If you have something to say...
Say it on the Huffington Post
If you have something to say...
Say it on the Huffington Post
The Blog
It is business as usual on Wall Street and of no concern to us, the unwashed masses. Meanwhile, JPMorgan CEO, Jamie Dimon is out and about again, railing against regulation.
2012 is not a referendum on Obama, it's a referendum on the new Tea Party/GOP, and the survival of the nation, economy, your job and your family depend on which cloud you believe in.
If Congress is truly serious about banking reform, it needs more than just well-intentioned laws: it also needs the right people to enforce those laws, it needs to give those people the resources they require to do their job properly, and it needs to pay them decently.
The biggest banks argue that if the lesser mortals who populate the institutions of democratic government don't understand the intricacies of their business, then we just shouldn't meddle.
It's going to take some time to suss out exactly what happened with the Facebook IPO, but step back and consider the broader implications. They are staggering.
An unaddressed cause of the 2008 financial crisis was banks' reliance on elaborate schemes called repurchase agreements, or "repos," to fund their operations. Four years later, the usual suspects remain heavily dependent on them, endangering the financial system.
Even as recent headlines detail yet one more investment debacle at a behemoth Wall Street bank, small businesses and credit unions continue to carry the water for America's communities and ultimately, our entire nation's economic well-being.
JP Morgan's multi-billion punt is the latest evidence that the financial sector remains a minefield five years on from the initial crisis. Despite the efforts of regulators there is a vacuum at the heart of financial global governance.
It was almost four years ago that Ben Bernanke, Henry Paul Paulson, and Timothy Geithner ran to Congress warning that the end of the world was near. They said the banks were drowning in bad debt and without a massive bailout they would soon be forced into bankruptcy. Congress quickly coughed up the money in the form of $700 billion in TARP loans. The Fed contributed trillions more. Undoubtedly most of the bad debt was due to stupidity, which does not seem to be in short supply on Wall Street despite the high paychecks. But there was more than just stupidity involved here. There was an epidemic of mortgage fraud that was identified by the FBI as early as 2004. And yet, in its first three years, the Obama administration did almost nothing to investigate criminal practices that contributed to the bubble and the subsequent meltdown.
Most bankers are not the unethical and blindly greedy creatures that politicians and the media make them out to be; and there is no doubt that without the productive activities of the banking sector, no other industry in our nation would be able to survive or thrive. But that does not mean there isn't a ghost in the machine.
The JPMorgan episode may be the warning that Congress needs to return to its role of protecting the public rather than coddling the banks. But it also raises a question: How many times does a lesson have to be taught before it is learned?
Now that President Obama's views on gay marriage have "evolved," it's time for his views on Wall Street to likewise "evolve" and for Obama to forcefully campaign to break the stranglehold of Too Big To Fail banks on the economy.
President Obama and others have used the recent $2 billion loss by JPMorgan Chase as a call for more regulation. What the president and his allies miss is that recent events at JPMorgan illustrate how the system should -- and does -- work.
A wrap-up of stories and posts you might have missed or overlooked -- the ones below the fold.
Sure the economy is still a mess, unemployment is high, civil services and pensions are being slashed, a record number of people are on food stamps and families are losing homes. But Jamie Dimon does his best to distract the United States from these unpleasant realities.
While regulation comes with a significant price tag, those costs pale beside the losses that banks can incur when left to their own devices. Will regulators take the hint that the cost-benefit fight is one they can win?
