https://wallstreetonparade.com/2024/01/naming-names-professor-exposes-the-banking-cartel-that-has-hijacked-u-s-democracy/
By Pam Martens and Russ Martens: January 23, 2024 ~
Gerald Epstein is Professor of Economics and a Founding Co-Director of the
Political Economy Research Institute (PERI) at the University of
Massachusetts, Amherst. A book he has spent the past decade researching and
writing comes out today from the University of California Press: Busting
the Bankers’ Club: Finance for the Rest of Us.
Anticipation of this book’s release has caused some sweaty brows in the
halls of Congress, on Wall Street, at Big Law, and in the economics
community. That’s because Epstein is naming names – the names of the people
who have sold out American democracy and the public interest by becoming
sycophants for, or actual members of, the Bankers’ Club.
The Chairman of the Bankers’ Club is the Federal Reserve, writes Epstein.
That’s because the Fed has strongarmed its way to becoming both the
supervisor of the Wall Street mega banks while also being able to create
money at the flip of an electronic switch, which it uses to funnel
trillions of dollars in cheap loans to bail out the mega banks behind a
dark curtain. Alan Greenspan’s unprecedented 19-year reign as Fed Chair
laid the foundation for this power grab while his successor, Ben Bernanke,
enshrined the concept of regulator-turned-bailout-kingpin during the 2007
to 2009 financial crisis, (funneling $29 trillion in largesse to prop up a
financial structure that had collapsed under the weight of its own
corruption).
Gerald Epstein, Author, Busting the Bankers’ Club: Finance for the Rest of
Us. Photo Credit, Stan Sherer
The unprecedented power of the Bankers’ Club is underscored by the reality
that after the worst financial collapse in 2008 among Wall Street firms
since the Great Depression, the legislation passed to remedy the
corruption, excesses, and abuses (the Dodd-Frank Act of 2010) was little
more than a draft, left to compromised regulators to fashion into final
rules. Epstein describes how Citigroup, with help from pals in the Bankers’
Club, gutted a key part of the legislation meant to rein in derivative
abuses. (For more on this sleazy episode, read our report: Meet the Two
Congressmen Who Facilitated Today’s Derivatives Nightmare at Wall Street’s
Mega Banks.)
Other key members of the Bankers’ Club according to Epstein are the
politicians (particularly on key committees in Congress) who have sold out
to the Bankers’ Club in exchange for funding of their political campaigns;
bank regulators who have one foot on government soil and the other foot
heading toward the revolving door and a much bigger paycheck; Wall Street’s
outside lawyers from Big Law who sneak language favoring the Bankers’ Club
into legislation; a swarm of dozens of lobbying groups working on behalf of
Wall Street banks in the corridors and offices of Congress; and even
members of his own profession – economists – who promote unsound ideas
purporting to show that Wall Street mega banks serve the interests of the
public and that more regulation is inefficient and negatively impacts
economic growth.
In each of the categories above, Epstein names names. A member of Big Law,
the Senior Chair of Sullivan & Cromwell, H. Rodgin (Rodge) Cohen, makes the
following appearance in Busting the Bankers’ Club:
“…The dean of Wall Street lawyers, H. Rodgin Cohen, chair of the Wall
Street firm Sullivan & Cromwell, had his hand in virtually all the key
legal and enforcement actions promoting financial deregulation during this
period. The work of these lawyers dovetailed with the lawyers and
economists who developed the field of ‘law and economics,’ which, in a
powerful alliance with the economists I mentioned earlier, provided a
theoretical legal-economic basis for deregulation and a less
interventionist state….”
Opposing this conspiratorial Bankers’ Club is a talented, creative army of
good guys, whom Epstein calls the “Club Busters.” High on Epstein’s list
for accolades are the nonprofit watchdogs, Better Markets, Americans for
Financial Reform, and the public banking advocacy groups across the country.
While these groups deserve the accolades, along with the other groups and
individuals mentioned by Epstein, there are two critical impediments
preventing the Club Busters (including Wall Street On Parade) from
achieving a serious victory in rolling back the power of the Bankers’ Club
and genuinely reforming Wall Street.
Those critical impediments are the repeal of the Glass-Steagall Act in 1999
and the Supreme Court’s Citizens United decision in 2010.
The repeal of the Glass-Steagall Act (Banking Act of 1933) allowed Wall
Street’s trading houses to control the trillions of dollars of life savings
of mom and pop depositors. The repeal meant that global trading behemoths
like JPMorgan were allowed to merge with federally-insured banks,
back-stopped and thus subsidized by the U.S. taxpayer.
