Alex Baer
The Dallas Federal Reserve is echoing the thoughts repeatedly spoken by frustrated observers in all categories: Too big to fail is simply too big to let survive.
If the biggest U.S. banks are not broken up, so they say, taxpayers will again be stuck with the tab on another gigantic bailout.
You may remember that the most recent round of carefully-engineered, bubble-and-burst spree of capitalist greed and freewheeling casino-ism, cost taxpayers 180 billions of dollars by some estimates --3.5 trillions of dollars by other estimates, all costs included.
The S & L crisis that dogged us in the days of Reagan, in the 80s and 90s, says the nonpartisan GAO, will cost half a trillion dollars before it is fully wound down -- however, that estimate was made some time ago. As always: loss estimates are fluid when dealing in liquid assets -- how much can bankers cart off in their thievery, versus, how much, if any, did they spill, on the run, sloshing their way outside?
Sounds like the Dallas Fed -- one of the most conservative of the regional banks, says economist and author Robert Reich -- are themselves finally seeing the invisible handwriting come clear on the wall, and can now see what we have all been looking at in horror all this time.
Among the many wonders suddenly not ceasing to be, is this one, written by Reich at his blog post: "Taxpayers will be on the hook for another giant Wall Street bailout, and the economy won't be mended, unless the nation's biggest banks are broken up. That's not just me talking, or the Occupiers movement, or that wayward executive who resigned from Goldman Sachs a few weeks ago. It's the conclusion of the Dallas Federal Reserve."
Joyce Hanson at AdvisorOne wrote, "According to the 34-page report, the financial institutions that amplified and prolonged the 2008 crash continue to hinder not only the recovery but the very ideal of American capitalism."
The best hope for the U.S. economy is "breaking up the nation's biggest banks into smaller units," says the Dallas Fed in its recently released annual report, "Choosing the Road to Prosperity: Why We Must End Too Big to Fail -- Now."
Prosperity: There's a word not usually bandied around. It was a popular word during the financier-and-bank-triggered Great Depression, the word holding out a morsel of hope to ravaged Americans trashed by its own banking system -- one allowing clawing, rampaging greed by a few at the very top.
As the Dallas Fed notes, "More than half of banking industry assets are on the books of just five institutions." Sound like a healthy country, or a booming, free-market system we always hear being touted around?
Too big to fail is absolutely too big to keep propped up -- too big to keep hoping easy-money swindlers and scam artists in suits won't push over again in their race to the dining table and trough, pursuing their usual, single-minded, feeding-frenzy of unbridled greed.
Nice to spot the Dallas Fed opening its eyes, and now seeing the same mayhem and danger the rest of us have been seeing for a very, very long time.
Wonders never cease.
http://www.advisorone.com/2012/04/04/robert-reich-dallas-fed-says-break-up-big-banks
http://www.huffingtonpost.com/robert-reich/dallas-fed-wall-street_b_1388443.html
http://www.dallasfed.org/assets/documents/fed/annual/2011/ar11.pdf
