Six Largest US Banks Own 63 Percent of GDP
A startling statistic buried within an outstanding New Republic article:
As a result of the crisis and various government rescue efforts, the largest six banks in our economy now have total assets in excess of 63 percent of GDP (based on the latest available data). This is a significant increase from even 2006, when the same banks’ assets were around 55 percent of GDP, and a complete transformation compared with the situation in the United States just 15 years ago, when the six largest banks had combined assets of only around 17 percent of GDP. If the status quo persists, we are set up for another round of the boom-bailout-bust cycle that the head of financial stability at the Bank of England now terms a “doom loop.”
Good god. I knew that these banks were big, but I had no idea they were this big. The New Republic devotes the rest of its article to explaining why Obama’s bank regulations are (surprise!) a sham. But then, we should have already known that. When Treasury Secretary Geithner appeared on Newshour a few days ago, he baldly stated that these new regulatory rules “will not include breaking up the banks“. Forgive me, but what is the point of “regulation” if our banks are allowed to keep their “too big to fail” status and continue to engage in the same practices that brought down our economy in 2008? The so-called Volcker rules do nothing to stymie the relationship between Wall Street and Washington, they do nothing to prevent banks from over-leveraging (as they had during the run-up to the crisis), they allow the banks to retain their gargantuan size… so what were the Volcker rules supposed to do again? Oh yeah, it bans “proprietary trading”, somthing which only accounts for 5 percent of total bank revenue.
Meanwhile, President Obama is proposing yet another giveaway to the banks, this time in the form of $30 billion in loans at below-market interest rates. If I sell you something about below-market value, then I’m giving you a gift. That’s what these “loans” are. The Washington Post attempts to bury the issue in the middle of the piece, and refers to the subsidy as going to “community banks”, without noting that most of these “community banks” have long since been bought up by our banking behemoths.
I don’t really know what else to say here. The banks own Congress; they own the House; they own Obama (check out his campaign donors) – there doesn’t seem to be any way out of this. I think some mobs with torches and pitchforks would not go amiss at this point.