Banks Too Big to Fail? Break ’Em Up
The Madison-based Center for Media and Democracy recently gave its first-ever "Golden Throne Award" to the president and CEO of the American Bankers Association, Edward Yingling.
Suffice it to say that Yingling wasn't thrilled.
The Golden Throne, you see, is more like a that-really-takes-a-lot-of-chutzpah award - as in the big bankers nearly bankrupting the American economy and now spending big bucks lobbying to convince Congress that it shouldn't enact tighter regulation. The award is named in honor of the gold toilet that former Merrill Lynch Chairman John Thain had installed in his office while spending $1.2 million remodeling it when his company was going broke.
It was a year ago this month that Merrill Lynch, AIG and Lehman Brothers all tanked, exposing the house of cards that the nation's financial giants had constructed during the past several years. Lehman went out of business, Bank of America bought Merrill (with the government's help), and AIG was propped up with tens of billions in taxpayer loans.
In the aftermath, Yingling and the other big banking industry lobbyists have been fighting everything from attempts to protect consumers from credit card abuse to reforming the way bankers pay their top executives.
As U.S. Sen. Bernie Sanders said at Fighting Bob Fest earlier this month, "These guys have absolutely no shame."
Not one of them has ever apologized for the financial mess they created, causing hardships for people on pensions and throwing millions of Americans out of work. If there were any justice, the Vermont senator added, several of these people would be serving time in jail because what they did was nothing short of theft.
After being rescued by the federal government, they now want the government to keep its nose out of their business - as if we can ever trust these guys again.
The chutzpah of the financial giants is endless. After giving bonuses to employees to sell risky mortgages and then slicing and dicing them into incomprehensible derivatives that fed the financial meltdown, they now - according to the Wall Street Journal - are devising similar instruments to buy life insurance policies from individuals and package them for sale.
Particularly galling is the banking association's opposition to reforming the Pell Grant program, which provides financial assistance to needy college kids. With backing from the Republicans in Congress, the banks have had a cool deal for themselves. The feds provided private banks with capital and then paid them a subsidy to lend that capital to the students. Plus, the government guaranteed the loans so banks don't have any risk.
The program has been worth about $8 billion to the banks every year. There would be hell to pay if poor people received such largesse.
Congress is now finally getting around to having the government make the loans directly to the students, saving about $87 billion over 10 years. That money can be used to help more students get help to attend college. The banking giants, with Ed Yingling leading the way, don't like that.
As Sanders said, "We were told we had to bail these guys out because they were too big to fail. Well, if they're too big to fail, then they're too big to exist. I say break them up."
That, indeed, would be the thing to do.
© 2009 The Capital Times