So says the inimitable Derrick Jackson in this Boston Globe op ed carrying the same title as this posting. Perhaps you responded positively to the bi-partisan report of the Senate Permanent Subcommittee on Investigations co-chaired by Carl Levin that issued its "blistering" report last week, critical of the abuses of the banking industry? Well, let me jump ahead to Jackson's final paragraph:
The result is more rhetoric than actual reform. After two years of investigation, Levin said his staff “found a financial snakepit rife with greed.’’ But neither he nor the White House nor the regulators show any sign of jumping into the pit to kill the snakes.
In other words, more rhetoric and still no meaningful action.
Which should frustrate the hell out of anyone reading those final words of Jackson. Because not only dos it mean the administration - and the Democratic Senators on that subcommittee - are failing to seize a political issue with the potential to galvanize large numbers of voters in their favor, it also means they are failing to address something that is corrupting the entire governmental process.
Did I say corrupting? Did you read anything in or about that report calling for serious punishment for the myriad past wrongs cataloged in that report? Neither did I. Jackson explains why, because a majority of members of the committee - not including Levin but including his senator from Massachusetts Scott Brown -
have been among the top 20 senatorial recipients of securities- or banking-industry campaign contributions since 2008, according to the Center for Responsive Politics.
If you are not already outraged and disgusted, there is more.
Our President when newly inaugurated called the large earnings by the heads of the various financial organizations "the height of irresponsibility." Last year he called Jamie Dimon of JP Morgan Chase and Lloyd Blankfein of Goldman Sachs "savvy businessmen." They must be - as Jackson notes, they were among a group of CEOs whose compensation skyrocketed:
... up at least 39% were the CEOs of Goldman Sachs, Bank of New York Mellon, US Bancorp, Capital One Financial, BB&T, and MetLife
... Jamie Dimon went from $17.9 million in '09 to $20.8 million last year.
... Bank of America LOST $3.6 billion, in return for which its CEO was paid $10 million.
Or try a bank local to the readership of the Globe:
State Street Bank is getting an $885 million tax refund despite $1.6 billion in profits, two years after getting a $2 billion bailout and shedding 3,600 jobs since 2008.
As Jackson notes, the subcomittee's report was not the only news about such financial organizations released that day. There were also "enforcement actions" issued by the Comptroller of the Currency and the Federal Reserve. Why? Mortgage processors had rushed American families into foreclosure. "Enforcement actions" sounds tough, but as Jackson notes the companies agreed to consent decrees i which they neither admit guilt nor wrongdoing, despite the fact that the interagency review
found that those companies and other mortgage servicers engaged in “unsafe and unsound practices and violations of applicable federal and state laws.’’
And who were among the companies cited? JPMorgan Chase, Bank of America, MetLife, Citibank, PNC, HSBC, U.S. Bank and Wells Fargo. Note the first two, then look above at the examples of CEO compensation.
Let me touch on a point that Jackson does not. Despite an early career that included with the public interest and consumer rights organization Illinois Public Action, Obama's first Chief of Staff Rahm Emanuel also has strong ties to the financial industry. After serving in the Clinton administration and before running for Congress, her worked for the investment banking firm of Wasserstein Perella, rising to managing director of their Chicago office, and made $16.2 million in 2.5 years as a banker. Later in 2000 Clinton appointed him to the board of the Federal Home Loan Banking Corporation (Freddie Mac), a position that enabled him to earn at least another $320,000 including exercising stock options for later sales. One might say that Emanuel's position in the administration might have made Obama less likely to take a vigorous course of action or even ramp up the political rhetoric against the banking industry. Had we any doubts, we can then, as Jackson does note, focus on Emanuel's successor, Bill Daley, who in his final year at J.P Morgan, pulled down $8.7 million.
And let us not forget that the Secretary of the Treasury, Timothy Geithner, as head of the New York Federal Reserve Bank, was a major player in some of the decisions that made the financial crisis as bad as it was.
Let's put this together with other things. The extension of the Bush tax cuts for the wealthy enable these gentlemen at the top of the banking industry to continue to pay effective tax rates below those of many wage earners. Their industry still survives because we the taxpayers bailed them out. They and their organizations continue to make contributions to the federal elected officials with oversight and legislative authority over their industry - that by itself should bother us. It should also bother an administration which we put into power in the middle of an economic crisis they largely created. Oh, and if that is not enough, they continue to try to manipulate the political process through campaign spending that has been unleashed via Citizens United, they have not been forthcoming in renegotiating mortgages so that people can stay in their houses despite our giving them money for that purpose, they did not use the funds we provided to keep them solvent to loosen credit and stimulate the economy, and they are apparently successfully negotiating to avoid the very substantial penalties to which their previous actions and their participation in MERS should have exposed them.
The system is corrupt. It is not a stretch to apply the word "corrupt" to these men and their organizations. The term "snakepit" is colorful, but in my opinion insufficient. To be harmed by the snakes therein you have to step into the snakepit. What these institutions and their leaders did was create a black hole, into which ethics were sucked away, and the wealth of the nation came close to being destroyed. In return for which they think they were entitled to be bailed out by taxpayers, to pay bonuses to their top leaders despite the poor business judgment, shaky business ethics, and irresponsible financial decisions they demonstrated.
Something is rotten, and it is not in the state of Denmark.
If there are no meaningful consequences for what these corporations and their leaders did, what protection is there for the ordinary taxpayer, the ordinary homeowner? Where is government when it should be serving as a check upon the rapaciousness of such greedy institutions and individuals? Why are we not moving to reinstate Glass Steagall?
Why, when this administration will act with the full force of the law against ordinary people, will it not use the power at its disposal to break up the power accrued and misused by the likes of these firms?
Today is Patriots Day, the anniversary of Lexington and Concord, the beginning in 1775 of the American Revolution. It is also unfortunately the anniversary of Waco in 1993, and the Alfred P. Murrah Building in Oklahoma City in 1995. Today we have the Tea Party movement, which for all of its manipulation by powerful interests such as the brothers Koch, is fueled at least in part by the sense of many that their financial futures were put into jeopardy by the big banks. Much of their anger has been redirected on issues of race and culture, but remember that they were already anger. It does not matter that the original bailouts - TARP for example - occurred under the previous administration. The actions of this administration seem to fuel a continuation of that anger, in part because there is NOT visible action against the large financial institutions.
This should be a major political issue.
It is clearly a real financial issue.
And in my mind at least, it is a moral issue that should be confronted, not skirted.
What message do we give to those who in the future will take inordinate risks with other people's money, with our economic future?
How am I supposed to explain this to the young people seeking to learn how our government works?
What difference does it make to vote for a Democratic administration and Congress if there is no meaningful difference in the treatment of the powerful, perhaps because Democrats are also dependent upon the campaign largess of the financial sector?
it is Patriots Day. The threat now is not the British Army. It is something much closer to home.
Will our administration take any meaningful action at all?
Or is it already too late?
In which case, why in hell should we support them?