Let's Quit Sucking up to Wall Street!

Okay, I know that campaigns are expensive to run, that politicians running for office need money. I know that with the Supreme Court's Supremely Sucky decision on Citizens United vs. Federal Election Commission, huge amounts of Super Pac money are flowing into campaign coffers, and politicians hesitate to bite the golden hands that wave from the windows of Wall Street.  But, crap, will no one put country first and stand up for the millions of Americans who suffered and continue to suffer from the financial crisis of 2008?  Bill Clinton is praising the likes of Donald Trump and soft-soaping Wall Street, because, well, as Joan Walsh points out, Clinton's philanthropic enterprise depends upon deep pockets of the very rich. And I hear Republicans saying again and again that financial systems need LESS regulation--while again and again we learn more details of what inadequate regulation has done to us.

The latest reveal of the dirty tricks of finance? Top executives at Bank of America withheld from the bank's shareholders information that indicated how an acquisition of Merrill Lynch would negatively affect the organization:

Days before Bank of America shareholders approved the bank’s $50 billion purchase of Merrill Lynch in December 2008, top bank executives were advised that losses at the investment firm would most likely hammer the combined companies’ earnings in the years to come. But shareholders were not told about the looming losses...[snip]

....The bank’s purchase of Merrill, struck during the depths of the financial crisis, was the culmination of an acquisition binge by Mr. Lewis [CEO] that transformed Bank of America from its base in North Carolina into a financial behemoth that could compete head-to-head with the biggest institutions on Wall Street. 

But the transaction, which was ultimately encouraged by government officials who were concerned about the impact on the financial system of a foundering Merrill Lynch, also saddled the bank with billions in losses and required an additional $20 billion from taxpayers on top of an earlier bailout it received in 2008. [my emphasis] [from: Gretchen Morgenson, "Merrill Losses were Withheld before Bank of America Deal," The New York Times, 3 June 2012]

Jeffrey J. Brown, Bank of America's treasurer at the time, warned Joe L. Price, Bank of America's chief financial officer at the time, "that the failure to disclose [the extent of Merrill Lynch's losses to shareholders before the vote] 'could be a criminal offense, stating that he did not want to be ‘talking through a glass wall over a telephone’ if no disclosure was made.”["Merrill Losses were Withheld before Bank of America Deal"] Wow. How was Brown to know just how misplaced his fear of criminal charges was?  The SEC failed to prosecute those most responsible for the financial crisis--executives with Bank of America (which acquired Countrywide and Merrill Lynch), Goldman Sachs, Citigroup, etc., all those folks who continue to wield way too much power in this country.

In a blog post, Matt Taibbi, who has investigated and written extensively on the crimes of Wall Street, succinctly lists and describes those regulatory failures of the SEC: "SEC: Taking on Big Firms is 'Tempting,' but We Prefer Picking on Little Guys." Even when warned by insiders of massive fraud, the SEC failed to act. 

You can read Taibbi's article "How Wall Street Killed Financial Reform," on the Rolling Stone website, and you can sign up to join Matt Taibbi's "Thunderclap" here to add your tweet to the angry tweets of other citizens disgusted with how our government has let Wall Street get away with financial crimes and continue to use its influence to de-fang regulation meant to put the poison to malfeasance.

As Taibbi demonstrates in "How Wall Street Killed Financial Reform," the CEOs of those institutions, with their lawyers and their lobbyists, have way too much influence. Just look at what happened recently with J.P. Morgan. CEO Jamie Dimon and his aides were able to convince regulators to include loopholes in the regulatory laws passed after the financial crisis, laws that enabled J.P. Morgan to do the kind of risky trading that led to the bank's recent $2 billion loss. And don't count on shareholders to hold their executive officers responsible. Even after this latest crisis at J.P. Morgan (which had managed to escape damage in the 2008 financial meltdown), Jamie Dimon "survived a pair of key shareholder votes [on May 15th] on his pay and job responsibilities. [He] won an endorsement of his pay package, which was reportedly $23 million last year. He also can retain his second title as chair of the banking giant."

So don't believe anyone who says that Wall Street needs LESS regulation. Experience proves otherwise.