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Break up the big banks We all know what happened four years ago, when it became
A powerful voice silenced JGermany on July 20. He was 71. He was born in Scotland, grew up in Ireland but settled in Petrolia, Calif. His
ournalist Alexander Cockburn died of cancer in
father, novelist Claud Cockburn, penned the novel Beat the Devil, which was made into a movie starring Humphrey Bogart. Alex adopted the title for his column in The Nation. I met him when I was assigned to cart him around before his lecture at Chico State in the early ’90s. Alioune Fame, then-director of the Chico Peace and Justice Center, had brought him here. Cockburn said the center, then located at Seventh and Flume streets, was the biggest by “P&J” building he’d ever visited. He’d Tom Haithcock seen a few, tucked into the corners of communities he’d visit in support of antiThe author is a war efforts and environmentalism. Fame, former coordinator of by the way, is mentioned in Cockburn’s the Chico Peace & book, The Golden Age Is in Us. Justice Center and Cockburn graduated from Oxford but former executive never studied journalism. Still, he’ll be director of the Chico Creek Nature Center. remembered as one of the most knowledgeable and uncompromising writers He’s also a local musician. and critics in that profession. He was a columnist for The Nation, edited Counterpunch with Jeffrey St. Clair, wrote for The Village Voice and The Wall Street Journal, and authored several books. He also wrote for the Anderson Valley Advertiser, out of Boonville. Former Edi4 CN&R August 9, 2012
tor Bruce Anderson’s recent appreciation notes that Cockburn wrote perfect first drafts, and quickly. His caustic wit set him apart from other political writers. Though to some he embodied the quintessential left, he skewered players from across the political spectrum with an illuminating disdain for hypocrisy, corruption and greed. His jousts with writer Christopher Hitchens and others were well known, but the challenges he offered rivals led to a greater understanding of the issues for the reader. I last saw Cockburn on C-Span with Brian Lamb. For more than two hours he eloquently responded to questions from the host and callers, some of whom unjustly attacked him as an anti-Semite. He quieted them with reasoning that undermined the premise of their accusations. He never sugarcoated his views on the Israeli government’s treatment of Palestinians, but that does not an anti-Semite make. One Chico activist said to me she felt like she’d lost a friend even though she didn’t know Cockburn. She isn’t alone. “He brought clarity,” writes Anderson. Indeed he did. Here’s to you, Alex! I think I’ll hold onto my dusty Nation magazines a little longer now in case I need a laugh or a lesson from you. Ω
painfully obvious that America’s largest banks and investment firms had indulged in an orgy of wild betting on sliced-and-diced unsecured subprime mortgages and, suddenly leveraged beyond any ability to cover their losses, were on the verge of collapse. Because these financial behemoths were “too big to fail” without taking the rest of the economy down with them—with consequences too dire even to imagine—taxpayers had to bail them out. With that, the United States entered its worst recession since the Great Depression. More than 8 million people lost their jobs, the housing market crashed and burned, millions lost their homes to foreclosure, other homeowners lost as much as 40 percent of their equity, tax-starved states began to shred the social safety net and cut spending to the bone, and unemployment soared. There was a lot of angry talk about coming down hard on the banks, but by the time the Dodd-Frank reform bill got through Congress, past the army of deep-pocketed Wall Street lobbyists working to derail it, it had been diluted down significantly, and the banks happily went back to their old, corrupt ways. This July, for example, we discovered that the global bank HSBC has been used by Mexican drug cartels to get cash back into the United States, by Saudi Arabian banks with terrorist ties needing access to dollars, and by Iranians seeking to circumvent UN sanctions. Then, in July, we learned of the Libor scandal, in which officials at Barclays and, allegedly, other banks including JPMorgan Chase, Bank of America and Citigroup were colluding to manipulate interest rates and then betting against them—the ultimate in insider trading, in this case involving trillions of customers’ dollars. Later that month, the Los Angeles Times reported that the California Independent System Operator, a state-managed nonprofit that runs 80 percent of the state’s electrical transmission system, had charged JPMorgan Chase with illegally gaming the California energy market for its own profit and at a cost to consumers of at least $100 million and perhaps $200 million or more. This is the same JPMorgan Chase that in May was reported to have lost as much as $6 billion of customers’ money making bad bets on credit derivatives. Since then, the bank has lost another $20 billion in shareholder value as its stock price has plummeted. What (or who) will it take to convince Congress that Wall Street desperately needs reform, even restructuring? How about Sandy Weill, the man who pretty much created the “too big to fail” phenomenon? It was Weill, then head of Citibank, who was behind its merger with Travelers and Salomon Brothers to create Citigroup, the first great TBTF outfit—and one that ended up taking $45 billion in TARP money. It was the Citigroup merger, remember, that pushed Congress into abolishing Glass-Steagall, the 1933 bill prohibiting commercial banks (like Citibank) from acting like investment banks (like Salomon Brothers) and using customers’ savings to engage in the kind of high-risk betting that led to Wall Street’s crash. Now Weill is calling for TBTF banks to be broken up. “I’m suggesting,” he said during a recent live interview on CNBC, “that they be broken up so that the taxpayer will never be at risk. … What we should probably do is split up investment banking from banking.” It was a shocking comment, given the source, but it was exactly what reformers, including Rep. Barney Frank, co-author of Dodd-Frank, have been saying for years: Banks should not be able to make risky bets with customers’ savings funds, and no bank should be too big to fail. If Sandy Weill, of all people, understands this, Congress should as well. Ω
“What (or who) will it take to convince Congress that Wall Street desperately needs reform, even restructuring?”