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Headline! Wall Street Gets Mind-Altering Substance into New York Times Water Cooler! What else can we think when we see the normally level-headed New York Times serving up bankster sympathy and false choices?
Take a peek at the Feb. 18 article on possible prosecution of the biggest banks. It seems positively drunk with disinformation. Up front they are selling us a false dilemma supposedly facing the Department of Justice, i.e., either the DOJ responds to bank malfeasance with the usual reprimands and fines which—gosh darn it—never seem to affect bank behavior, or they muster up the courage to prosecute bankers, perhaps getting actual indictments and convictions, loss of operating licenses, maybe a bank failure. Yikes, it could take down the whole economy!
So what is the article trying to say? First, that accepted wisdom is true: these banks really are too big to fail or jail. We are in fact so desperate to keep them on an even keel that we will always accept their corrupt, fraudulent behavior, even if our dentists scold us for grinding our teeth at night.
Secondly, the Times is offering us a juicy false choice. Either we go after the banks head-on and risk a market cataclysm featuring all of us selling pencils on street corners, or we belt up and let Jamie Dimon have his way with us.
No one wants to talk about reinstating the Glass-Steagall Act, of course. This would separate commercial and investment banking, so we might be able to jail an investment banker without taking down the entire economy.
The banks' response to this is predictable: eeeeek! Glass-Steagall means U.S. banks at a disadvantage in the global economy! Stifling market activity! Markets go into a tailspin!
The Simple Answer Dept. handles that one. First, all large banks are international in character now, and they pledge allegiance only to themselves. "U.S. banks" has almost no meaning. And second, all global banks are currently in such terrible straits that the G-20 should, for the banks' own good, decide that all of them should separate commercial and investment banking. A novel idea—restoring stability to the world economy.
Paul Moser is a former winemaker living in Napa County.Open Mic is a weekly op/ed feature in the Bohemian. We welcome your contribution. To have your topical essay of 350 words considered for publication, write openmic@bohemian.com.
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