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BIG BANKS AND AMERICA – WHO’S IN CHARGE?

March 28, 2014

BIG BANKS AND AMERICA – WHO’S IN CHARGE?
The answer to the question posed in the above title depends upon the criteria employed, and those of my followers who are discerning will note that I have left “no one” off the list. Some think that with the current legislative brawls we have no one is in charge and that we are not governable; that social cohesion in our country is at risk and that doing nothing and resisting all initiatives are leading to deadlock in government and that no one can consequently predict where we are headed with no hand on the tiller of state. Such a description is suggestive of the problems experienced by the French and Russians shortly before their respective revolutions. I do not agree with such a dour assessment of our future, at least not yet, but it does represent one possible outcome of our reckless political conduct of late. A Supreme Court holding long ago held that “free speech” did not include the right to yell fire! in a crowded theater. Our theater is becoming crowded, and there are those who are yelling fire! under the auspices of free speech, raising the issue of when reckless speech loses First Amendment protection.
Courts are generally reluctant to set limits to speech and that is good. If we are to have a free and full debate of the issues, as we should in a democracy, then the politicians should have a lot of room to explore and expand the virtues of their positions and the shortcomings of their opponents’ positions. People in a democracy should be made aware of candidates’ stands on the issues so that they can intelligently vote their choices in elections. Without a vigorous and robust exercise of free speech the citizens are deprived of the information they need to make intelligent choices at the polls, so rules of defamation and preposterous claims are relaxed in the name of free speech and debate of the issues.
One of the criteria we use to determine who is in charge of America these days is money, and by that criterion Wall Street banks and the corporate culture are clearly in charge. Let’s look at a brief history of how this happened. Freed of the constraints of the 1933 Glass-Steagall Act which prevented a mix of commercial and investment banking, Wall Street bankers went on a speculative binge on an international level selling securities based on inadequate collateral. Their ventures collapsed and we taxpayers bailed them out. They sucked more than 700 billion dollars out of our treasury and 16 trillion dollars from the Federal Reserve. All but one of the 6 big Wall Street banks at the time were insolvent, as admitted by then Fed Reserve Chair Bernanke, but were extended a total of more than 16 trillion dollars to insure their survival since they were “too big to fail.”
These banks not only did not fail but as thus assisted are bigger now than ever and have roared back to healthier levels than they enjoyed before the 2008 crisis. The six big Wall Street banks now have over 9 trillion dollars in assets, the equivalent of 58% of GDP of the entire United States, and have half of the mortgages and 2/3s of the credit card business in the country in a dangerous demonstration of economic power recognized by Mr. Justice Brandeis with his oft-quoted statement that “You can have wealth concentrated in the hands of the few or you can have democracy, but you cannot have both.”
Like John D. Rockefeller’s Standard Oil trust that was broken up in 1911 by the Supreme Court, it is time to break up this dangerous concentration of wealth among Wall Street banks. We know that much of their profits come through speculation (in which we continue to be liable for their bailouts), (admitted) mortgage fraud and (admitted) bribes paid Chinese officials. Are these the people we want to have in charge of America? Count me out. I’ll take democracy – the country’s most precious asset. GERALD E

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One Comment
  1. Amen and amen Gerald. I am often puzzled by what appears to be sheer oblivious nature of the public to what has and is occurring at the Wall Street and Government level (I don’t see any real disconnection between Wall Street and k street and Pennsylvania Avenue. They appear to work out of the very same office with the same personnel). I know historically money has always been front and center in D.C. We know (or think we know, speculation?) Lincoln paid off a congressmen or two to pass the 13th amendment. Ok, I get that. But it seems clear and obvious (not rocket science if I can see and identify it) how money and those who are in control of it (from print to “investment”) are literally calling the shots politically, economically and socially. I really do believe that, operationally speaking, our government has become the office and home of the oligarch. It is what it is. Facts speak for themselves. Heck, they don’t even try to hide the fact that they operate this way (quite the reversal of the charges against Nixon back in the day!). It is stunning and, in a way, remarkable, that they have become so good at what they have done over the last 30 or 35 years to get government “out of the way” of capitalism! Of course, it’s not that they don’t believe in big government, but that the government work for THEM and, literally, their economic interest. The whole big versus small government is a straw man for anyone paying attention to how the engine is operating. And right now, the oligarchs are hitting on all cylinders! Again, as much remarkable a transformation as it is obscene and immoral. But hey, as Mel Brooks wrote in one of many genius skits, “It’s good to be the King!” Had a evangelists tell me this morning that the rich are as miserable as the poor (referring to Lazarus at the gate of the rich man in Luke 16). I told him, I hope with a straight face, that all things being fair, I’d rather be rich and miserable than poor and miserable. I really get sick of some who say they know Jesus twist his condemnations of hoarded wealth into spiritual platitudes! Makes my brain explode! I wonder if we’re reading from the same book! Oh well, blessings and looking forward to seeing your essays in book form SOON!!! – Brad

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