Economic Delusion, Political Disaster
By JOHN KENNETH GALBRAITH
March 11, 2001
I am not, in my own view or that of others, a plausible
political adviser to the Bush administration, but I would like to
suggest that it could be on course for a powerful political disaster.
Following a period of insane speculation, we are thought now to be
facing a recession, possibly even, so far as there is a difference, a
depression. To read more...
Capitalist Fools
Behind
the debate over remaking U.S. financial policy will be a debate over
who’s to blame. It’s crucial to get the history right, writes a
Nobel-laureate economist, identifying five key mistakes—under Reagan,
Clinton, and Bush II—and one national delusion. To read more...
On Wall Street, Bonuses, Not Profits, Were Real
December 17, 2008
“As a result
of the extraordinary growth at Merrill during my tenure as C.E.O., the
board saw fit to increase my compensation each year.” E. Stanley O’Neal, the former chief executive of Merrill Lynch, March 200. To read more...
Excessive pay fuels City gambling, says Mervyn King
Gary Duncan
February 27, 2009
The Governor of the
Bank of England has attacked the “astronomic” pay enjoyed by top
bankers for creating a culture of reckless gambling in the City... To read more...
England's Central Banker on 'Too Big to Fail'
October 23, 2009
As the U.S. political class blames
banker pay for the panic (see above), we'd like to salute Bank of
England Governor Mervyn King for speaking a larger truth. Mr. King gave
a speech in Edinburgh Tuesday in which he said, in effect, that if a
bank is too big to fail, it's just too big. This prompted British Prime
Minister Gordon Brown to shoot back that breaking up the largest
financial institutions wasn't the answer, adding the now obligatory
call for global regulation of banker pay. To read more...
Volcker Urges Dividing Investment, Commercial Banks
By Matthew Benjamin and Christine Harper
March 6, 2009
Commercial banks
should be separated from investment banks in order to avoid another
crisis like the U.S. is experiencing, according to former Federal
Reserve Chairman Paul Volcker. To read more...
On financial reform, listen to Paul Volcker
October 23, 2009
Last week, Mervyn King, Britain's equivalent of Federal Reserve
chairman, delivered a scathing speech calling for radical reform of the
British financial system. Among his recommendations: break up the "too
big to fail" banks and separate risk-taking investment banks from
meat-and-potatoes commercial banking. To read more...
Capitalism Needs a Revived Glass-Steagall
By: Nigel Lawson
15 March 2009
That
capitalism has been shown, in practice, to be endemically flawed should
come as no surprise. That is the nature of mankind. What is more
important is that history, notably the history of the world after the
second world war, has demonstrated beyond dispute that every other
system of economic organisation is far worse. So capitalism both
deserves to survive, and will survive, just as it did after the even
greater economic disaster of the 1930s. To read more...
Reed Apologizes for Glass-Steagall Repeal, Building Citigroup
By Bob Ivry
Bloomberg
November 6, 2009
Nov. 6 (Bloomberg) -- John S. Reed, who helped engineer the merger that
created Citigroup Inc., apologized for his role in building a company
that has taken $45 billion in direct U.S. aid and said banks that big
should be divided into separate parts. “I’m sorry,” Reed, 70, said in an interview yesterday. “These are
people I love and care about. You could imagine emotionally it’s not
easy to see what’s happened.” To read more...
Paulson's Calls to Goldman Tested Ethics
By Gretchen Morgenson and Don Van Natta Jr.
August 8, 2009
Before he became President George
W. Bush’s Treasury secretary in 2006, Henry M. Paulson Jr. agreed to
hold himself to a higher ethical standard than his predecessors. He not
only sold all his holdings in Goldman Sachs, the investment bank he had
run, but also specifically said that he would avoid any substantive
interaction with Goldman executives for his entire term unless he first
obtained an ethics waiver from the government.
But today, seven months after Mr.
Paulson left office, questions are still being asked about his part in
decisions last fall to prop up the teetering financial system with tens
of billions of taxpayer dollars, including aid that directly benefited
his former firm. Testifying on Capitol Hill last month, he was grilled
about his relationship with Goldman. To read more...
Too Big to Succeed
By Philip Bowring
OP-Ed Contributor
November 10, 2009
HONG KONG — This
week is the 10th anniversary of the signing by President Clinton of
legislation abolishing the Glass-Steagall act, which, since 1933, had
kept a wall between commercial banking and investment banking and
insurance. That Depression-era law stemmed from the role that
speculative investment banking had played in the failure of many
commercial banks, which in turn wrought havoc on the U.S. economy.
Upstairs, Downstairs
By Graydon Carter
January 2010
Banking
interests have been the beneficiaries of that $17.5 trillion in
guarantees, loans, and bailouts, and what have they to show for it? At
top-tier firms such as Goldman Sachs and J. P. Morgan Chase, the aid
has meant record profits—which means record bonuses. Those two outfits,
along with Morgan Stanley, all of which received funds from the
Troubled Asset Relief Program, will reportedly dole out an
unprecedented $29.7 billion in bonuses for 2009, almost half of that by
Goldman Sachs alone, meaning it will enrich its 31,700 employees by an
average of $415,000 each. To read more...
Fight On, Goldman Sachs!
The New York Times
When the Goldman Sachs chief executive made that tone-deaf remark to an interviewer in November,
he became the butt of a million insults, the ultimate symbol of Wall
Street’s abdication of responsibility for its sleazy role in the Great
Crash of ’08. But now we’ve learned that Blankfein was actually, if
inadvertently, on the side of the angels. It’s his myopic, unrepentant
truculence that left Goldman exposed to a Securities and Exchange Commission accusation of fraud
that will be litigated in public rather than bought off in private. And
it’s that S.E.C. legal action that has, in a single week, radically
transformed the politics and prospects for financial reform in America. To Read more...
The Good Banker
By JOE NOCERA Published: May 30, 2011
“To me, banks
exist for people to keep their liquid income, and also to finance trade
and commerce.” Yet the six largest holding companies, which made a
combined $75 billion last year, had $56 billion in trading revenues. “If
you assume, as I do, that trading revenues go straight to the bottom
line, that means that trading, not lending, is how they make most of
their money,” he said.
To read more...
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