Back to Their Wicked, Wicked Ways
Our nation has been living through a financial and economic inferno for nearly two years. Yet today, even while the economic fires still burn in many places, we see “green shoots” cropping up, indicating that Wall Street’s largest players—yes, those mega-firms that in large part ignited the inferno and then doused themselves with billions in taxpayer dollars to keep from being consumed in the flames themselves—are going back to their wicked, wicked ways.
Unfortunately, memories are short on Wall Street. Driven by greed, not humility, Wall Street moves on quickly from crises, never really learning any lessons from them. And so it will be with this crisis. As the months and years pass, Wall Street will forget all about the lessons it learned from the current financial meltdown that nearly destroyed it and the nation, just as it has with so many past crises. How else to explain that less than 10 years after Wall Street pushed Congress to repeal the Great Depression laws put in place to protect banks and consumers, we are living through the worst financial collapse since the Great Depression and Citigroup’s fourth government bailout since 1907—a government/taxpayer rescue every 25 years?
Will the Congress, too, forget the scorched economic landscape when the fires cool and it moves to another crisis? For the banks on Main Street America, our fervent hope is that Chairman Barney Frank (D-Mass.) again invokes the name of Teddy Roosevelt as he did in his National Press Club speech and, like Roosevelt, becomes the 21st century “trust buster.” We hope the Senate takes heed also, and Congress takes action to “bust up” the financial clique of Wall Street banks, investment firms and insurance companies that became too big to fail, manage or regulate (and many would say they became too big to punish). For until the financial oligopoly that was created over the past 25 years is dealt with decisively, our nation will never again enjoy a free financial market; and taxpayers, consumers and investors alike who are not part of Wall Street’s favored few will remain victims of a system where government, not the free markets, will choose winners and losers.
ICBA urges Congress to end the too-big-to-fail policies that so burned and ravaged this nation and its taxpayers. ICBA urges Congress to undo the policies that allowed for the creation of a privileged class of financial firms that are larger and more powerful than the agencies that regulate them.
Many community banks have been consumed by the conflagration that Wall Street started. The managers of many Wall Street financial firms are now paying themselves millions in bonuses—thanks to taxpayers like you and me—and their investors are profiting as well, while dozens of community banks and their investors are being wiped out, losing their life’s savings, their livelihoods and, most tragically, their reputations.
So, will the Wall Street moguls with their newfound billions in taxpayer dollars and government support be able to induce a case of amnesia in Washington … again? The flames are not yet out, but already some on Wall Street are acting as if the last two years didn’t happen. Many on the “Street” are acting as if it was their skill and acumen that guided their firms through this financial forest fire—not the taxpayer.
But on Main Street we know the truth—the truth is that Wall Street greed started the fires and that we the people put them out with our tax dollars. Now the mega-firms want to come out of the charred forest and act as if nothing happened.
So, will the big continue to get bigger? Will the community banks be stuck again with the bill the next time? Will community banks continue to be punished for the fires ignited by unregulated financial firms and the subsidiaries of the large Wall Street firms and their accomplices?
Only Congress can prevent another all-consuming financial fire—and they can’t do that by ignoring the problem, or pretending that it doesn’t exist or that it will go away if they don’t identify those who sparked the fire and fanned the flames. We call on Congress: Please, do not allow this nation to be burned again. Focus on the arsonists and leave those who respected the financial landscape to continue to do their business.
We also say please don’t cripple the community banking industry with staggering new restrictions and regulatory burdens. Community banks are the backbone of the financial services industry. Our nation’s financial system, with its distinctive mix of state and national banks of all types and sizes, is unique and fits our cultural heritage. Nurture it, don’t punish it. Having institutions that are deemed too-big-to-fail represents the greatest single threat to the American free market, consumers and taxpayers alike. We urge Congress to end too-big-to-fail once and for all. Do not let Citigroup and its kind come back for a fifth bailout because they have lapsed back into their wicked, wicked ways. Because next time, the elite financial oligopoly could start a fire from which our nation might never recover.