Break Up These Banks

Excellent news from the NYTimes the other day: banks which are getting nervous about pesky government oversight are starting to ask to return government bailout money. As I wrote a while back in a fit of outrage when news reports indicated that Geithner wanted to go down the same sorry path that Paulson had been going down-- handing government money to bankers with no strings attached to make sure they weren't just pocketing it while doing nothing for the economy -- I think that if bankers don't want accountability, they shouldn't take our money. If they are in such bad shape that they have to take our money to survive, there needs to be tough accountability on how they do business.

I also fundamentally agree with David Sirota that if these corporations are too big to fail, then they are too big to exist: a proposition also agreed to by the populists and progressives of the late 1800s/early 1900s, by Abe Lincoln, by Teddy Roosevelt, by FDR, by Harry Truman. Progressives of all eras have understood that corporations that grow too enormous threaten our economy and our democracy, and should be woken up into smaller entities that can't do so much damage when they are mismanaged. The era of bank consolidation has to come to an end, and these monsters need to be broken into smaller companies just like Standard Oil was in the early 1900s.

Ironically, some of our tax dollars were actually used by these bank conglomerates to buy other banks, instead of, say, giving out loans to consumers and businesses trying to buy things or make investments that would create jobs.

The mess these big bankers have created for our economy is stunning, and it will take many years to work our way out of it. Every day dealing with the wreckage of all this is going to be harrowing. But we can start by doing what our progressive forbearers did: breaking up the big financial trusts, regulating them with vigor, holding them accountable. When a class of people has screwed up as terribly as big bankers have, we should take away their power and watch them like hawks for the rest of their time on this earth.

Comments

[Helzapoppin]

What Mike said.

[Tanyars5]

I second what Mike said

[sabredance]

So banker's want to give back some of the TARP money? How about paying the 10 years of FDIC insurance premiums they blew off first?

[writerjohnny]

Competition is a good thing but not as the final arbiter of the distribution of material things. Yes, individuals should compete with skill and knowledge to be brain surgeons. No they should not live 5 times better than janitors because they were LUCKY to be born with bigger brains etc. It should be seen as a priviledge to be lucky enough to be able to help humanity a little more because you have more to give. For every Trump, Ford or Joe Kennedy there are many Ghandis, Albert Schweitzers and Mother Theresas. And no, Stalin wasn't a communist. He was an imperial dictator who killed real communists by the thousands.

[writerjohnny]

Sorry but here's the bad news for anyone trying to optimistic about saving capitalism; Marx was right. Capitalism has unresolvable contradictions that will eventually be it's own worst enemy. Not "communists". Not "terrorists". Greedy individuals and families that own and run the world are the "King George" of the present. As long as there is disparate economic inequality between the few and the many there will be instability, violence, poverty, starvation, injustice, war and self-destruction.
And while Das Capital is a brilliantly researched analysis of capitalism as a logical stage in the relationships between humans the basic idea of communism is very simple. "From each according to their ability to contribute and to each according to their needs". At once capturing the idea that we all are born with different levels of physical and mental skills(the ultimate idea of being an individual) and different levels of needs(not wants). Communism is not an idealistic liberal idea of how we should just be good to each other although that is not a bad idea. It is part of the analysis that the entire history of humanity is that struggle for equality and capitlalism was a progressive step but not the final chapter.

[Rule Of Law]

"Greedy individuals and families that own and run the world are the "King George" of the present."

These families have been with us for at least 500 years. And they ran King George, too, through the Bank of England. They wrote the book on political/economic force. We are at last seeing their ascendancy using globalism and technology to move us toward the new world order. If it is just a step, as you say, hope it is a very short one, as 500 years of wars, murder, induced famine and disease, and economic booms and busts is about all I can handle.

[standard]

No one who examines reality, and rationally accepts facts, believes that communism is benign, given its track record: totalitarian oppression of dissent, militarism, imperialism, gratuitous slaughter and failure to elevate the well-being of those who live under it beyond marginal levels--while the leaders of its imposed governments, armies and secret police forces have plundered at will and thrived.

Market capitalism, when regulated to advance the general welfare, or actual, non-Marxian socialism, or the sort of blend of the two found across Western Europe--when coupled with political democracy and its attendant freedoms of choice, expression and travel--have produced levels of social mobility, economic well-being and accomplishment that rival even the fatuous but groundless claims that communists have always made.

Keep your hammer and sickle. I'll take the multi-party ballot and the rule of law every time--as, it seems, has almost all of Central Europe. However, Belarus is still open for business if you really want to experience the usual results of the disproved dogma you're dispensing. While you're still here, feel free to speak up--but don't be surprised if you're laughed at a great deal.

[Rule Of Law]

And one more thought---The banks are willing to give the money back because--Get This--There never really was a banking crisis!

What we have is a carefully architected, beautifully managed, long term assault by the International Banking cartel to create chaos in the US and the rest of the world in order to drive the markets down and buy up our country on the cheap. Consolidations that happened without the oversight that would have been brought by Congress even a year ago.

And a Depression that will allow the move toward the new world order--aha, tin foil: But no, read Henry Kissinger's article from January 12 this year. The plan is to impose a new Royalty to replace the one we threw off in 1776 with the banks finally in complete power as they have been in most of Europe since Rothschild created the Bank of England.

There never was a crisis. They don't need that money and for sure, they don't want oversight. They want power. And they've gotten it.

[Rule Of Law]

This seems to have gone missing--

These Banking Families have been at this for over 500 years! They wrote the book on the politics of manipulation and fear. You say we should break them up? Who will do that? Kennedy tried to print silver certificates. He died, and Johnson revoked that one particular law while on the plane from Dallas to DC! Obama continues to back trucks up to the Treasury to fill with more bailout money (which has not helped, and will not help) for the Banks that caused the crisis we 99% face. Who controls whom, here?

With the Executive branch filled with Wall Street bankers and Federal Reserve apparatchiks--all tied closely to Goldman-Sachs and Morgan--when will we see the heroes we need to do the work that you want to see done? Who will lead? I agree it should be done--and more! But, no offense, it will take more than you and David Sirota wagging your fingers to make it happen.

[Rule Of Law]

These Banking Families have been at this for over 500 years! They wrote the book on the politics of manipulation and fear. You say we should break them up? Who will do that? Kennedy tried to print silver certificates. He died, and Johnson revoked that one particular law while on the plane from Dallas to DC! Obama continues to back trucks up to the Treasury to fill with more bailout money (which has not helped, and will not help) for the Banks that caused the crisis we 99% face. Who controls whom, here?

With the Executive branch filled with Wall Street bankers and Federal Reserve apparatchiks--all tied closely to Goldman-Sachs and Morgan--when will we see the heroes we need to do the work that you want to see done? Who will lead? I agree it should be done--and more! But, no offense, it will take more than you and David Sirota wagging your fingers to make it happen.

[beaupritchard]

It isn't just the monopoly power that makes a company a candidate to be broken ... when they become so big or so entangled in foreign affairs that there is an implied understanding that tax payers are on the hook they should be broken up.

[babyboomerorig]

Monopolies are illegal, if memory serve me correctly. Back in the late 70's the governmnt broke up Ma' Bell because the company had virtually gathered up all but small communities with phone service. Back then, too, banks were limited to counties or states, not national banks. We knew the guy to see for a loan for a car, tractor, house, etc. That same guy could be talked to if we needed an extension for one reason or another. That local bank held our mortgage until it was paid.

The banks started becoming monopolies again in the 80's when the credit cards started becoming so popular. Then with the deregulation in progress, we no longer knew who owned what or who to talk to about our mortgages.

The banks need to be broken up....ther­e's too much power in the wrong hands.

[cuchulain]

That should have been one of the stipulations from the beginning. Too big to fail, means too big to exist.

If they take government funding, they agree to break up into very small pieces.

There is no positive, national rationale for their size. Typically, getting bigger means slashing jobs. Getting bigger means reduction of competitiveness from the consumer POV. Getting bigger means too much pull with government through lobbying. In short, it means too much power for that entity, and too little responsibility and accountability.

This crisis should have spurred a massive anti-trust crusade. Doesn't look like it has in the slightest. We don't have to limit it to just the banks, either, or just the businesses that take government funds. The tax code should be reworked to include incentives for remaining small and disincentives for growing too big, mixed with those that promote job hiring and penalize job outsourcing.

Time to make business work for all Americans, not just the top 1%.

[gorideabike]

The bankers were not fools in this catastrophy. They certainly reached knave status in cashing in the credibility their industry has worked so hard to achieve so that people would trust them with their money. But let us not think they are the kings who direct these capers.

[DennyCrane]

Excellent article. This is why I'm in favor of nationalizing banks. The financial industry isn't just any industry. It's one that every other industry depends on. When our national and global best interest is dependent on one industry, how can we leave it untouched and unregulated? And if banks really want our money to fix their mistakes, then give up ownership. The unbelievable hypocrisy of banks. They're incredibly strict about how they lend to and what conditions are attached, but when they need a loan, they want no conditions. And I'm tired of any company being too big to fail. No company should ever be allowed to become that big where its failure would devastate the economy. Just look at GM. They claim they can't be allowed to fail and that's sufficient reason to give them money. Sorry. Next time, we shouldn't let you get so big.

[Kaviraj]

The Medical Profession Speaks out on the Financial Bail-Out Package:

Allergists voted to scratch it, and the Dermatologists advised
not to make any rash moves.

Gastroenterologists had sort of a gut feeling about it, but the
Neurologists thought the administration had a lot of nerve, and
the Obstetricians felt they were all laboring under a
misconception.

Ophthalmologists considered the idea shortsighted; the
Pathologists yelled, "Over my dead body!", while the
Pediatricians said, 'Oh, grow up!'

Psychiatrists thought the whole idea was madness, Radiologists
could see right through it, and the Surgeons decided to wash
their hands of the whole thing.

Internists thought it was a bitter pill to swallow, but the
Plastic Surgeons said, "This puts a whole new face on the
matter."

Podiatrists thought it was a step forward, but the Urologists
felt the scheme wouldn't hold water.

Anesthesiologists thought the whole idea was a gas; and the
Cardiologists didn't have the heart to say no.

In the end, the Proctologists left the decision up to the
a'holes in Washington!

[jennyjen]

Sheila Bair, chairman of the FDIC was interviewed on 60 minutes last sunday. She said the same thing - a bank should not be allowed to become "too big to fail".

http://www.cbsnews.com/stories/2009/03/06/60minutes/main4848047.shtml

Keep this topic alive - Obama is listening. Now is the time. Be brave Barack.

[JScott]

I saw that and that was the first thing I thought of when I read this, so I'm not the only one,
hope those stakeholders who influence policy will take note of this as well.

[treetracker]

Be prepared - the CEO's have already lawyered up and and we're going to be hearing "I didn't know" along with many other variations of the same song. There will be no admissions of anything other than incompetence (which is BS considering their positions in these companies). It will be hard to prove criminally unless some minor analysts at Moody's and S&P who rated these toxic assets as AAA decides they don't want to go to jail (always go after the lowest guy on the list, they will get you the top guy). They were in the pockets of the CEO's and I guarantee somebody got paid off. None of these people are as stupid as they're going to claim they are. Wonder how many emails/con­versations are sitting on a disk at NSA? This may be one time that we will be glad our government was spying on us. LOL

They're staffing up in every department to handle these investigations and as soon as the fire is under control, it will be time for these folks to be afraid, very afraid 'cause they will be getting a knock on the door.

[Vere15]

It's amazing how things are different compared to two hundred years ago

Quoting from Old Bailey transcript on "Forger Fauntleroy"

1350. HENRY FAUNTLEROY was indicted for that he, on the 1st of June, 1815, feloniously did falsley make, forge, and counterfeit, and cause and procure to be falsely made, forged, and counterfeited, and willingly act and assist in the false making, forging, and counterfeiting a certain transfer of a certain interest and share, to wit, 5000 l. 3 per cent. Annuities, standing in the name of Frances Young , of, and in certain Annuities established and made transferrable at the Bank of England, by certain Acts of Parliament, (the title of the first of which was set out, together with a copy of the said forged transfer,) with intent to defraud the Governor and Company of the Bank of England ..
GUILTY - DEATH . Aged 40