Like termites, the American Bankers Association (ABA) does most of its damage in the dark. But the ABA is getting a brief period in the limelight this week as a result of the Showdown in Chicago.
The Showdown is a series of protests organized by a number of community groups and labor unions at the ABA's annual convention. The protests are designed to call attention to the fact that the big banks, many of whom are in existence today only because of a taxpayer funded bailout, are now paying out huge bonuses to their executives. They are also spending money by the bucketful on lobbyists to obstruct meaningful financial reform. Meanwhile, tens of millions of people have lost their jobs and/or their homes due to the recession brought on by the banks' recklessness.
More than 1,500 people took part in the first day of the showdown, as protesters confronted the bankers at their 1920s swing ball. Prior to crashing the ball, the protesters listened to a series of speakers condemn the bankers' take the money and run business strategy. The list of speakers at the Showdown includes Richard Durbin, the Senate Majority Whip, and Sheila Bair, the head of the Federal Deposit Insurance Corporation.
When it comes to passing meaningful reform, the ABA is well-positioned to win the inside game in Congress. They have the team of lobbyists and campaign dollars needed to stay on top of the details of legislation and to press their agenda with Congress. Those seeking to rein in the power of the big banks are seriously outgunned in Washington.
However, the picture looks different outside the beltway. This is why the TARP went down to defeat on the initial House vote last September. Hundreds of thousands of people called their representatives in Congress to express outrage over the plan to hand banks hundreds of billions of dollars with almost no strings attached.
The Showdown in Chicago is tapping into this same sense of popular outrage. It is very important first step. There will have to be many other showdowns in other parts of the country to win a victory over the big banks (and hopefully making them much less big), but this Showdown has gotten their attention.
The big banks have a hard case to argue. Why should a country that supposedly idolizes the market have banks that are so big that the government is obligated to bail them out if they get into trouble? That is why Senator Durbin spoke at the Showdown. That is why Sheila Bair spoke at the Showdown. Even former Federal Reserve Board Chairman Alan Greenspan argued for breaking up too big to fail banks.
We just have to force Congress to get behind the effort to break up the banks. A few more successful showdowns can get Congress to see the light.
The Morning Email helps you start your workday with everything you need to know: breaking news, entertainment and a dash of fun. Learn more