Jaisal Noor of the Real News Network interviews Dr. William R. Black, the author of The Best Way to Rob a Bank is to Own One, and an associate professor of economics and law at the University of Missouri-Kansas City.
And these top regulators share one, very odd characteristic:
They’re all Republicans!
NOOR: So, Bill, what do you have for us this week?
BLACK: Well, some possible good news. There was just a big hearing in front of this massive House Financial Services Committee, which is up to almost 80 members. And the reason it is is because both parties now stick members of their party that are going to be in tough races on the committee because you’re guaranteed to get so many political contributions from the big banks. Well, that’s the bad news.
The good news is that they had witnesses who had an unusual degree of agreement on the fact that things are screwed up and need to be fixed and how to fix them.
And so the big three were Sheila Bair, former chairman of the Federal Deposit Insurance Corporation and the strongest of the regulators under the Bush administration, and continued under the Obama administration for a time; Tom Hoenig, the former head of the Federal Reserve Bank of Kansas City, a real gruff guy who is now the vice-chairman of the Federal Deposit Insurance Corporation. To give you an idea, when he was with a small group of us in Kansas City, he announced that every four years we hold an auction in which we auction off the secretary of Treasury to Wall Street, and that of late Goldman Sachs has always been winning the auctions. So that gives you some idea of his view of the largest banks. And the other one was president Fisher of the Federal Reserve Bank of Dallas, which is also interesting, because in recent times he’s been exceptionally conservative on most issues, but on two issues he’s now said, one, that too-big-to-fail has to end, we’ve got to get rid of the concept that there are these banks that are just too massive to deal with, and in this hearing he has just testified in favor of the return of Glass-Steagall. …
But now you have three very prominent conservative–I think all three of them are Republicans–experts saying we need to bring back Glass-Steagall. And they’re also saying, all three of them, that we need to get rid of too-big-to-fail. And we have a bill in the House that has over 60 cosponsors. Well, the House has, you know, hundreds of members, so that is hardly enough, but that’s a significant thing in terms of cosponsors. It’s the first time we’ve had any real momentum to do something serious about the problems of too-big-to-fail and the problems of the conflict of interest. So, as I said, we actually have some potential good news.
Lambert here: Well, I don’t know if zapping TBTF and reinstating Glass-Steagall would be enough, at this point, especially given that the environment in which the banksters have created for themselves and all of us is, as Jeffrey Sachs points out, “morally pathological”.
Basically — and I freely admit I don’t see how to do this politically — I don’t see why we can’t have Post Office banks in this country (and let the 1% blow their own money playing the ponies and scamming each other, if that’s what they want to do). The bricks and mortar is already in place — of course, we should open up all the post offices that were closed in the rural areas — and so is a capability to handle money. As a side benefit, any citizen could bank at the Post Office, so all the debanked get the services they should have, and check cashing joints couldn’t prey on them. And while we’re at it, put up municipal wifi towers on the Post Office roofs so that every service area gets covered, so you blanket the whole country with free Internet.
Of course, a lot of people might be uncomfortable with this idea because of the whole United Stasi of America thing we keep hearing about, but that’s going to have to be dealt with anyhow. Besides, given the choice between living in the woods with cash or gold bullion, handing your money over thieves to use against you, and the Post Office, which is worse? Of course, Google and FedEx will hate this idea, but that’s not a bug. It’s a feature. Also too Lloyd, Mike, and Jamie, but who cares what they think? They should be in jail.