “Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs.” The “hopey changey stuff” held out by the GOP in the Choice Act is the opportunity to get burned again. It helps the big banks escape regulation and re-opens the door to the same shady practices (like shadow banking and risky derivatives) that caused the Great Recession, and which the Dodd-Frank Act cleaned up.
It’s sort of like removing the guard rails from freeways in order to increase the freedom of drivers to choose to careen over the edge and roll down the mountain. Are you looking for more opportunities to crash and burn, to lose your job and house, to pay predatory lenders exorbitant interest rates? That’s what passes for “freedom” and “choice” in Trump’s America. It’s rather telling that the basis of Trump’s condemnation of the Dodd-Frank Act is that it made it harder for his friends to get loans. The Choice Act passed out of committee and into the full House on a party-line vote (and you can probably guess which party gave it the thumbs-up).
While Congress and the President may have a kind of collective amnesia regarding the painful effects of the Great Recession on American families, the rest of us sure don’t. There’s one effect of the financial meltdown, however, that may have escaped widespread notice, and which helped almost every living creature on the planet.
The economic downturn of 2007-2008 caused people to spend less money and buy fewer things out of fear, desperation, and unemployment. No matter the reason, though, hitting the economy on the head with a brick reduced carbon emissions in the United States by 11% between 2007 and 2013. While 17% of the reduction between 2007-2009 can be attributed to the widespread switch from burning coal to natural gas and renewables for electricity, the rest came from a decline in the collective ability of Americans to buy and consume goods and services. Every American that had to put off having or increasing a family because they couldn’t afford a child is one more way the riskiness of Wall Street, filtered through the suffering of middle class and poor Americans, bought everyone a little more time with a stable and livable climate.
Carbon emissions climb when the economy grows. Depressions, downturns, and collapses (like the fall of the Soviet Union in 1991) cause a measurable dip in emissions worldwide. Perhaps the best way to encourage Republicans to ditch the “Wrong Choice Act” and make a few helpful tweaks in the Dodd-Frank Act instead is to remind them that their actions in pursuit of beggaring the country would benefit the environment. If they are forced to choose between two ideologically intolerable options, saving the planet or restraining Wall Street to protect American families, perhaps the pause (for most but not all of them) to sort out the cognitive dissonance as their heads explode will bring back a bit of that legislative paralysis we didn’t realize we missed.