Wall Street is the apex of legal gambling. It always has been.
It’s not called gambling, of course, but we should understand that that’s precisely what it is.
Perhaps the question for those of us living in a free market economy ruled by this astronomically lucrative gambling is, “Should we trust the gamblers to do anything except what benefits them the most?”
The answer seems clear to me. We cannot.
Gretchen Morgenson of the New York Times has hit the nail squarely yet again in The Problem With Wiggle Room in Securities.
“…the case against Javier Martin-Artajo and Julien Grout, two of the bank’s traders, has larger lessons for investors and regulators. One has to do with the risks inherent in opaque, over-the-counter markets, where securities’ prices can’t be seen and so can be easily manipulated. Another involves the fairly significant leeway that financial firms have in valuing the securities they trade and hold.”
Personally, I have a hard time feeling any empathy with or sympathy for either the speculative bankers or their large clients. If two parties agree to place bets on something, I’m ok with that. And while I have only contempt for people who obfuscate the truth in “the real world”, I’ve played enough poker to know before the cards are dealt that that’s part of the game.
But, we’re not playing poker here. The gambling on Wall Street affects all of us, especially when loses mount. It just seems that Wall Street continues to prove that they cannot be trusted, and our elected leaders seem to refuse to fight them on our behalf.
It’s stunning to realize the bankers’ defense in the London Whale case actually seems to be that they lied within the law. Officials at JP Morgan Chase – including Jamie Dimon – are apologetic and say, “…the bank has significantly ratcheted up its risk management.”
Does anyone else feel like the only reason this case is even being brought against these traders is because of who got hurt? Does it seem like it’s only when the rich and powerful get taken advantage of that it’s a sufficient enough crisis and scandal that people like Bernie Madoff get prosecuted and go to jail? Can anyone name another tycoon of Wall Street behind bars? (Hint: His name is among the tags on this post.)
For their part, JP Morgan “…and its executives have been deeply embarrassed by the trading fiasco and the internal failures of judgment it exposed. They have learned their lesson, they say.”
So, we’re to accept their apology and their proposed solution to basically go on trusting them to police themselves?
With all due respect, Mr. Dimon, I think you know what you can do with your apology. That goes for the rest of Wall Street, too.
People like Mr. Dimon and those operating in and controlling the financial services industry are out of control. They are maddeningly under-regulated, and we’re going to keep paying for their losses until radical and severe regulatory pressure is put on them and their industry. And, until more of them are investigated, prosecuted, stripped of their wealth, and sent to prison for a long, long, long time, nothing is likely to change all that much. (Let’s be real. It’s the wealth-stripping that will serve to really change their behavior.)
If all of this were only about bankers and their rich clients losing money, I dare say most of us wouldn’t take much notice. There’s a reason they’re referred to as the 1%.
The problem is that their bad bets get paid off with things like federal bailouts and tax policies that favor the wealthy and which serve to perpetrate the lie that is trickle-down economics. What’s needed is much stronger leadership in Washington; leadership who will actually stand up for us and against those on Wall Street who would privatize all the gains and socialize all the loses.
The way to do that starts with reforming how campaigns are financed. We need to stop the flood of big and dark money coming from the uber-wealthy and Wall Street. Our elected leaders are beholden to that money, and we have to change how they get elected if we want to change how they represent us.
How can we do this?
First, take 30 seconds to become a citizen co-sponsor of the American Anti-Corruption Act. You can get more details and sign on here.
Second, make your voice heard by your elected officials. Tell them you want to know what they’re going to do about Citizens United. Do that by joining and supporting Coffee Party USA and their 535 Campaign for fixing Citizens United here.