Just when you thought Wall Street couldn't sink any lower - when its excesses are still causing hardship to millions of Americans and its myriad abuses of public trust have already spread a miasma of cynicism over the entire economic system - an even deeper level of public-be-damned greed and corruption is revealed.Read the rest here.
Sit down, and hold on to your chair.
Consider the most basic services banks provide you: You put your savings in a bank to hold in trust, and the bank agrees to pay you interest on it. Or, you borrow money from the bank and agree to pay the bank interest on the loan.
We trust that the banking system is setting interest rates based on its best guess about the future worth of the money. And we assume that guess is based, in turn, on the cumulative market predictions of lenders and borrowers all over the world (including central banks) about the future supply and demand for the dough.
But suppose our assumption is wrong. Suppose the bankers are manipulating the interest rate so they can place bets with the money you lend or repay them - bets that will pay off big for them because they have inside information on what the market is really predicting, which they're not sharing with you.
It must be a chilly day in the sulpherous pit because I actually agree with Robert Reich about something. I supported the repeal of Glass Steagall back in the 90's because it was anti-free market. I now accept that I was wrong. Institutions that are as big and powerful as the major banks have become are a threat to liberty and the financial security not just of the United States but quite possibly of the world. Glass Steagall needs to be reinstated and existing antitrust legislation needs to be strengthened to allow the Feds to break up any bank or other corporation that is "too big to fail."
The banks in particular have in just the last four years demonstrated an absolutely breathtaking disregard for the law, and have suffered almost no significant consequences. There has been a shocking parade of one bank related scandal after another. At some point one must conclude that we have a systemic problem when such institutions are permitted to operate with near impunity while thumbing their noses at the law.
Enough! Reinstate Glass Steagall and break up the mega banks.