JPMorgan Chase, Goldman Sachs, Bank of America and the handful of other behemoths of Wall Street that dominate American banking – who needs them?
After enduring years of insatiable greed by the slick-fingered hucksters who run these gambling houses; after watching in dismay as their ineptness and avarice drained more than $19 trillion from America’s household wealth since 2007 and plunged our real economy into the worst financial crisis since the 1930s Depression; after witnessing their shameful demands for trillions of dollars in taxpayer bailouts to save their banks and their jobs; and now after seeing them return immediately to business as usual, including paying multimillion-dollar bonuses to themselves — we have to ask: Huh!?!
Oh, no-no, cry the banking titans, don’t even think of looking behind the curtain! Trust us, say these Wall Street alchemists, for we are essential to juicing the economy with our complex abracadabra investment schemes.
In fact, however, those schemes just move money around, spiraling real investment capital from the grassroots up to superrich global profiteers who create nothing but more wealth for themselves. Shell games at carnival sideshows are more honest than big-bank trading houses, for the hustles of such hucksters as JPMorgan, Goldman, B of A, etc. are based on financial illusions, off-the-books accounting, illegally leveraged borrowing, ridiculous tax subsidies and hide-the-pea secrecy.
The obvious truth is that these high-flying, high-tech, high-speed emporiums of high finance serve themselves, not us — so we have no obligation or need to keep serving them. Of course we need banks — to lend to us consumers and our productive businesses, to handle our commercial transactions, to manage our savings and provide financial advice, etc. But that’s not what the leviathans of Wall Street do. Rather than keep protecting them, let’s decentralize America’s capital, reinvesting our public trust in community banks and credit unions that actually deserve it and serve it.
This month has brought us yet another screaming example of a big-shot Wall Street banker who got too big for his britches — a story revealing the inevitable excess that comes from banks that are simply too big.
In April, Jamie Dimon — the swaggering chief of Wall Street’s largest financial conglomerate, JPMorgan Chase — had scoffed at critics who warned that his banks high-flying investment division was dangerously overextended and risking collapse. “A complete tempest in a teapot,” scoffed Dimon. On May 10, however, Jamie’s teapot exploded, blowing a $3 billion hole in the nation’s largest bank … and in Dimon’s reputation.
Poor Jamie — why didn’t someone tell him?
Some tried. As early as 2009, JPMorgan’s own internal risk managers raised concerns that this opaque division was pouring billions of dollars into speculative trades that were too large and too complex even to understand, much less manage. But their caution was dismissed, and Dimon himself pushed for more of these wondrous schemes, hailing them as perpetual profit-machines.
OK, the bank’s execs were bedazzled by visions of sugary bonuses, but where were the federal regulators, who’re supposed to dog banker excess? Shoved aside by Dimon. While the Federal Reserve and Comptroller of Currency had more than 100 inspectors imbedded in JPMorgan, none were in the reckless investment division. The bank’s big-shot boss, who is politically wired to the top leaders of both the Republican and Democratic parties in Washington, had aggressively pushed against having regulators hovering around his hot investment profit center, assuring them that nothing was happening in there worth watching.
Dimon had extra clout, for not only was he a Wall Street star sitting atop the biggest bank, but — get this — he also has a seat on the board of the New York branch of the Federal Reserve, which has regulatory authority over Wall Street and will now conduct the inquiry into JPMorgan’s disastrous risk-taking. Yes, Jamie the Fed official will investigate Jamie the banker.
This is proof again that these banks are simply too big – too big for managers, regulators and the public interest. We don’t need yet another regulatory Band-Aid, we need Teddy Roosevelt to bust ’em up.
Not everyone can pay for the news. But if you can, we need your support.
Truthout is widely read among people with lower incomes and among young people who are mired in debt. Our site is read at public libraries, among people without internet access of their own. People print out our articles and send them to family members in prison — we receive letters from behind bars regularly thanking us for our coverage. Our stories are emailed and shared around communities, sparking grassroots mobilization.
We’re committed to keeping all Truthout articles free and available to the public. But in order to do that, we need those who can afford to contribute to our work to do so — especially now, because we only have the rest of today to raise $20,000 in critical funds.
We’ll never require you to give, but we can ask you from the bottom of our hearts: Will you donate what you can, so we can continue providing journalism in the service of justice and truth?