Sunday Evening Reads
Too Big To Exist
“It’s still fat and easy up on banker’s hill
Up on banker’s hill, the party’s going strong
Down here below we’re shackled and drawn”
Bruce Springsteen, “Shackled and Drawn”
Enjoy the full lyrics to this song here.
By most accounts I’ve read, Springsteen’s album, “Wrecking Ball”, released in 2012, (on which this song appears). was his reaction to and reflection on the massive financial crisis our country was still wading though in 2012. And in “Shackled and Drawn’ and other songs on this album, he correctly names the bankers, who never were punished for the financial destruction they caused.
But what is terrifying now is that “…on banker’s hill” as Springsteen calls their lair, the party is still going strong well into 2021, with no real end in sight.
I did catch a few glimmers of hope, however, from the information in the articles below, that the banks and other financial firms might begin to have their partying days curtailed.
— This New York Times piece from just last week, discusses the narrowly confirmed new head of the Consumer Financial Protection Bureau, Rohit Chopra. The headline declares that he is “expected to use his position to rein in financial firms”, one of the two core missions of the agency (along with protecting consumers), that its previous directors under the Trump administration, apparently neglected to do. In forthcoming posts, I plan to do a deep dive into the CFPB, and what their regulations mean to everyone who holds a mortgage or credit card. By the way, it means a lot.
https://www.nytimes.com/2021/09/30/business/cfpb-rohit-chopra-confirmed.html
If you are not able to read this Times article because of a paywall, please let me know.
— Speaking of “Too big to fail”, this article from Fast Company discusses Senator Elizabeth Warren’s recent call to break up America’s fourth largest bank by assets, Wells Fargo.
Senator Warren, who created the above-mentioned Consumer Financial Protection Bureau, and who sits on the Senate Banking Committee, called on the power of the Federal Reserve to “split apart the banking and wall street sides of its [Wells Fargo] business.”
https://www.fastcompany.com/90676358/its-time-to-break-up-wells-fargo-says-elizabeth-warren
— Taking a contrary position to the break-up, this opinion piece from Bloomberg News lays out a few, rather unconvincing arguments (at least to me) against the Wells Fargo split: To divest itself of a significant chunk of its business, the author contends, “…would demand a massive amount of time for legal, regulatory, technical and financial disentangling”, such that they could not also correct its “mismanagement” practices that caused its string of scandals and billions of dollars in penalties in the last few years. A bank of this size can’t walk and chew gum at the same time?
Speaking of Wells Fargo, I couldn’t resist adding their beloved Christmas commercial to the mix. Yes, it’s a beautifully done, heartwarming, Christmas story spreading good cheer, but put it in the context of the well over $5 billion in penalties that Wells Fargo has paid for a string of fraudulent behaviors perpetrated on their customers in just the last few years, and you’ll see why we need a well-armed Consumer Financial Protection Bureau more than ever.
Cheers!