The only reason Matt Taibbi is still alive, I am convinced, is because he is the quintessential Cassandra–constantly revealing systemic corruption on Wall Street and in DC, but nobody in authority ever moves to stop the colossal, criminal gravy train.
From Rolling Stone: “The Vampire Squid Strikes Again: The Mega Banks’ Most Devious Scam Yet.”
Most observers on the Hill thought the Financial Services Modernization Act of 1999 – also known as the Gramm-Leach-Bliley Act – was just the latest and boldest in a long line of deregulatory handouts to Wall Street that had begun in the Reagan years.
Wall Street had spent much of that era arguing that America’s banks needed to become bigger and badder, in order to compete globally with the German and Japanese-style financial giants, which were supposedly about to swallow up all the world’s banking business. So through legislative lackeys like red-faced Republican deregulatory enthusiast Phil Gramm, bank lobbyists were pushing a new law designed to wipe out 60-plus years of bedrock financial regulation. The key was repealing – or “modifying,” as bill proponents put it – the famed Glass-Steagall Act separating bankers and brokers, which had been passed in 1933 to prevent conflicts of interest within the finance sector that had led to the Great Depression. Now, commercial banks would be allowed to merge with investment banks and insurance companies, creating financial megafirms potentially far more powerful than had ever existed in America.
All of this was big enough news in itself. But it would take half a generation – till now, basically – to understand the most explosive part of the bill, which additionally legalized new forms of monopoly, allowing banks to merge with heavy industry. A tiny provision in the bill also permitted commercial banks to delve into any activity that is “complementary to a financial activity and does not pose a substantial risk to the safety or soundness of depository institutions or the financial system generally.”
Complementary to a financial activity. What the hell did that mean?
“From the perspective of the banks,” says Saule Omarova, a law professor at the University of North Carolina, “pretty much everything is considered complementary to a financial activity.”
Fifteen years later, in fact, it now looks like Wall Street and its lawyers took the term to be a synonym for ruthless campaigns of world domination. “Nobody knew the reach it would have into the real economy,” says Ohio Sen. Sherrod Brown. Now a leading voice on the Hill against the hidden provisions, Brown actually voted for Gramm-Leach-Bliley as a congressman, along with all but 72 other House members. “I bet even some of the people who were the bill’s advocates had no idea.”
The reality, also, is that the CIA uses the big banks to unfold the American Imperialists’ vision—to abuse power for the benefit of the world’s oligarchs, no matter what harm comes to the citizens of other countries or our own. Why get involved in overt wars when economic assault often accomplishes the same end, and killing people through engineered starvation is far less newsworthy than cluster bombs.
We must castrate and dismantle players like JPMorgan Chase and Goldman Sachs. We must cancel the charter of the Federal Reserve, which is little more than an arm of the foreign banking powers that own its stock, and pull its strings. We must end the cancer of fractional-reserve banking which grants far too much power and wealth to the most corrupt humans on earth.