In his first six years in office, President Obama has performed well for those who wrote those checks. He brought in Wall Street insiders such as Timothy Geithner and Larry Summers to concoct his economic policy, which brought a recovery to the financial plutocracy before virtually anyone else. Wall Street was back by 2009; the rest of us have had to wait for 2015. Obama and the Democrats in Congress also handed the big banks a nice gift in the form of the Dodd-Frank Bill which helped them achieve that “too big to fail” status and has accelerated the growing consolidation of the American financial system. Indeed, since Dodd-Frank was passed smaller banks’ share of banking assets has dropped twice as quickly as before, notes a recent Harvard Kennedy School of Government study. Smaller and community banks – historically more likely to loan to small businesses – have seen a 50 percent drop in their share of lending while the the five largest banks now control over 40 percent of lending, twice their share 20 years ago.
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Samizdata quote of the dayJohnathan Pearce (London) · Economics, Business & Globalization · North American affairs · Slogans & Quotations March 2nd, 2015 |
 5 comments to Samizdata quote of the day |
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Actually no one liked “Dodd-Frank” – it is an abortion of an Act.
The idea that because it is terrible for smaller banks it must be a plot by the big ones, is not correct.
As for the Keynesian policy of the Federal Reserve.
It has been very useful for Barack Obama – it enabled him to be re elected and continue his “Cloward and Piven” policy of getting the maximum number of people dependent on government as possible.
And it has enabled Mr Obama to laugh behind his hand as fools talk about “Plutocracy”.
When the credit bubble international economy collapses – fools (and worse) will blame “the rich” and “the corporations”.
Just as Mr Obama (and his Comrades) intend.
No doubt many of you would have seen this at Cobden Centre:
“We are all at a wonderful ball where the champagne sparkles in every glass and soft laughter falls upon the summer air. We know, by the rules, that at some moment the Black Horsemen will come shattering through the great terrace doors, wreaking vengeance and scattering the survivors. Those who leave early are saved, but the ball is so splendid no-one wants to leave while there is still time, so that everyone keeps asking, “What time is it ? What time is it ?” But none of the clocks have any hands.”
– From ‘Supermoney’ by Adam Smith
It’s just a matter of when.
SO there a nice Jimmy Stuart movie about a small “socialist” savings and loan org vs. Those big banks that Republicans are accused of “endorsing”….
Of course it was a movie, at a time when “Hollywood” was going through some tough “membership” issues, and was busy establishing why “the arts” should be tax free…
I would have thought the benefactors of Dodd-Frank (and it’s European cousin EMIR) would be exchanges, not banks, having ensured the demise of the OTC market. Obviously this would price out smaller financial institutions as the operating costs would be more, but that affects the big banks as well, at the end of the day it is just more regulation that no-one wins.
What the big banks have failed to understand is that “too big to fail” is always offset by “never too big to be controlled by government”. But why should the bank execs worry? Their bonuses are assured.