Joe Biden's troublesome past

[Legion]

In early 1973, as Joe Biden was settling into his new job in Washington, DC, Ralph Nader published a deconstruction of what made the freshman DEMOCRAT senator’s state of Delaware, the most anodyne of states, so exceptional.

The answer, The Company State explained, had to do with the unique relationship between government and commerce: Delaware was less a democracy than a fiefdom, contorting its laws to meet the demands of its corporate lords.

Preeminent among them was the chemical giant DuPont.

Nader took readers to Rodney Square, in the heart of Wilmington.

There was the ritzy Hotel du Pont, housed in a building owned by DuPont, next to a theater built by DuPont, connected to a bank controlled by the du Pont family, surrounded by law offices and brokerages—all affiliated in some way with what was known simply as “The Company.”

The du Ponts owned the state’s two largest newspapers and employed a tenth of the state legislature.

The governor was a former executive.

The state’s member of Congress for most of the 1970s was Pierre Samuel du Pont IV.

“General Motors could buy Delaware,” Nader quipped, “if DuPont were willing to sell it.”

Over the next two decades, as Joe Biden rose through the ranks of the DEMOCRAT Party, the state’s center of gravity began to shift from the world of chemicals to the big business of other people’s business—banking, accounting, law, and telemarketing.

But if the industry had changed, the ethos remained: Delaware was the Company State. It owed its prosperity to its willingness to give corporations what they wanted.

Though he’s now a millionaire, Biden has long positioned himself as the champion of the middle class, a scrappy kid from Scranton who’s fought the good fight for decades.

His adopted home state is part of that identity too—an unglamorous enclave of scrapple and toll roads, the Acela Corridor’s own Flyover Country.

But as he pursues his third and likely final quest for the presidency, his record haunts him, because the interests of Delaware are often at extreme odds with everyone else’s.

Biden did not create this system, but he used his influence to strengthen and protect it.

He cast key votes that deregulated the banking industry, made it harder for individuals to escape their credit card debts and student loans, and protected his state’s status as a corporate bankruptcy hub.

Biden’s career in the Senate placed him on the wrong side of some of the biggest financial fights of his generation and brought him into conflict with some of the same rivals he faces today.


https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[AProudLefty]

Another one?

[Legion]

Delaware is emblematic of the kind of gauzy comity that Biden has sometimes gotten in trouble for waxing nostalgic about.

Elected officials from prided themselves on what they called “the Delaware Way”—a willingness to put aside consumer protectionism for the good of the state, which invariably meant aiding its business climate.

Revenue from corporate taxes and LLCs kept government coffers full, and the state’s low income tax rates kept voters happy.

For decades, much of the front-line work of championing the state’s financial industry in Washington was handled by Biden.




https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[PostmodernProphet]

I hear that he has a credit card bills coming due in November........Americans have a right to know how much he owes and who he owes it to......

[Legion]

In 1998, an executive at First USA, a credit card company based in Wilmington, wrote to Biden, asking him to intervene on a proposed rule that would shorten the window in which credit card companies could collect debts from debtors.

A few days later, Biden and a Delaware representative did just that.

“Reducing the collections period for credit card debt by one-sixth would have a direct effect on Delaware banks,” the lawmakers wrote to federal regulators. “Many Delaware bankers are concerned that such a change would unfairly result in substantial losses to their institutions.”

Throughout the 1980s and ’90s, as Biden settled into a comfortable incumbency, banks sought to make the rest of the country work more like their mid-Atlantic refuge—to embrace the least possible amount of regulation so they could grow as big as they wanted.

Delaware, for instance, had a loophole allowing banks to sell insurance.

Now the banks wanted to do that everywhere.

Delaware’s laws made it easy for credit card companies to do business in any states they pleased.

Financial firms wanted regular deposit banks to have that ability too.

Biden supported a baby-step deregulatory effort in the early 1980s, and then, in 1994, he backed a very big one: the Riegle-Neal Interstate Banking and Branching Efficiency Act, which eliminated the remaining barriers to where banks could operate.

The law passed. But it opened the floodgates to an era of corporate consolidation.

Delaware’s financial institutions got another big boost in 1999, when Biden voted for the Financial Services Modernization Act, which repealed the Depression-era Glass-Steagall law barring banks from owning securities and insurance businesses.

By 2016, there were almost 5,000 fewer banks in the United States than there were two decades earlier, and the 10 largest firms controlled half of all banking assets.


https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[Legion]

I hear that he has a credit card bills coming due in November........Americans have a right to know how much he owes and who he owes it to......

Or who pays it for him?

[signalmankenneth]

In early 1973, as Joe Biden was settling into his new job in Washington, DC, Ralph Nader published a deconstruction of what made the freshman DEMOCRAT senator’s state of Delaware, the most anodyne of states, so exceptional.

The answer, The Company State explained, had to do with the unique relationship between government and commerce: Delaware was less a democracy than a fiefdom, contorting its laws to meet the demands of its corporate lords.

Preeminent among them was the chemical giant DuPont.

Nader took readers to Rodney Square, in the heart of Wilmington.

There was the ritzy Hotel du Pont, housed in a building owned by DuPont, next to a theater built by DuPont, connected to a bank controlled by the du Pont family, surrounded by law offices and brokerages—all affiliated in some way with what was known simply as “The Company.”

The du Ponts owned the state’s two largest newspapers and employed a tenth of the state legislature.

The governor was a former executive.

The state’s member of Congress for most of the 1970s was Pierre Samuel du Pont IV.

“General Motors could buy Delaware,” Nader quipped, “if DuPont were willing to sell it.”

Over the next two decades, as Joe Biden rose through the ranks of the DEMOCRAT Party, the state’s center of gravity began to shift from the world of chemicals to the big business of other people’s business—banking, accounting, law, and telemarketing.

But if the industry had changed, the ethos remained: Delaware was the Company State. It owed its prosperity to its willingness to give corporations what they wanted.

Though he’s now a millionaire, Biden has long positioned himself as the champion of the middle class, a scrappy kid from Scranton who’s fought the good fight for decades.

His adopted home state is part of that identity too—an unglamorous enclave of scrapple and toll roads, the Acela Corridor’s own Flyover Country.

But as he pursues his third and likely final quest for the presidency, his record haunts him, because the interests of Delaware are often at extreme odds with everyone else’s.

Biden did not create this system, but he used his influence to strengthen and protect it.

He cast key votes that deregulated the banking industry, made it harder for individuals to escape their credit card debts and student loans, and protected his state’s status as a corporate bankruptcy hub.

Biden’s career in the Senate placed him on the wrong side of some of the biggest financial fights of his generation and brought him into conflict with some of the same rivals he faces today.


https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[Legion]

Late in Biden’s 1996 reelection campaign, a consultant working for his Republican opponent pushed a troubling story: The senator had sold his home to an executive from the credit card company MBNA for double its appraised value.

MBNA called the story “viciously false”.

Not long after that, the company hired Biden’s youngest son, Hunter, and the criticism stuck: Biden became “the senator from MBNA.” (Hunter’s corporate affiliations have once again become an issue for Biden).

MBNA, the largest independent credit card company headquartered in Delaware, hardly drew notice at first.

In 1982, five employees from a company called Maryland Bank set up shop in an old supermarket a few miles from the state line.

They hit upon the idea of pitching credit cards to targeted groups—like sports fans or college students—and did a quarter of a billion dollars of business in just over a year.

By 1997, MBNA was mailing 30 million credit card solicitations a month and making 6 million over the phone.

Getting people into debt was how the company profited, and it was self-perpetuating.

If a debtor missed a car payment to pay a credit card on time, MBNA would raise the person’s interest rate anyway, a practice known as universal default—thereby increasing the likelihood the person would miss future payments.

MBNA employed about a third of the state’s finance workers. The company stockpiled vintage cars (a Duesenberg was parked in its lobby) and began buying up old DuPont properties—office buildings and golf courses.

MBNA brought the same largesse to politics. It shelled out nearly $1 million in donations to federal candidates in 1994.

Biden was an exception. He brought in more than $200,000 from MBNA employees over the course of his career.

And he developed a relationship with the company’s CEO, Charles Cawley. When Biden held a Wilmington fundraiser for his 1996 campaign, Cawley was there. When Cawley received an award for his charitable giving, Biden appeared onstage with him. A couple years later, Cawley co-chaired an award ceremony for Biden. On the company’s dime, Biden and his wife, Jill, flew to Maine, where the senator spoke at MBNA’S 1997 corporate retreat.



https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[PostmodernProphet]

I always wondered who Politifact was.......now that we know its singlemankenny we can completely ignore it....

[Legion]

MBNA lobbied for the repeal of Glass-*Steagall, and because MBNA’S business model was based on delinquent customers, it lobbied to block reforms meant to help cash-strapped consumers, such as crediting bill payments to the day they are mailed rather than the day they are received.

But what it was really after was bankruptcy reform.

Between 1980 and 1997, the number of Americans filing for personal bankruptcy jumped more than 300 percent, affecting 1.3 million households annually.

A growing number of researchers, led by a Harvard Law School professor named Elizabeth Warren, believed the fault lay with the accumulating credit card fees, hospital bills, student loans, and mortgages that were placing the squeeze on middle-class families. Their research found that, for debtors, personal bankruptcy was not an escape hatch; it was a lifeline.

A congressional effort to curb bankruptcies might have started with looking at how people were getting into debt.

Instead, Congress tackled the problem from the perspective of the creditors, who argued that stricter rules were necessary to forestall abuses of the system and prevent billions of dollars in losses from trickling down to consumers.

In 1997, a group of House lawmakers began crafting a bill that would make it harder for individuals to file for bankruptcy by subjecting filers to a means test and giving creditors more opportunities to collect.

The credit card companies loved it. After all, they wrote large chunks of the legislation.

Biden supported an altered version introduced in the next Congress. Bankruptcy reform would go through the judiciary committee that Biden sat on and had once chaired, and he was the “linchpin” of the effort to pass it.

Credit card companies wanted to limit the options of people filing for personal bankruptcy, but that was only one part of the equation.

Delaware also had a lot riding on helping corporations file for bankruptcy.

For a variety of reasons, including its high concentration of white-collar lawyers and the pro-business reputation of its courts, the state was the venue for a large percentage of the nation’s Chapter 11 cases. It had even come up with a special fast-tracked bankruptcy process.

Filing in Delaware allowed companies that were functionally based elsewhere to “escape the obligation to make the process open,” as Warren put it.

Bankruptcy cases made huge gobs of money for Delaware’s legal industry. When reformers introduced language that would force companies to file for bankruptcy in the states where they were actually based—a clause dubbed “the Delaware killer”—Biden used his leverage to defeat it.

Ultimately, Biden ended up securing funding for four more bankruptcy judges in Delaware.



https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[Legion]

Joe Biden was the key to helping big banks, credit card companies, and Wall Street screw average Americans.

Over time, Biden’s exertions on the bankruptcy bill began to shape his national reputation.

“His energetic work on behalf of the credit card companies has earned him the affection of the banking industry and protected him from any well-funded challengers for his Senate seat,” Elizabeth Warren wrote in the Harvard Women’s Law Journal. “This important part of Senator Biden’s legislative work also appears to be missing from his Web site and publicity releases.”

Warren’s criticism of Biden came to a head at a Capitol Hill hearing in 2005, when they sparred over the bankruptcy bill for 15 minutes.

Biden appeared exasperated with the expert witness sitting across from him.

He found it “outrageous” that she would question the openness of Delaware’s bankruptcy court to small creditors, and he insisted that Warren was aiming at the wrong target.

Her focus should be on big structural issues like health care and lending practices, he insisted, rather than the particulars of the bill he was pushing:

Biden: Maybe we should talk about usury rates, then. Maybe that is what we should be talking about, not bankruptcy.

Warren: Senator, I will be the first. Invite me.

Biden: I know you will, but let’s call a spade a spade. Your problem with credit card companies is usury rates, from your position. It is not about the bankruptcy bill.

Warren: But, Senator, if you are not going to fix that problem, you can’t take away the last shred of protection from these families.

Biden: I got it, okay. You are very good, professor.

Biden takes criticism of his bankruptcy position personally, in part because it infringes so directly on his well-cultivated political identity—a middle-class warrior and longtime critic of corporate campaign contributions.

In a floor speech just before the bankruptcy bill’s passage, he accused its opponents of “fabricating wild claims”.

“Biden has championed the middle class for his entire career and has a proven track record of delivering on his progressive values,” his spokesperson Michael Gwin said.

When the New York Times Magazine asked Biden about bankruptcy reform in July, he was defiant.

Contributions from banks didn’t matter to him, he said.

Plenty of people in Washington, including then-Sen. Barack Obama, opposed it. Biden’s support was instrumental, and he was deeply invested in its success.

A 2008 study published in the American Bankruptcy Law Journal found that “credit card companies saved billions because of reduced loan loss rates,” but that none of those savings benefited consumers. Because interest rates and late fees continued to tick upward, “the cost to credit card customers increased 5% to 17%.”

And even before the recession hit, Credit Suisse found that the bankruptcy law had “a profound impact on subprime borrowers” and made it more likely that borrowers would fail on their bankruptcy payment plans.

Before that law was passed you could file a chapter 7 bankruptcy for seven, eight, or nine-hundred dollars, including attorney’s fees and filing fees, and that’s gone up to more like $2,000.

It’s made bankruptcy much more expensive, difficult, burdensome, and less effective.”


https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/
 

[AProudLefty]

I always wondered who Politifact was.......now that we know its singlemankenny we can completely ignore it....

Genetic fallacy.

[Legion]

 
Biden’s banking votes have stuck with him because their effects have stuck with us.

You could draw a reasonably straight line from the bank deregulation votes of the ’90s to “too big to fail,” the housing crisis, and the Great Recession.

And plenty of people do.

Biden now finds himself locked in a tough presidential race with Donald Trump, who forged his political identity by clashing with the kinds of megabanks Biden had a hand in creating.


https://www.motherjones.com/politics/2019/11/biden-bankruptcy-president/

[PostmodernProphet]

Genetic fallacy.

you are a genetic phallusie....

[Legion]

you are a genetic phallusie....