The private banking monolith is an autocracy, virtually independent of regulation. In its latest show of power, JPMorgan acquired Bear Stearns at bargain basement prices in a hostile takeover conducted behind closed doors, funded with a $55 billion advance from the bankers’ bank, the Federal Reserve. (See “The Secret Bailout of JPMorgan,” webofdebt.com/articles.) The CEO of JPMorgan sits on the Board of the New York Fed, making decisions that benefit his own very extensive stock portfolio. Federal statute makes this sort of conflict of interest a criminal offense. (See “What’s the Difference Between Lehman Brothers and Bear Stearns?”, webofdebt.com/articles.) But who is there to complain? Politicians say they can do nothing. The banking lobby is too big to be policed.
Congress has no authority over the Federal Reserve. Like the market itself, legislators just wait with bated breath to hear what the Fed Chairman is going to say next. State leaders who have attempted to police the banks, from Huey Long to Eliot Spitzer, have been taken down themselves. The proposal now on the table is for the privately-owned Federal Reserve to police the whole banking industry, a clear case of the fox guarding the henhouse. (See “April Fools,” webofdebt.com/articles.)
So who has the clout to stand up to the banks? We the people will have to do it ourselves, armed with some hefty lawsuits. Banks are now facing what could become a tsunami of private litigation. (See “Let the Lawsuits Begin,” webofdebt.com/articles.) We can catch that wave and ride it to shore. This blog page aims to address how we might set up a lobby or coalition for that purpose. Your thoughts are invited!