“Only the movement of money will cause banks to act more responsibly,” Rev. Patrick O’Connor and Mike Gecan of Industrial Area Foundation contend in a well-received New York Daily News op-ed piece (October 16, 2011). That’s why they say to withdraw massive accounts from–and shackle $200 billion penalties on–”irresponsible” banks. Let the Marchers on Wall Street demand those penalties, the IAF says.
But we know those banks (JPMorgan Chase, Citigroup, Bank of America, AIG, et al.) are too big to fail–i. e., to take bankruptcy–and are certain to be saved with bailout billions whenever hard pressed, as in 2008. Their giantism will always protect them, immunizing them from market rivalry.
So before it asks for penalties, let the IAF ask how the irresponsible banks became too big in the first place, so big they’re indestructible. The answer is so obvious it flies under the radar screen.
They became too titanic only by massive takeovers of other banks, through flouting of antitrust laws. Bank of America, for one, took over a thousand banks, then ordered the formerly independent managements to underwrite subprime mortgages that devastated the economy. The Acquisitors: Too Titanic to Let Sink, Chapter 1.
We’ve learned taxpayers must ensure the well-being of the irresponsible banks too big to fail. So why do we think withdrawing massive accounts and penalizing them (even if possible) will make them responsible? Why not try stripping them of their shell of takeover bigness (unlawful to begin with)–the shell that permits their irresponsibility?
Let’s hope the Wall Street Marchers demand not mere penalties but that the irresponsible bank agglomeration be unraveled. That acquired banks be pried off acquistor banks. That banks too titanic to let sink be broken back to size. Then the marchers would leave a permanet contribution.