Time To Break Up the Banks

Way past time, of course.  The gigantic banks that have played such a major role in destroying our economy should have never been allowed to come into existence at all.  Here's part of an excellent column by Dean Baker on the subject:

"In the last few years, plans for breaking up the big banks have gained support from both ends of the political spectrum. Unfortunately, the more centrist figures in both political parties continually stand in the way. This is a clear case where the ability of banks to buy politicians is obstructing the will of the American people.

The basic point is straightforward. The large banks enjoy a massive taxpayer subsidy in the form of implicit insurance. Creditors believe that the government will bail them out if the banks get themselves in trouble, as was the case in the financial crisis. Because of this government guarantee, investors are willing to lend money to J.P. Morgan and Goldman Sachs at lower interest rates than they would demand from a smaller bank.

Bloomberg News estimated the size of this subsidy as $83 billion a year. To put this in perspective, the whole food stamp program costs $76 billion. That means taxpayers give more money to the big Wall Street banks each year than to the tens of millions of people getting food stamps."

And as Baker points out:

"The mega-banks that dominate finance are actually a relatively new creation. The merger wave of the last quarter century has resulted in banks that are more than five times as large relative to the size of the economy as the biggest banks were in the 1980s."

Let's see...25 years ago...that would be in the late eighties- right in the middle of the Reagan-Bush I presidencies.  And what happened then to set this disastrous change in motion?  That was the heyday of what I have repeatedly referred to as the greatest fraud ever perpetrated on the American public: deregulation.

Deregulation, one of the most sacred shibboleths of all Conservative/Republican dogma, in reality consisted in taking laws that protected the American people from the ravages of out of control capitalism, and doing away with them.  What did we get as a result?  We got two massive cycles of artificial boom and bust in real estate, a nearly disfunctional medical care system which replaced patient care with the goal of making a few hundred people as rich as possible, and a mini-depression, only moderated by a Democratic takeover of the government.

Now, protecting Wall Street speculators becomes more important than Social Security, Medical Care, even the basic needs for survival of the working poor.

I want to state the obvious:  The people who control our financial sector today are nothing but career criminals.  And like any other criminals, they are not going to stop until they are severely punished.  I believe that a first step would be to put about 20,000 of them in prison for long terms.  I am not kidding about this number.  Until these parasitic vampires are too afraid to drain the substance out of our economy, they are not going to stop.  And the price of their wealth will continue to be the impoverishment of all the rest of us.