It’s a fact. All that banking deregulation that went on for close to thrity years did not work. Alan Greenspan even agreed but, does his opinion matter much anymore? The Chicago School of economic thought, after the Keynesians either retired or died off, pushed their interpretation through schools and their idea of the ‘dismal science’ reigned. The Glass-Steagall Act was finally, once and for, repealed by President Clinton 1999 and within a decade, the banking system of the USA collapsed. We might as well throw in the same ideology of the Bush administration. They did not even enforce the few regulations that were left: just think of Bernie Madoff, Enron, derivatives, the housing bubble, etc. Now, this wonderful nation has been Graced by politicians claiming that instituting new regulation would hurt the economy. Many of them are the same geniuses that voted for repealing Glass-Steagall; John McCain said the “fundamentals of the economy are sound” and a few hours later, Lehman Brothers collapsed. If you ask me, some members of Congress shouldn’t even be allowed to vote this time around. Fool me once, shame on you. Fool me twice?

Are there new securities that did not exist in 1999? New banking gargantuans that did not exist prior to the repeal of Glass-Steagall? In other words, things have changed and regulation needs to change with it. When dealing with an industry that deals in billions of dollars and somebanks have $2 trillion in assets: greed, fraud, and theft should run rampant no? Human nature being what it is……

Some of the Chicago school ideologues think that markets are ‘rational’ and that ‘self policing’ actually works. I am sure these are the same people that think Elvis is still alive and President Obama is a secret Muslim. Ford Motor posts $2 billion profit for the first quarter of 2010 and their stock price drops. JP Morgan Chase, the best managed banking institution in the USA, posts a $3.3 billion profit for the first 3 months of 2010 and their stock price drops below the price prior to the announcement. Yeah, real ‘rational’!

One thing I thing I have not heard anyone mention as a solution for all of this is education. Why haven’t I heard that? Simple: deregulation of the media. It’s a federal crime for Rupert Murdoch to lie in his letter to shareholders in the annual report but, his news agencies can lie trough their teeth and make up any idiocy. So, when Fox interviews someone on TV about the economy, they bring in a right wing ideologue to give the party line. Does Anne Coulter know anything about the national economy? She’s good at ‘making money’ though: long legs, blonde hair, and leather pants works for her I guess. Glenn Beck is still telling people to buy gold even after a 4500 point stock market rally (100% in gold over the last decade or $1.01 to $14.52 in Ford over the past 18 months. Which do you want? Hint, do the math). Liberals, ahem, progressives, aren’t much better. When talking about oil drilling off the eastern seaboard, MSNBC interviews someone from The Sierra Club. I learned any time oil is drilled, evertything is bad always. Either way you have it, they will tell you biased, ideological, opinionated chickenshit. Why not ask, say a professor of economics? Be careful there as they tend to be the nay saying, doomsday types. Maybe a professor of environmental studies? Why not have them? Simple reason really: they’re not good for sound bites and thus the TV stations will have a challenge selling commercial time. Craziness sells.

Who was it who said “there are more banks than bankers”? That’s part of the problem. Today you have enormous banking enterprises such as JP Morgan Chase and Citigroup that have their hand in every aspect of banking: investment, commercial, retail, mortgages, asset management, card services, etc. If one large segment of the bank goes down, say, the investment bank, that can pull the rest down like the suction in ‘Titanic’ –I did not cry during the film. Sorry for being so cold and insensitive, ladies. To run an operation like that, there has to be new regulation. You also have to train bankers to juggle all of such fields which won’t happen. Maybe do something in management along the lines of Proctor & Gamble. Their highest managers ran Tide, Charmin, Crest, Cascade, Joy, etc. over the years and when they get to the top, they ‘know’ their company. Could you see the banks doing that? I doubt it. If a person is a young hotshot in investment banking at Citigroup, they’re not going to move that person to a branch office of the retail bank in Queens in 2 years. Could you really blame them? “I make you $100 million and you’re sending me out to a branch office in Sunnyside? Screw you buddy; I’m off to Goldman”. What does it mean? Unless there’s some new regulations passed into law and more education/training, coupled with the short collective memory of Americans, and human nature, there will be another financial mess at some point within the next 20 years.