Wall Street is proving once again that they simply cannot be trusted. What is required is even greater and stronger regulation, not less. We also need laws that expeditiously put bankers in jail for the kinds of willfully unethical actions undertaken by JP Morgan senior managers in the London Whale escapade.
Few of us are likely to read a 307-page Senate report. Instead, read Gretchen Morgenson’s New York Times article, “JP Morgan’s Follies, for All to See” from March 16.
Wall Street remains out of control. In fact, they are now a greater threat to stability in the global economy than before the crash they caused just five short years ago.
It’s also important to understand and admit that Dodd-Frank is not strong enough despite any accusations over its supposedly onerous overreach.
What other conclusions can anyone come to when the government seems powerless to foresee and forestall the world’s largest derivatives trader, a firm described as “the bank that enjoys the best reputation among its peers,” from acting with this kind of hubris, impunity, and disregard for ethical conduct?
The Senate report disproves this premise <that Dodd-Frank would make the banking system safer> with vigor.
Its pages of e-mails, testimony, telephone transcripts and analysis show that traders in the bank’s chief investment office hid money-losing derivatives positions, if only temporarily; that risk limits created by the bank to protect itself were exceeded routinely; that risk models were changed to minimize losses; that bank executives misled investors and the public; and that regulations are only as good as the regulators enforcing them.
What can we do about it? For starters, we can make our voices heard.
The people in DC are supposed to work for us. A few like Bernie Sanders and Elizabeth Warren are demonstrating through word and deed that they do represent citizens first.
What’s corrupting the vast majority of politicians and our government is money. Big Money. Money that was, to be sure, always there, but money that is now exponentially larger and more dangerous because of the sheer amounts, the lack of transparency about its sources, and the influence it is having on lawmakers as a result of the Citizens United ruling by the Supreme Court.
As citizens, we are well within our rights – in fact, we have a duty – to call or write to your elected leaders to ask – and to demand, if we must – to know what their positions are on Citizens United. You can find your Senator here and your Representative here.
Here’s an even easier way.
Get involved in the movement to overturn Citizens United through Coffee Party USA. Join forces and pressure our elected officials to take a stand on Citizens United one way or the other. Every Senator and every Representative needs to be on record so voters in 2014 will know if the candidate represents our concerns as citizens or the concerns Big Money.
We need to vote for and support Senators and Representatives who want to break up the banks, not defend and deregulate them further. We can see where that leads. What we need are elected officials who will build up and build upon Dodd-Frank so that we have some sort of 21st century version of Glass-Steagall.
History really does repeat itself, doesn’t it? It happens exclusively because we refuse to study it and learn from it. Among the many excellent posts by John Cashon, the one titled “Franklin Roosevelt, an advocate for the people” is highly recommended as one that will help the reader to understand the similarities between the early 20th century and the early 21st century.
Unless and until our laws change, the people most responsible for tanking our economy five years ago and who are putting our economy at risk again are not going to change their behavior. And so long as politicians care more about raising incredible amounts of money – and feathering their nests for a post-electorate career in the private sector – than they do about representing us, the necessary laws have only a small chance of getting sponsored and passed.
Still, we cannot and should not give up or stay silent. As citizens, we must demand that government take a stronger and more active stance to protect us from a financial system whereby gains are privatized and losses are socialized.
The concerns about today’s financial services sector are not hyperbole conjured out of thin air. Wall Street and the free market have proven once again that they cannot be trusted to regulate themselves. The “invisible hand” really does require a strong and very visible counter-balancing force that comes only from government and only through regulation, oversight, legislation, and when necessary, significant punishment under the law.
The unregulated and unfettered capitalists who caused the financial collapse of 80 years ago knew no limits to their hubris. Their progeny seems not to have any today.
In borrowing the words of FDR, we should welcome their hatred for our desire to want to stop them from wrecking the economy over and over and over again. We should throw our full support behind those candidates who would equally embrace the “hatred” of Wall Street while they work to increase regulation and overturn Citizens United.