There was a large public outcry against sending $700 billion to corporate banks a couple of months ago. It wasn’t hard to figure out why. Those banks and their Con-servative government gamed the system against Americans for years. People wanted the $700 billion to go to people and projects that would actually benefit the economy. Remember, the Bush administration redacted portions of the contracts with the banks that would allow Americans to see where their tax money went. Instead of opening up credit markets, the banks were allowed to buy each other out. Now, there are 3 Superbanks left.
In a sad demonstration of just how little analysts actually understand the banking-government relationship and a disgusting demonstration of how the corporate media has allowed that relationship to become a cancer in our economic system, the article has the following:
Moreover, many analysts worry about how federal and state authorities, who were unable to prevent the current financial industry meltdown, will be able to monitor the new giant banks that combine a wide range of operations from investment banking to consumer lending.
Those authories were able to prevent the current financial industry meltdown, they just chose not to. There are laws on the books regulating banking activity – they just need to be enforced. That is exactly what the corrupt Bush administration chose not to do. They argued against regulation of the industry. So instead of changing the law (transparency), they decided not to enforce it. We have a Department of Justice for a reason. But it requires people in government who want to govern, hence the govern in government. Bush and his cronies achieved power with the intention of using the U.S. government as their personal piggy-bank. By the time the American people could respond, they would have sucked everything dry. And it’s worked spectacularly. This country has over $10 Trillion in debt, half of which was racked up in the past 7 years. The other half took decades to accumulate, most of which happened under Con-servative presidencies.
Here is what I said when the financial crisis struck: If the corporation is too big to fail (if its failure would harm the economy), it’s too big to exist. Sen. Bernie Sanders from Vermont has quite succintly put that concept together and I’m happy to borrow it. Here is what it means: in the wake of the worst economic crisis since the Great Depression, Con-servatives allowed the already too-large financial corporations to grow even bigger. Consumers now have fewer choices. This situation is a violation of the Sherman Anti-Trust Act. The federal government has the responsibility to enforce that Act and break up these Mega-Banks to more manageable size. In fact, the new Big 3 control 1/3 of this country’s banking industry. The rich got much, much richer with Cons in the White House. The American people got screwed. In fact, when Americans have to keep paying higher ATM taxes and higher account taxes and higher taxes associated with everything they do through their bank, I hope they think about how good bank consolidation is for them.
In fact, existing federal banking laws say that no bank can have more than 10 percent of the domestic deposit market — a threshold recently surpassed by all three superbanks.
When asked whether the government would take any action, a Justice Department official was noncommittal.
The worst financial crisis in 70 years, and the DoJ official is noncommittal. I hope no one seriously wonders why John McCain lost so badly on Tuesday. He offered nothing different in his approach. At least with Democrats, there is a chance of a difference. It will require Americans pushing them to do the morally correct thing, because those MegaBanks will wave loads of taxpayer cash under elected officials’ noses to keep looking the other way while they run amok.
In the current environment, such rapid consolidation is a “no brainer,” says Gregory F. Udell, Chase Chair of Banking and Finance at the Indiana University Kelley School of Business.
The risk of creating monopolies, he says, “is a lot less than the risk of having a lot of zombie institutions out there.”
He also points out that consolidation in the banking sector, though recently at a fever pitch, is nothing new.
Indeed, the number of commercial banks and savings & loans in the United States has fallen in the past 20 years to 8,451 as of June, compared to 16,574 in 1988, according to FDIC data.
In the wake of the S&L crisis (another Con-caused disaster for average Americans), Cons allowed banks to eat each other up, reducing competition and transparency in the industry. In the wake of this latest crisis, the process has simply accelerated. As far as Udell’s sentiment goes: it’s another arrow shot into the free-market religious zealots. As long as taxpayers are tapped to socialize corporations’ losses, there is no free-market.
I can’t wait until the Cons in charge of our government are sent back to the holes where they came from. I can’t wait until responsible adults are running this country again. The banks need to be broken up into manageable pieces. The American people need officials who advocate for their interests.