Who’s Banking on Castle?
Aug 17th, 2010 by FVoshell
Rick Moran of The American Spectator writes that Democrats have been talking about a lame duck session after the midterm elections. Rumor has it one of the items on the uncompleted agenda of the 111th congress is a race to pass cap-and-trade legislation.
One of the key players in such a scenario would be the newly elected senator from Delaware, who could be seated immediately and thus have the ability to vote on bills during the lame duck session. Of the three candidates presently in contention for Delaware’s senate seat, Mike Castle presently is running ahead in most polls.
If cap-and-trade comes up and Mike Castle has won Delaware’s senate seat, it’s pretty clear how he would vote, because when cap-and-trade came up in the House in 2009, Castle voted for it.
Moran asks: “Why?”
His conclusion is that Castle is looking out for banking interests even more than Green interests, as cap-and-trade law would place limits on carbon emissions and banks would have a great deal to gain by passage of such a law.
Why and how?
Moran quotes Tom Borelli, who says the law would lead to “the creation of the largest commodity market in the world.” Borelli estimates a $2-trillion futures market would be created, a market which he says would be larger than the futures market for oil and gas.
In brief, an entire new trading market would be created out of thin air—some would say hot air.
So why would Mike Castle be on board with such a scheme? Moran writes “Wall Street firms would stand to profit off of each transaction made on such an exchange. So the immediate benefits of cap-and-trade for the banking industry would certainly outweigh any long-term concerns it may present the industry for the overall economy.”
Noting that Delaware is both corporate capital of the nation and banking industries, Moran also notes Castle’s main campaign contributors have included members of the banking industry , three of which are MBNA Corp, Bank of America and Morgan Stanley; and “10 of his top 20 contributors were banking firms.
Moran leaves the reader to conclude why the election of Mike Castle to the Senate might be dangerous when it comes to his vote on cap-and-trade.
Economists note the gains to be made immediately are in the lucrative but creaky futures market. As many have noted with alarm, the explosion of derivative financial instruments, now accounting for some 1.4 quadrillion of notional paper, are already one of the chief reasons our national and global economies are in deep trouble.
Even Warren Buffett has described derivatives as ‘financial weapons of mass destruction,” and for very good reasons. As Jeff Nielson—among many others have pointed out, Wall Street banks have “assigned their own ‘fantasy’ evaluations to the debts/assets on their books, instead of the actual market value of those assets.”
What better way to get some of those billions or even trillions of dollars of “toxic assets” off the books and maybe even create profits than through an even more outrageous derivatives scheme calculated to make money—literally—out of speculative futures trading in hot air?
Though Castle voted for the latest financial reform bill, it hasn’t escaped notice that the attempts to deal with the totally unregulated and out of control derivatives market were completely gutted. Derivatives continue to be one of the hottest financial acts in town.
Further, Castle’s vote for TARP was, according to many economists who discerned the economic rationale behind all the political hype and maneuvering, a vote for bailing out banking and other financial institutions who had bet in the derivative markets and lost.
Essentially, Castle, among others, voted for TARP to rescue distressed—and utterly feckless—banking and financial interests. A vote for TARP, including Castle’s critical vote, was essentially a vote for the Federal Reserve to supply an infinite amount of money to bail out Wall Street, thus encouraging furthering gambling with derivatives while devaluing the dollar to boot.
As Daniel Amerman explains in a 2008 article concerning the government takeover of Fannie Mae and Freddie Mac, the massive bailout actually was the bailout of the financial derivatives industry. “When the situation started to get bad, the federal government stepped in and…effectively guaranteed the debt of Fannie Mae and Freddie Mac. Which means they also—and this is critical—bailed out the firms who had guaranteed the 1.4 trillion in credit derivatives….In other words, the biggest beneficiaries of the 1.4 trillion Fannie and Freddie bailout were not Fannie or Freddie at all, but the Wall Street firms whose senior officers just happen to be major political contributors to both political parties—with some of those senior officers also running the Treasury Department on a revolving door basis.”
In other words, does Castle’s record show he has supported Wall Street’s insanely reckless gambling streak in derivatives and will continue to do so with his support of cap-and-trade?
If the shoe fits…
–I am indebted to the following authors: Daniel Amerman, Paul Farrell, Michael Snyder, Ellen Brown, Linda Davies, Lorimer Wilson and Jeff Poor.
Castle is on record as opposing a lame duck session and would vote against holding one, along with Mark Kirk should he win. Both would be seated immediately.
Even if there is a lame duck session and Cap & Trade were voted on, Castle does not represent a net increase in support as he would be replacing Ted Kaufman in the Senate.
Castle is on the record as opposing any lame duck session of Congress this year. In replacing Kaufman (immediately after the election), he becomes another vote for a filibuster against any controversial legislation until the next session of Congress.
I know that none of this will satisfy the conspiracy theorists out there, but it is a fact.
I guess we are also ignoring the fact Castle has disavowed and apologized for his previous vote on cap-and-trade….
“I know that none of this will satisfy the conspiracy theorists out there, but it is a fact.”
The O’Donellistas refuse to be confused by the facts. The Possums did it!!!
Nice article Flo.
I don’t trust Castle.
Call me names. Call me stupid.
But I don’t trust him.
Yeah, I’ll say it.
I think if Castle gets to the Senate he will finally be unshackled and we will a more liberal voting record, no thanks.
Faye, very well written. Of course the “party blind eyes” will just turn it towards Castle’s history. I think they really believe it when they say that ,”Castle has promised to not vote for cap and trade in the Senate” . But has he said he will not vote for “ANY CARBON TAX LEGISLATION”?
If people would take the time to match up Mr. Castle’s voting , with his FEC report, they would be shocked. But first they must be willing to look with their eyes open.
Thank you, Frank. (And Pat.)
I would not have come to my conclusions about Castle (reluctantly, I might add) if I were not convinced he was complicitous in aiding and abetting through his votes the house of cards that presently is our financial institutions.
Promises such as saying he won’t vote for cap-and-trade mean nothing in light of his record–do we really believe yet another “trust me” plea?–and his pledge not to agree to a “Lame Duck” session is also meaningless, as the power to call the session is out of his hands.
I believe I’ve presented a well reasoned case as to why conservatives should not support his bid for the senate seat.
If your starting point is: Mike Castle is a liar, then it’s clear you will never be persuadable. Nothing he could say or do would bring you over to his side, because you assume it is a lie or some devious plot. Fine, but realize you have also given up the ability to persuade fellow voters. You are just as deep in the tank against Castle, as the establishment is for him. you don’t come across as reasonable, and truly undecided voters dont trust anyone on either extreme of candidate advocacy.
I guess we are also ignoring the fact Castle has disavowed and apologized for his previous vote on cap-and-trade..
Of course we are- he’s a politician, isn’t he?
[...] now, we have the rough outlines of “Mike Castle is a money grubbing ethics challenged scum-bag” theme trotted out here – and picked up for a slightly large audience [...]