Who Will Take On the Banks?

It was smart of the top Democrats to cut presidential candidate Rep. Dennis Kucinich out of that South Carolina debate, where they lamely attempted to deal with the dire consequences of the banking meltdown without confronting the banks. They made all the proper concerned noises about millions of folks losing their retirement savings and homes, but none was willing to say what Kucinich would have said: Bankers are crooks who will steal from the public unless the government holds them accountable.

How do I know Kucinich would have said that? Because I interviewed him for the Los Angeles Times back when he was mayor of Cleveland and the banks foreclosed on his city after he refused to sell the public power plant. Others can talk a populist line, but Kucinich lived it. He was forced out of office that time, but voters realized 10 years later that Kucinich had been right. Thanks to the public power alternative that Kucinich refused to sacrifice, Cleveland had cheap power, and he was elected to the Ohio Legislature and then to Congress as his reward.

I bring this up now not to push a Kucinich presidential candidacy, which seems quite forlorn given the power of big money and big media to set the stage for permissible political debate, but rather to hold out a yardstick for measuring the "progressivism" of the top three Democrats. Sure, they all would be preferable to their likely Republican alternatives, although Sen. John McCain has been far better than all three Democrats on both campaign-finance reform and taking on the defense contractors who have been bleeding us dry since 9/11. I got a little worried when Sen. Hillary Clinton said she could do the best job in confronting McCain on national security; she is shameless in throwing money at war profiteers, while McCain has held the line on some of the more egregiously wasteful military expenditures.

With a military budget that has more than doubled since 9/11, soaking up trillions of dollars in obligations for future generations, it is stupid to argue about whether the Democrats or Republicans would spend more on needed domestic programs, because the money for those programs will not be available. Kucinich was the one candidate on the Democratic side willing to do what Rep. Ron Paul has in the Republican debates--challenge the phony patriotism of ripping off the taxpayers for war-fighting expenditures in Iraq and elsewhere, leaving us less secure.

While Paul is very good, indeed the best candidate, on the waste of taxpayer dollars on foreign military ventures, as is expected from a libertarian, he is hostile to the need for government regulation to control the excesses of the marketplace. And it is those excesses that are at the root of the financial chaos we have visited upon the world. As with the Enron scandal, which was the direct result of the bipartisan-supported deregulation of the energy industry, so too the subprime mortgage and easy-credit scandals now upon us. For decades, banking lobbyists have pushed through legislation freeing them to wreak havoc on our lives while they profit from lucrative personal bailouts even as their own companies suffer.

Deregulation became the mantra covering corporate theft in both Republican and Democratic administrations, and it is amazing that not one of her interlocutors at the South Carolina debate asked Sen. Clinton about her husband's signing of the Gramm-Leach-Bliley Act of 1999, which permitted banks, stockbrokers and insurance companies to merge, overturning one of the major regulatory achievements of the New Deal. More important, both political parties have refused to place any serious restraints on the interest charged by banks and think it perfectly normal, indeed healthful, for the economy that folks are given home loans or credit cards at unrealistically low interest rates calculated to soar after an introductory phase. What a sorry scene to see the top Democratic contenders unable to agree that some interest rates below 30 percent may rise to the level of usury.

For those unfamiliar with the moral crime of usury, believing it's only a legal crime if loan sharks threaten your knee caps, let me quote from Ezekiel 22:12 of the King James Bible: "... thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord God." Not being overly familiar with Scripture, I am grateful to Kucinich, a product of a stern Catholic upbringing, for having informed me, more than a quarter of a century ago, that the bankers, and the politicians who service them, are courting the wrath of God--even if they fool the voters.

Comments

[TheKiddy]

John Edwards has been fighting the good fight, and he has (to the extent possible in a media blackout) taken on the credit card companies, pay day loans, deceptive loan practices leading to sky high interest rates on mortgages, and the impact of the big money men on our going to war in Iraq. Sorry, but Kucinich has done important things and said important things, but Edwards is fighting for us, too.

[paixa3]

Mr. Scheer, I surely am a fan of yours.

The posting is SPOT ON, like most are.

It is time to reel in the bankers, PERIOD.

[RTIII]

Yes, thanks for pushing Dennis. But you're a few months too late. Or, perhaps you tried but Arianna refused you? Nomatter. We do still have one horse in the race: Edwards. I propose you start pushing his candidacy while there's still time. He CAN still win and he's our only hope right now.

[Sciguy]

"Usury" no longer exists, does it? The Truth in Lending Act ensures that everyone can find out what interest they're being charged, and although each state has usury limits, they're not easy to find. Of course, banks have different rules - how could they soak up so much money otherwise? If predatory practices like payday loans were illegal, all of those creepy businesses would go under immediately. Somehow, they manage to find loopholes so that their 390% (not a typo) APRs are legal.

---

Who will take on the banks? No one. Most folks have at least a checking account or a small savings account, and a lot of "little people" have stocks and/or bonds and/or assorted funds - all of which are tied to banks, since banks are the ones who create the money as well as control the money. If the banks are, heaven forbid, punished because of their practices, the "little people" will be the ones who lose money. Nobody wants to lose money, even if it means straightening out the mess we're in. Kucinich was right, but how many other politicians (who are wholly or partly owned subsidiaries of banking interests) will speak up, let alone actually DO anything?

[ptarantino]

Great writing, as always.

I am mostly in the Ron Paul camp, but think you are right in saying his system will not work without some sort of government regulation to control the excesses of the marketplace.

[FogBelter]

The reason we need Government Regulating Business is because left to it's own devices, Business will ultimately screw up and Government will need to step in and bail Business out anyway. And once Government rescues Business from itself, Business turns around and blames Government for the problems in the first place.

I am firmly convinced that dealing with Business is like trying to reason with a Heroin Addict. The Addict always has a reason for the damage they do to themselves and others. Business is Addicted to Money ... Money is the Drug. No Amount of Money is enough. No act of self limitation on pursuit of Money is considered.

We have no idea the true health of the Banking System. When Clinton signed Gramm,Leach,Bliley into Law in 1999 he freed the Banks from the restraint on investment that had kept the Banks solvent since 1933. We have no idea of how much depositor money has been invested in these evaporating Securities ... None.

And even as Banks benefited, to their own detriment, from the Freedom the Gramm,Leach,Bliley Act ... I am certain there are CEOs in Banks across wondering how they have come to this financial precipice, and I have the answer.

The Banks twisted arms to get regulations binding them dismissed, confident that they were capable of self-regulation, when History proves otherwise.

Clinton should be asked about her husband's signing of the Gramm, Leach, Blilely Act, because that is the origin point of much of the Financial Disaster we are seeing today. George W. Bush can be blamed for a lot of things, but Bill Clinton owns the deregulation of the Banking, Brokerage, and Insurance Industries.

[BurningBush]

Exactly, Harry!

And Bush's "Stimulus" package only affects the money loaned BETWEEN the banks themselves. What a surprise! So this will have absolutely no affect on the average citizen, except of course their 401k and retirement funds will continue to evaporate.
By the Fed cutting interest between banks 3/4%, do you really think anyone making under $100,000/year will realize any reduction in the interest they are paying credit cards or car loans (of course you can forget about the largest form of usuary, the American Home Mortgage.) By the time I am finished paying for my small bungalow, which I purchased for $130,000. I will pay the banks interest totalling more than $170,000 for a grand total of over $300,000 for a small 2 bedroom bungalow in Detroit suburbs, which thanks to the crumbing manufacturing sector here is now worth less than $90,000. What a deal for the banks. I have actually considered burning the place to the ground, using the insurance money to pay off the bulk of the loan, and just walking away with a much less substantial loss...where are my matches?

[Oldtimer]

I would love to see Edwards win a primary and
wun more delegates by speaking at the convention. Hillary poses a threat to the
Democratic party. She could lose in the general to McCain, something unthinkable given the Bush
presidency is the worst in history.
Even if she wins it will be a pyrhic victory.
She will have no coat-tails. The senatw will be
split and no major change will take place.
ALl thanks to Hillary and Bill.

[Meanwhile]

"courting the wrath of God" -- it's a nice thought, if you believe in it. I personally would MUCH prefer the wrath of the voters.

[readyforchange]

Robert:

Thanks for this blog and addressing the elephant in the room. Who will take on the banks? They are criminals. I'd be willing to bet consumers will NOT benefit from the Fed cutting interest rates. No "trickle down" here...

I say let it all collapse if it will cause some healthy regulation of the banking industry. They have gotten away with this long enough.

[Sundialsvc4]

You are entirely correct about usury, and you selected one of the least-draconian of the Hebrew scriptures to quote. In Arab lands, they cut off your hands as they do for any common thief.

We know these things. As ordinary citizens of this country we know these things quite plainly because we, too, live with them every day. And we realize by now that the root cause of a great many of our problems ... is, simply, "crime in the state-house."

It's pretty obvious, I think, to all of us that this year-and-a-half long "so-called election" is nothing more than "vote if you want to bother to, but you're gonna get eight more years of the same."

We need banking reform and a litany of other things, and the real reason why we are not getting it ... happens to also qualify as "crime." The high-crime of bribery, in fact, among many other things. We cannot continue to tolerate crime, to act as though it was "just the way it is now," because under such terms we are never going to get the timely relief that by now is more than just a necessity.

So... to get the bank reform, to get the health reform, to get so many things that this Republic needs, we are going to have to face something else: the crime and the criminals that have taken up camp in our governments at all levels.

[Pdubya]

I like what you say about Paul. Try and apply his deregulation principles, however, to a system that would limit lobby tied to money (Dr. No knows), tort reform, etc. Property rights and equal footing are stalwart principles that need to be applied to a free market system to make it effective.

Also, keep in mind that he is a constitutionalist. That alone would set a HUGE tone for thwarting government contracts that are the cows at the trough on lobby whoring Congress.

He has the answer and it is tough love for sure, but damn right.

thanks for the article

p.s. dennis and ron are friends

[lostnacfgop]

Bully for Dennis. But he has no chance for all the wrong reasons. When do we all stand up - in a sort of real-life Howard Beale moment - and shout out "I'm mad as hell and I'm not going to take this (what candidates you're shoveling toward me) anymore to the MSM? The powers that be want a 2 horse race - largely because they've plunked down and can't lose. The remaining wild card is Edwards. He's not beholden to the big money players - they're scared gutless of him and what he stands for. The other two want to make nicey nice and slap backs and press the flesh and compromise with these interests that have been quiely raiding our pantries and our would-be nest eggs since the time of Saint Ronald. Basta! Enough! Rally around someone who won't back down. Edwards '08.