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"...public opinion deserves to be respected as well as despised" G.W.F. Hegel, 'Philosophy of Right'

taking on financial capital « Previous | |Next »
January 25, 2010

After the global financial crisis there’s every incentive for the big bankers on Wall Street to engage in a repeat performance. Since they were bailed out by the state with few strings attached it’s now clear to them that they’re living in a heads-they-win, tails-taxpayers-lose world. After the global financial crisis, global financial capital hates any reform that restricts its casino like activities, which they equate with doing God's work.

There is an emerging conflict between the state and financial capital in the US. after Obama's stated intent to take on Wall Street by announcing plans for stringent rules on the banking sector to prevent commercial banks from making risky trades ups the stakes.This is not before time.

Martin Rowson

Obama is giving his support to two measures to make sure that Wall Street doesn’t crash into another financial crisis: (1) separating the functions of investment banking from commercial banking (basically, resurrecting the Depression-era Glass-Steagall Act) so investment banks can’t gamble with insured commerial deposits, and (2) giving regulatory authorities power to limit the size of big banks so they don’t become “too big to fail,” as antitrust laws do with every other capitalist entity.

However, Congress is not really that interested in the state-based approach to limiting the size and risk of big banks, given that the major source of campaign funding is finance capital. On the other hand, the deep and continuing economic stresses in the US means that voters are petrified of losing their jobs, their homes, and what’s left of their savings and don't have much time for the excess of the big banks--bank profits are up and bonuses as generous as at the height of the boom.

There is a populist backlash building in the US against Wall Street and a bad economy, and President Obama’s kid-gloves treatment of the bankers has put Democrats on the wrong side of this rage.

| Posted by Gary Sauer-Thompson at 7:04 AM | | Comments (8)


the "greed is good" culture sums the big banks up.

"There is a populist backlash building in the US against Wall Street and a bad economy, and President Obama’s kid-gloves treatment of the bankers..."

And that's the ONLY thing driving this chatter on reform. It's an obvious vote-getting stunt for the mid-terms. The crew in DC are simply playing to the masses.

Even giving Obama the benefit of the doubt...

He has inherited a nation with an overstretched military and a distorted, teetering economy. And swamped by a partisan, self-serving media.

Maybe a "reformist" agenda just isn't enough. In such conditions... by the time a genuine reformist leader takes the reins, it is almost too late to set things right. The situation had to be (quite obviously) dire for him to come to power in the first place, right?

Mars 08 realises how important this news is, judging by above response.
Like Mars08, I'd love to see this come about, as a start to a wide reform of globalisation and economics.
Like Mars06, am sufficiently old or disillusioned enough to not beleive it before I see it.

There is an argument that the American political system is dysfunctional and cannot deliver on reform even when a majority of American citizens voted for it.

Sounds like more of this hole rubbish that banks should say sorry to the poo'r for making heaps of money. Same as exec salaries.

I think it's the out-and-out fraud that bothers most of us, Les.

Yes Fraud is wrong. Making profit isn't.

When a company or bank makes a profit it is because all the individuals in that business do their role well. Jenny the bank teller is friendly thus attracting custom that allows the bank manager to lend money so a little profit is made. All these little profits made by lots and lots of little people added together makes a big profit. Along the way all the little people get paid(and the money business employs a huge amount of people)and they spend all their money on other things that keeps other businesses and people employed and making profits. Its all quite magical really.