A few weeks ago, Senator Elizabeth Warren voiced the concern that the banks are too big to trial. Here is US Attorney General Eric Holder giving a resounding confirmation.
This is depressing. The top law enforcement officer of the most powerful country on earth admits that the banks that brought chaos into the world with their financial shenanigans are are too big to prosecute. It would hurt the national economy, or even the world economy. That old excuse.
So how would Too Big to Trial hurt the economy?
I don’t know. Mr Holder doesn’t tell us. In fact, whenever this bogeyman is trotted out, no one ever goes beyond this, to explain just how and why prosecuting the banks would be such a disaster, that it’s better not to do it.
What will happen? Stock market plummet, along with investor confidence? Happened before, gazillions of times in the past, and will happen again gazillions of times in the future. Confidence is at a low anyway. Has been for the past five years.So how would prosecuting the banks make it worse?
A run on the banks? People trying to take their money out? I might have been convinced a few years ago, but I’m not so sure now. I think many people with ordinary bank deposits would be quite relieved that legal action has finally been taken. And how many of these institutions hold deposits for the man in the street?
Break up the banks
But even if it is true – that we are now in a Brave New World, where the banks are not only too big to fail, but also too big to trial – even if it is true, you know what you have to do Mr Holder. Break them up. It was done in the 1930s with Glass Steagall and it can be done again.
Standard Oil got too big for its boots and it was broken up too. Standard Oil was also hugely powerful. At one time, it controlled well over 90% of the world’s oil supplies, before the black commodity was discovered in Russia. Breaking it up didn’t hurt the world’s economy. In fact it actually made John D Rockefeller even richer than he was already.
The British East India Company was arguably the most powerful corporation in history – what other corporation has had its own private army? When it bungled in the 1857 mutiny, it had its powers curtailed, and the British government took over the running of India
All these companies had their own lobbyists – but it didn’t stop the Government of the day, in spite of attempts to bribe relevant officials
So why can’t the current US administration pull itself up by its bootstraps and just do what’s needed? Obama isn’t running for election again, so what has he got to lose?