In 1649, King Charles I placed his head on a chopping block in London and
had it removed in one clean stroke of a broadaxe.
Charles had made the mistake of becoming too big of a pain in the neck for
his subjects (pun intended). In addition to demanding more revenues from
Parliament under the notion that he was divinely ordained, he also
inflicted immense suffering on his people by embarking on two civil wars;
not to mention a great deal of religious meddling at a time when that
resulted in rivers of blood.
In the hubris of kings, he thought of himself as being too big to be
allowed to fail.
But during the second English Civil War, King Charles was captured and
tried for high treason. His execution sent a bad case of the shivvers
through the royalty of Europe; presumably they felt a curious itch around
their own collars.
Maybe its a stretch, but couldnt this lesson from history be instructive
in our own troubles with the bankers who play the role of kings on Wall
Last week, President Obama made the point that 2008s bailout of $787
billion for our biggest banks was necessary because it kept our country
from being plunged into another Great Depression. Who knows how many
people would be unemployed now if the government hadnt taken that
politically unpopular step.
As it is, the disaster visited upon us by the irresponsible lending
practices of Americas biggest banks has been cited as being responsible
for the loss of 8.4 million jobs.
Perhaps that‘s not high treason, but it seems close enough for Congress
to start fetching some kind of axe.
President Obamas remarks came on the heels of a bombshell story in the
New York Times which revealed that Goldman Sachs, JP Morgan Chase and
other banks had concealed their reckless loans to Greece, allowing that
rickety, antique country to borrow far beyond its means with no
conceivable way of paying back investors.
Now, those bad deals are coming back to haunt America because theyve
undermined Europes currency: the euro. When the value of the euro goes
down, it raises the value of the dollar, which means that U.S. products
cost more overseas. This means that the actions of Wall Street bankers
have once again created a situation where American jobs are lost, and just
when a recovery seems at hand. And that undermines the entire country,
with fewer tax dollars to pay for programs such as education and Social
As a result of hiding its borrowing from investors and regulators, Greece
now owes $300 billion. Waiting in the wings are similar disasters in
Portugal, Ireland and Spain. And again, the outcome will mean another
slam at Americas unemployed.
This is not to mention all of the billions lost in the 401k retirement
plans of American workers whose investments are continually jerked around
by the irresponsible actions of firms such as Goldman Sachs.
When is someone in Congress going to step up to the plate and say Off
with their heads! for the royalty of Wall Street who seem to feel they
have the divine right to wreak endless harm on America?
Not in a literal sense (satisfying though that might be), but it seems
high time to consider breaking these banks up the way that the monopoly of
Ma Bell AT&T was splintered in 1984. Or at least, tax these bandits and
their bonuses until they‘ve got nothing left but their underwear.
The banks argued that they were literally too big to be allowed to fail
when they sent one-third of the worlds economic value up in smoke. But
the latest betrayal in Europe makes you wonder if they are too big to be
allowed to exist.
Northern Michigan offers a model for a bank that succeeded by doing things
by the book: Northwestern Bank, which has branches in 18 communities,
didnt need any bail-out funds because they resisted the urge to make
shaky loans and dubious mortgages at a time when that was all the rage.
They held to the principles of good business practices and today are
widely considered to be the most solvent and successful bank in Northern
We need to demand that same integrity from the largest banks and
investment firms in America because jobs and retirement funds are on the
line here -- not to mention the ramifications for Social Security,
Medicare, education and social programs which will go begging as a result
of this continuing disaster.
Footnote: Getting back to good King Charles... Oliver Cromwell, who
became dictator of England after the kings death, was so kind as to let
relatives sew Charles head back on his body so that he could be
presentable for his funeral. Perhaps a similar courtesy could be extended
to the kings of Wall Street.