My Letter to the New Hampshire Democrats Who Supported Deregulation

I do not expect an on-point response, though should I get one I will share it with you.

If you are reading this blog you must have some degree of political awareness and, I hope, some degree of political engagement with your legislators. In this day and age of web pages it is especially easy to write a single letter and cut-and-paste it into the legislator’s “contact me” section.

I just finished reading a Newsweek article by Darragh Roche reporting on progressive legislator Ro Khanna’s disappointment in the support several Democrats offered for the 2018 bill that called for a rollback on the regulations put in place after the 2008 banking crisis. I was stunned to read that the three Democrats who represent me in Washington voted to loosen the regulations. Here’s the letter I plan to send them:

Dear Senator Hassan, Senator Shaheen, and Representative Kuster:

I was astonished to read in a Newsweek article that you were among 17 Democratic Party Senators who voted in support of S. 2155, which axed regulatory requirements for regional banks with less than $250 billion in assets. As I am sure you have read, many of your colleagues and many respected economists believe that the passage of this bill and the subsequent deregulation contributed to the collapse of the Silicon Valley Bank and concerns throughout the banking industry, especially for banks like those found in our State. In his column today, NYTimes columnist Paul Krugman, after explaining how deregulation rewards banks for risky loans and make taxpayers foot the bill when they fail, wrote:

“The lesson I would take from S.V.B. is that banks need to be strongly regulated whether or not their deposits are insured. The bailout won’t change that fact, and following that wisdom should prevent more bailouts.

And you know who would have agreed? Adam Smith, who in “The Wealth of Nations” called for bank regulation, which he compared to the requirement that urban buildings have walls that limit the spread of fire. Wouldn’t we all, even the ultrarich and large companies, be happier if we didn’t have to worry about our banks going down in flames?”

In 2018 I assumed that New Hampshire’s delegation would support fiscal prudence and vote against deregulation. I am confident that someone in the House or Senate will introduce a bill that tightens the regulations and hopefully funds monitors to oversee those regulations. When that bill is introduced I will be back in touch again to encourage its passage. I know that the banking industry will bridle at the regulations but hope that you will keep Adam Smith’s metaphor of preventing a spreading fire in mind when you vote.

I’ve written several letters of late and been disappointed in the responses I receive, which tend to be generic responses based on the broad topic I am asked to select from on a pull down menu. I will keep you posted on responses I receive, regulatory legislation that is introduced, and how that bill might pass. In the meantime, I am cheering on Elizabeth Warren’s efforts to claw back the bonuses the S.V.B. executives took on the eve of the bank’s collapse.