With JP Morgan Chase chief executive Jamie Dimon being lambasted before the U.S. Senate, you’ll hear a lot of talk about efforts to regulate the banking industry to safety. This is all happening in the wake of Chase’s recent loss of $5 billion through widely speculative gambling.
But I’m here to tell you the talk about regulation is all just political window dressing. The nation’s five biggest banks account for 56% of the gross domestic product in the U.S. and collectively control more than half of all assets. And unfortunately, they own Washington. They’ve become expert at using taxpayers to privatize gain and socialize loss on your and my back.
So I don’t normally like to be pessimistic, but regulation is not going to cut it. Here’s my solution instead. It’s a two-fold plan.
First, I would strip any bank that has more than 1% of the nation’s assets of its FDIC protection. Then you as a customer would have to decide if you’re willing to take a chance on having your account wiped out in the event the bank fails again.
Second, we need to dismantle all the Too Big To Fail banks into smaller pieces. Bust them up into regional entities so that no one institution can ever hold the American government and people hostage again as they did when their foolish actions precipitated the Great Recession.
Sadly, the banks are bigger and more powerful today than they were before they brought America and worldwide markets to their knees a few years ago. What we have to decide is are we going to be a banana republic bowing to their will or are we the United States of America?
The big banks need to be destroyed. There is no way to regulate this stuff to safety.