A recent Nation of Change op-ed piece featured Robert Reich (political economist, professor, author, and political commentator. Reich also served in Presidents Gerald Ford and Jimmy Carter’s administrations and was Secretary of Labor under President Bill Clinton from 1993 to 1997). After asking, “What exactly does it mean for a big bank to plead guilty to a serious crime?” He responded, “Right now, practically nothing.”
You know the Too Big to Fail story from the Wall Street Journal and your local newspapers, the N.Y. Times, The Economist, Wired, and any newspaper and publication of substance. We have been bombarded with the Too Big to Fail atrocities over the last several years. And, you’ve read my outrage at all of this as well.
But, there is an interesting new twist to this story, which I’ll share in this article, which might make a dent in this whole larcenous bank debacle. First, let’s review some background.
The Wall Street Giants, from JP Morgan Chase, to Citigroup, and others plead guilty to rigging the world’s currency market to line their own pockets. Other than being fined, they received no other penalties. As Reich, others, and I have pointed out, lesser crimes mean the guilty go to jail, including bankers from past transgressions in prior debacles and bank swindles.
Attorney General Loretta Lynch calls these banks’ actions, “a brazen display of collusion” that harmed “countless consumers, investors and institutions around the globe.”
And the indicted bankers, as Reich says, do sound contrite. He says, “After all, they can’t have the public believe they are outright crooks.” He quotes JP Morgan CEO Jamie Dimon, “it’s a great disappointment to us,” and “we demand and expect better of our people.” Reich says, “JP Morgan expects exactly this kind of behavior from its people.”
Citigroup CEO Michael Corbat says, “It’s an embarrassment to our firm, and stands in stark contrast to Citi’s values.” Reich again pulls no punches “Values? Citigroup’s main value is to make as much money as possible. Corbat himself raked in $13 million last year.”
So, no serious penalties are imposed and finally some folks have had it!
The County of Santa Cruz, California, 100 years old, a bucolic sea coast town, 75 miles south of San Francisco, population 63,000, more or less, is fed up with the TBTF banks subverting the political process, giving huge contributions to political campaigns, writing legislation to their benefit and otherwise getting out of jail free and collecting $200.
The county’s board of supervisors has voted to not do business, for the next five years, with any of the TBTF banks who were recently fined. They are not using the bank’s investment services and to the extent they are able, they are taking their money out of the banks in question. County supervisor, Ryan Coonerty says “We have a sacred obligation to protect the public’s tax dollars and these banks can’t be trusted. Santa Cruz County should not be involved with those who rigged the world’s largest financial markets.”
Now, monetarily, this is not a big deal to these banks, Santa Cruz’s investment portfolio is valued at $650 million. This does not really hurt the banks in question’s pocket books. However, Coonerty is urging other municipalities across the country to do the same. Now that’s a big deal.
What if everyone had enough? What if every city, county, business and individual said “Enough!”
What if we voted with our pocketbooks and imposed a penalty on the TBTF banks? What if we said, as did Santa Cruz: clean up your act, play legally and ethically, and treat the consumer the way you demand to be treated?
Congratulations, Santa Cruz — one county, one town, one government — having the guts to do the right thing and hold business accountable.
What if we all imposed a penalty on the TBTF? Bet they’d sit up and listen.
[tweetthis twitter_handles=”@RichardMBowen” url=”http://buff.ly/1Mh9A8m”]What if we all imposed a penalty on the TBTF? Bet they’d sit up and listen. #tbtf [/tweetthis]