Have no fear. While millions of Americans are struggling to survive day to day, and the economy is in the tank, the millionaire banksters on Wall Street are doing just fine.
Just ask Jamie Dimon, CEO of JPMorgan-Chase. At JPMorgan’s investor conference yesterday, Dimon bragged to a crowd of uber-wealthy investors that, “[W]e actually benefit from downturns.”
In other words, they’ve so rigged the system that when millions of Americans are without jobs, and struggling to put food on the table and provide for their families, Dimon and his Wall Street fat cat buddies are doing better than ever, making a profit off of your misery.
But such an appalling statement really shouldn’t come as a shock. After all, numerous reports have suggested that JPMorgan-Chase and other big banks engaged in criminal and/or unethical activity, and it’s possible that Dimon did too.
It’s inexcusable that these banks continue to rake in millions, after destroying our economy and devastating the middle-class. One way or another, the rampant corruption on Wall Street needs to stop.
That’s where Sen. Elizabeth Warren comes in.
Since Warren was sworn into the Senate fewer than two months ago, she’s been kicking ass and taking names. Using her influential seat on the Senate Banking Committee, Warren has already called out the nation’s top financial regulators for failing to take Wall Street firms who broke the law to trial.
In a February 14 hearing, Warren told regulators that, “We face some very special issues with big financial institutions. If they can break the law and drag in billions and billions in profits, and then turn around and settle — paying out of those profits — they don’t have much incentive to follow the law.”
Warren continued taking on this nation’s corrupt financial industry yesterday, pressing Federal Reserve Chairman Ben Bernanke about the risks and fairness of having banks that are “too big to fail.” Warren asked Bernanke, “We’ve now understood this problem for nearly five years. So when are we going to get rid of ‘too big to fail?'”
Warren also asked whether the big banks should have to repay taxpayers the whopping $83 billion a year they get from what is essentially a government subsidy. Interestingly enough, this amount nearly matches the big banks’ annual profits, and without it, CEOs like Jamie Dimon wouldn’t be able to get their multimillion-dollar bonuses and windfall payouts.
While Warren’s efforts to point out the corruption and greed on Wall Street are great, she’s only one woman, and she alone can’t take down the big banks and successfully regulate them. The entire system needs to be changed.
For too long now, we’ve been following the Bush Administration approach to dealing with the big banks.
When the banks began to freeze and the economy began to crash, the Bush Administration had two choices. One was taking the route that FDR took. FDR put the safety and well-being of the American people and homeowners first, and soon the economy began to improve and the banks bounced back, with regulations.
Unfortunately, the Bush Administration chose option two: Bailout the banks with 700 billion dollars in taxpayer money, have the Fed give them trillions in free lines of credit, let them get back on their feet and hope for the best. We all know how well that’s worked out.
It’s time to stop propping up the banks, and end “too big to fail.”
One way to do that is to bring back the Glass-Steagall Act. Under Glass-Steagall, we had two kinds of banks. One, like your neighborhood bank, did checkbooks, home loans, and savings accounts. Their technical name was “commercial banks.”
The second kind of bank was what were called “Investment Banks,” places like Merrill Lynch used to be, where you bought and sold stocks, bonds, and commodities. Betting banks.
Glass-Steagall said that these two types of banks had to be different and separate, couldn’t even be owned by the same people, and couldn’t get into each others’ business. So you always knew that your bank wasn’t gambling in the back room with the money in your checking or savings account, and wasn’t out hustling your mortgage to some foreign investment fund.
But Republican Senator Phil Gramm and his banker buddies didn’t like that at all. So in the final year of the Clinton Administration, they put an end to the Glass-Steagall act that had been protecting us ever since the Great Depression.
The result, just like in 1929, was predictable. The banks gambled, lost, and crashed. And took us all down with them.
It’s time to put back into place that firewall between commercial and investment banks, and end banks that are too big to fail. And to stop big bank crony CEOs like Jamie Dimon from padding their wallets at our expense. Let’s make banking back into the boring and safe industry that it was before Phil Gramm and his Republican buddies came along.