Friday, May 11, 2012
Congressional Letter re Finance
I sent the following to my two Colorado Senators:
Please support Sen. Sherrod Brown's SAFE Banking Act of 2012 to rein in "too big to fail" banks. JP Morgan's $2 billion loss announced yesterday shows how seriously out of control our banking industry is, only a few years after the 2008 Lehman debacle. Although JP Morgan claims that its "hedging" was not in violation of the Volker rule, I think that it likely was. JP Morgan was just gambling with its depositors' money, trying to make a quick buck, which was almost riskless, because the US taxpayers are still guaranteeing the assets of the "too big to fail" banks.
Simon Johnson of MIT and the IMF has called for Jamie Dimon to resign.
You are just throwing away America's money guaranteeing the foolish bets of fat cats on Wall Street. I can't tell you how disappointed I am that President Obama threw Elizabeth Warren under the bus after all she did to establish the Consumer Financial Protection Bureau. She was the only one in Washington speaking out for the middle class, and now she is gone.
I don't have much hope. The US Congress is largely dysfunctional. We have no fiscal policy. Ben Bernanke has so far saved us from disaster with monetary policy, but he can't singlehandedly save the world. You could give him a little help.
Two of the most important additional things the Congress could do are
-- Put the Bowles-Simpson proposals back on the table to address our financial crisis. They were reasonable; they addressed the most important issue facing the US, and they have been ignored by the Congress.
-- Reinstate the Glass-Steagall Act. The repeal of Glass-Steagall, led in Congress by Republican Phil Gramm and signed by President Bill Clinton, was responsible for the financial crash of 2008 and the current rogue activities of the big banks. Banks should be banks, not gambling casinos.