Sunday, January 9, 2011

What Do Bankers Wants?

Simon Johnson is the co-author of 13 Bankers, out in paperback on Monday.

As are many people, Simon Johnson is concerned with the newly appointed Bill Delay given free and unlimited access to President Obama's right ear. The disappointment is in the inevitability of the numbers--- of the large number of people who will continue to fall deeper into depression or debt, confusion or anger because of the continued concern over officials providing an arena for bankers, in particular, to sustain and increase their profits. It would be a good idea to increase the power of Elizabeth Warren instead.  Freud wondered what women want.  We might get further in understanding how our modern world functions by analyzing what bankers want instead. Of course, once we find out, then what? Then we know. If it turns out banks do rule America, and Bill Daley has come to ensure their ownership of the country, we have to ask ourselves if we support his task and that ownership.  What comes after that answer? I'm sure the list of answers is long. But having an answer is a start to take an active role in the world we help create every day from the time we get up till the time we get up again the next day and so on.  And taking an active role in helping to design one's own community as well as one's own country is a responsibility that everyone capable should participate in, in the 21st century, don't you think? 

In his article "The Bill Daley Problem" Simon Johnson writes:

Bill Daley, President Obama's newly appointed chief of staff, is an experienced business executive. By all accounts, he is decisive, well-organized, and a skilled negotiator. His appointment, combined with other elements of the White House reshuffle, provides insight into how the president understands our economy -- and what is likely to happen over the next couple of years. This is a serious problem.

This is not a critique from the left or from the right. The Bill Daley Problem is completely bipartisan -- it shows us the White House fails to understand that, at the heart of our economy, we have a huge time bomb.

Until this week, Bill Daley was on the top operating committee at JP Morgan Chase. His bank -- along with the other largest U.S. banks -- have far too little equity and far too much debt relative to that thin level of equity; this makes them highly dangerous from a social point of view. These banks have captured the hearts and minds of top regulators and most of the political class (across the spectrum), most recently with completely specious arguments about why banks cannot be compelled to operate more safely. Top bankers, like Mr. Daley's former colleagues, are intent of becoming more global -- despite the fact that (or perhaps because) we cannot handle the failure of massive global banks.

The system that led to the crisis of 2008, and the recession that has so severely damaged so many Americans, encouraged excessive risk-taking by major private sector financial institutions and, yes, Fannie Mae, Freddie Mac, and other Government Sponsored Enterprises (although these were most definitely not the major drivers of the crisis).

See the link for the entire article.