The next step will be to send the FDIC into the largest, “systemically dangerous”, financial institutions to shut them down. Fire all the top management plus any traders who have earned six figure bonuses in any of the past three years. Replace them with lowly paid middle management. We will need a new Jessie Jones (President Roosevelt’s selection to head the Reconstruction Finance Corporation that took over half of the nation’s banks in the Great Depression, successfully resolving most of them); my colleague, Bill Black (who helped to resolve the thrift crisis, standing up to Charles Keating, John McCain and the rest of the Keating 5), is the leading candidate. His task will be to downsize the financial sector, starting with the top two dozen or so banks—which will be broken into small pieces. Their former management and traders will be investigated for fraud, which will be found with a probability approaching certainty in all cases.
We will also need to round-up all the Goldman Sachs alum now working in government– shoveling favors to their former employer—for special treatment. Part of the President’s remaining stimulus funds can be devoted to building new prisons for them and the thousands of other financial market predators. The new penitentiaries ought to be sited in places like Modesto, California that are suffering the most from the real estate collapse, making use of foreclosed properties and providing jobs as prison guards to those who have been displaced. At their hands, poetic as well as Biblical justice could be visited on Wall Street’s finest.
The notion that these “highly skilled” whiz kids need huge bonuses to retain them is, as Keynes would remark “crazily improbable–the sort of thing which no man could believe who had not had his head fuddled with nonsense for years and years.” Your average Brooklyn plumber has more financial markets sense than all of these clowns combined. Their efforts were directed to another goal—running a kleptocracy that would make a Russian mobster blush. There is no evidence that they have learned anything from this debacle and unless they are removed, they will dig the financial black hole even deeper.
This is the real change we have been waiting for since Obama took office. The Obama elected by the American people has been AWOL since last November, with an evil twin occupying the White House and repaying Wall Street for its campaign contributions. However, America is still a democracy—one citizen, one vote—and Obama has got to realize that while the fat cats might have contributed most of the money, they did not provide many votes. It is time to boot the imposter and downsize Wall Street’s influence on Washington.
The electorate voted for change. I have the audacity of hope to believe that the real Obama is the one we saw this week. Send the fake back to Goldman’s.
Good one, and I second the nomination of Prof. Black. But you neglected two matters of importance:1. Pecora Commission. So far there has been no accountability, even though Wall Street and its tentacles have all the markings of a crime scene. This is as much a forensic issue as an economic one. All this won't necessarily come out in resolution.2. Put an end to cronyism and corruption. There will be no lasting change or meaningful reform unless legalized bribery in the form of campaign contributions and lobby is banned, and the revolving door between government and the private sector is shut and locked.
Tom: agreed on both points (and of course, the first one has been championed by Bill Black).Swift prosecutions and long jail terms (letting foreclosed homeowners serve as the jailers!) for Wall Streeters will probably do far more good than new regulations. At least one generation of financial predators will think twice before "innovating" again. LRWray
When I see Obama meeting with Volcker seriously then I will beleive something may be changing. Until then I have 0 hope.