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BANKING – A GAME WHERE PLAYERS MAKE THE RULES (PART IV)

January 30, 2014

BANKING – A GAME WHERE PLAYERS MAKE THE RULES (PART IV)

It is far past time that the banks quit socializing their risk while privatizing their gain, with the rest of us role-playing as their patsies. So far, and unlike in criminal law or law involving civil damages, the bankers make their own rules. Why do we allow this? What is in it for us? It’s our market; we should make the rules and they should follow them if they wish to participate.

Why should you and I be liable for their failure(s), or better said, why should you and I be subject to laws and rules which codify that arrangement? Wouldn’t we object if we were required to pay part of the drunk driver’s fine and liability in civil damages as set out in Part I? I would. What’s the difference between that and our bailout of these Wall Street banks, or even sharing the meager fines they pay by sharing the income tax liability they dodge via their deduction of such fines (presumably under the “necessary and usual” business expenses section of the internal revenue code)? (If fines paid for fraud and other business misconduct are defined as “necessary and usual,” then we have another problem to be corrected, i.e., an amendment stating that fraud and other such business misconduct is not deductible under that or any other section of the internal revenue code.) Where does chicanery end?

It is time to recodify both the law and the rules adopted under the law to end this ridiculous and continuing travesty. You and I are required to bail the big banks out for their violation of the rules and then help them pay their fines? What? When was the last time a big bank offered to pay for part of your income tax liability? Insanity!

Athletes must pay for their misdeeds and are not allowed to keep their ill-gotten gains; drunk drivers must pay for ALL DAMAGES proximately flowing from their misdeeds and cannot negotiate fines for jail time; so why should banks be exempted? Are banks not capable of criminal acts? Look at the business pages of your newspaper. Almost daily there is some new outrage perpetrated by big banks, from laundering Mexican drug money to illegally dealing in financial matters with Iran. We should subsidize such conduct? These banks (as we used to say) need a “knot jerked in their tails.” Now. Let’s do it!

Let’s pass reenactment of Glass-Steagall ( a number one priority) and the “no peanuts” bill. Will that be enough? No, but it’s a start. It’s time for an end to the tail wagging the dog and time for the dog to wag his own tail. We’re the dog. Let’s call our senators and representatives and tell them to reinstate Glass-Steagall and vote to bring the “settlements accountability” bill up for hearing and vote. It could well be the most profitable phone call most of us will ever make, in addition to slowing if not ending the present charade of lopsided treatment.

Finally, these people who call themselves bankers do not own this marketplace; we do. They are mere participants. We need some new rules that address the financial wants and needs of the people rather than a lobbying game that adds to the banksters’ bottom lines. We have a lot of work to do. Let’s get on with it.  GERALD  E

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