Just Ask Jamie

Have no fear. While millions of Americans are struggling to survive day to day, and the economy is in the tank, the big banks are doing just fine.

Just ask Jamie Dimon, CEO of JPMorganChase. At JPMorgan’s investor conference yesterday, Dimon bragged to a crowd of uber wealthy investors that, “This bank is anti-fragile, we actually benefit from downturns.”

In other words, while millions of Americans are without jobs, and struggling to put food on the table and provide for their families, Dimon and his Wall Street fat cat buddies are doing just fine, profiting off of your misery.

But such an appalling statement really shouldn’t come as a shock. After all, numerous reports have suggested that JPMorganChase may have engaged in criminal activity, and it’s possible that Dimon did too.

Dimon and the rest of America’s big bank CEO’s need to be put in their place.  It’s inexcusable that these banks continue to rake in millions, after nearly destroying our economy and devastating the middle-class.  One way or another, the rampant corruption on Wall Street needs to stop.

That’s where Sen. Elizabeth Warren comes in.

Since Warren was sworn into the Senate less than two months ago, she’s been kicking butt and taking names.  Using her influential seat on the Senate Banking Committee, Warren has already rebuked the nation’s top financial regulators for failing to take Wall Street firms who broke the law to trial.

In a February 14^th hearing, Warren told regulators that, “We face some very special issues with big financial institutions. If they can break the law and drag in billions and billions in profits, and then turn around and settle — paying out of those profits — they don’t have much incentive to follow the law.”

Warren continued her assault on this nation’s corrupt financial industry yesterday, pressing Federal Reserve Chairman Ben Bernanke about the risks and fairness of having banks that are “too big to fail.” Warren asked Bernanke, “We’ve now understood this problem for nearly five years. So when are we going to get rid of ‘too big to fail?’”

Warren also asked whether the big banks should have to repay taxpayers the whopping $83 billion a year they get from what is essentially a government subsidy. Interestingly enough, this amount nearly matches the big banks’ annual profits, and without it, CEO’s like Jamie Dimon wouldn’t be able to get their cushy bonuses and windfall payouts.

While Warren’s efforts to point out the corruption and greed on Wall Street are great, she’s only one woman, and she alone can’t take down the big banks and successfully regulate them.  The entire system needs to be changed.

For too long now, we’ve been following the Bush Administration approach to dealing with the big banks, and that’s basically let them be, let their corruption go unchecked, and bail them out without any assurance that they’ll change their ways.

When the banks began to freeze and the economy began to crash, the Bush Administration had two choices. One was taking the route that FDR took.  FDR put the safety and well-being of the American people and homeowners first, and soon the economy began to improve and the banks bounced back, with regulations.  Unfortunately, the Bush Administration chose option two: Bailout the banks with 700 billion dollars in taxpayer money, let them get back on their feet and hope for the best. We all know how well that’s worked out.

It’s time to stop propping up the banks, and allowing the “too big to fail” mantra to go unchecked. 

One way to do that is by bringing back the Glass-Steagall Act. Glass-Steagall limited commercial bank securities activities and affiliations between commercial banks and securities firms.  It prohibited national banks from underwriting or distributing securities, and also prohibited them from purchasing or selling securities. We need to stop letting banks that dabble in securities gamble with people’s safe deposits, and their livelihoods.

But Glass-Steagall may not be enough.  It might be time to use the Sherman Act to break up the big banks, and put competition back into the financial industry.  The bigger banks get, the more money they control, and the more influence they are able to exert on the market and on the government. And, with more money in their corporate coffers, the big banks become more willing to gamble away your lifesavings.  With more banks on Main Street, the influence that big banks have would dissipate, and so too would the rampant corruption that’s destroyed our economy.

We can’t let the 2008 financial crisis happen again and we can’t continue to allow big bank crony CEO’s like Jamie Dimon to pad their wallets at the expensive of our livelihoods.  It’s time to regulate the banks, and make them the boring and safe industry that they used to before Ronnie Reagan came along.