The US government has begun its enquiry into the the role of the bankersduring the collapse of the country's finance system. Bankers Without a Clue http://www.huffingtonpost.com/2010/01/15/krugman-bankers-without-a_n_424451.html
But the bankers' testimony showed a stunning failure, even now, to grasp the nature and extent of the current crisis. And that's important: It tells us that as Congress and the administration try to reform the financial system, they should ignore advice coming from the supposed wise men of Wall Street, who have no wisdom to offer.
Their main claim in their defence was that the events of 2008/9 were merely acts of nature and without human fault. Of course they would say that, they are out to save their bonuses and wish to continue without change. Phil Angelides, the commission's chairman, was not amused: The financial crisis, he declared, wasn't an act of God; it resulted from "acts of men and women."
Quite, but many critics are arguing that the reform of the banking sector is too soft and too slow, and with millions available for 'lobbying' it's easy to see why. Banks that accepted billions of dollars in federal bailout money are now spending millions to block tighter government regulation, including a consumer protection agency that would oversee financial transactions.
Statistics compiled by the Center for Responsive Politics http://www.opensecrets.org/lobby/indusclient.php?lname=F03&year=2009 show that the commercial banking industry has spent nearly $37 million this year. Leading the pack is the is the American Bankers Association, spending more than $6 million. Other big spenders are JP Morgan Chase, Citigroup, Bank of America and Wells Fargo.
Mortgage bankers are also paying millions to lobby Washington. The center reports that their lobby expenses in 2009 top $11 million. Remember, banks create money out of thin air by issuing loans and other credit products, they can simply 'spend' their way out of trouble. The only real and effective way of ending this debt slavery is to abolish the right of banks to issue money.
