Les Leopold argues that the top six US banks are too powerful to be regulated, because they' control the economy, the political establishment, and the judicial system. The only solution, he says, is to turn the banking system into public utilities such as state banks run by salaried public servants. North Dakota has a state bank that works.
...too-big-to-fail banks are the predators and we are the prey.
In 1994 the assets of the top six U.S. banks were the equivalent of 17 percent of our economy. By 2009, after the crash and bailouts, the top six assets jumped to a whopping 63 percent of the economy. By March 2010, the top six banks (Bank of America, JP Morgan Chase, CitiGroup, Well Fargo, Goldman Sachs, and Morgan Stanley) held $9.2 trillion in assets.
Given their size, there is no way we can allow these banks to fail – ever. Given their size, there is no way the political establishment can resist their lobbying and campaign donations. Given their size, there is no way our judicial system can control the racketeering.
Look around and you’ll see the wreckage of big private banking wherever you look. The unemployed, the empty houses, the struggling families who are underwater, the collapsing state and local budgets -- all of that was caused by our banking system run amok.
The simple truth is our giant banking system is metastasizing throughout our economy. It’s sucking away our wealth, and it’s out of control. No bank CEO can effectively manage the empires they now preside over. No regulator can keep up with the financial games that are played right under their noses. It’s just not possible. Too-big-to-fail also means too-big-to-control.
I think it’s very realistic to begin thinking real hard about what we’ll demand the next time the system crashes…and it will. Are we going to accept, yet again, that the big banks get bailed out and then remain in private hands? Or will we have a rational plan for turning them into public utilities?
Just think about what the current system is doing: We lure our best and brightest into finance because they can literally make millions of dollars per HOUR. And in order to do so, they create enormous hazards for our economy. If someone from another planet looked our way, they would surely ask: “Why do you deploy some of the best talent on Earth to destroy yourselves?” [emphasis mine]
I've been thinking of switching my checking account out of Wells Fargo for a long time, but I don't know where to switch it to. I have two accounts at One West Bank, but I don't like their online Bill Pay set-up, so I've been dragging my feet. I've qlso been looking for a credit union that will accept retired people no matter who they worked for in the past...no luck there so far.
It would be interesting to see if something like an All Atheists Bank would work.
Robert A. Heinlein's very first novel, For Us the Living (wasn't published till after his death), describes a very interesting financial system, but the Greedy Old Plutocrats would never hold still for it.
(You can find paperback copies at reasonable prices at Half.com. As a novel, it's not very good...the dialog is preachy and awkward, but you can ignore that, and remember that it was written in 1938 or so, while the Depression was still affecting everything. At that time Heinlein was very much involved in California politics, and was a strong supporter of Sinclair Lewis when he ran for Gov. ...and lost.)