Too late

Dems and Repubs are showing their egg-covered faces on the news shows in the wake of the latest banker debacle as JPMorgan Chase tries to swallow its $2 billion (or is it $3 billion?) in gambling debts before more start to show up. But despite the posturing, neither side has much to be proud of.

Our Republican banker whores truly have no shame. Their spokespeople, like Corker of Tennessee on The News Hour tonight, try to spin this obvious malfeasance of what is government/taxpayer-backed money by blaming [are we sitting down?] government regulations! The Dodd-Frank law that they systematically tried to block, then turned into a horror of complexity to provide plenty of loopholes for their banker bribemeisters, is now at fault for being . . . too complex!

Barney Frank couldn’t stifle his contempt for this exercise in cynicism on the morning news as his Republican banshee counterpart repeated their obfuscatory talking points. But the Dems have nothing to brag about. When Obama had the TBTF banks by the balls in his first months in office, he and his party collectively bobbled them. This was not a flaw but a feature, a strategy to protect the banksters from the pitchforks of an outraged populace, and it’s a strategy they continue to pursue today with considerable success. Just as the ‘center-left’ parties of Europe faithfully bowed to the Merkel-Sarkozy austerity madness over the last two years, ours preferred to protect the bankers rather than confront them. They still do.

Barney Frank, Carl Levin and the rest of the ‘reform’ crowd on Capitol Hill (rhetorically juiced by Obama himself) can’t answer the Republicans’ appallingly cynical but nonetheless germane question: why didn’t the mammoth regulatory legislation of 2010 stop Chase’s dangerous practice? Levin could only bleat on about how very illegal it was, by which he reveals the weakness of the entire enterprise. JPMorgan is so huge and so powerful that it can now engage in illegal behavior with impunity. Prosecutions could follow and even hurt. But that won’t mean much if the next disaster wrecks the financial system—again.

Bank reform should have started with the break-up of these bank behemoths into manageable parts susceptible to supervision and vigilance. Instead, they’ve been allowed to metastasize into ever larger and more dangerous cancers. Many voices have predicted that the conditions are now set for an even deadlier collapse. If so, this week’s shake-up is only a foretaste.