When we were told four years ago that the United States had a few banks “too big to fail,” many of us wondered why we weren’t breaking up those banks instead of bailing out the bankers.
Well, in his new book “The Payoff,” Vice President Joe Biden’s former staffer Jeff Connaughton has the answer: Those big banks have bought off the Democrats as well as the Republicans. Bribery keeps the big banks big.
With the threat of antitrust enforcement over their heads, the big bankers are only too happy to funnel campaign contributions to the top Democrats and Republicans in Washington, and the politicians are happy to accept the bribes. For members of Congress, desperate for the jackpot that flow from perpetual re-election, that funding is a lot bigger and a lot more reliable than small donations from average Americans. And with the government bought off, the bankers can rest assured their high-paying jobs are safe no matter how irresponsibly they run their banks.
Banking cover-up. Our leaders pretend to be tough on big banks, but watch how little they do about banks that do wrong. Fannie Mae and Freddie Mac created a system that produced $1 trillion worth of reckless home loans, but did Congress and President Obama do anything to break up Fannie and Freddie? No. They’re still around, and we’re still paying for their bad bets.
The Democrats notoriously took over Fannie and Freddie in the 1990s and early 2000s, and pushed those mortgage giants to ignore banking standards and back loans to people who couldn’t possibly pay them back. That was bad enough and, except for Bill Clinton and Artur Davis, the Democrats still are covering up that crime.
In the 1990s and early 2000s, Fannie and Freddie were buying off every major politician in Washington, from Democrat Rahm Emanuel to Republican Newt Gingrich. It’s no wonder that both major political parties tolerated the massive malfeasance of those two institutions.
Break 'em up. Connaughton was shocked that Joe Biden dropped from the “banking reform” bill a provision that would have knocked the monster-size banks down to size. I’m shocked he was shocked.
We’ll know our leaders have learned something when Fannie Mae and Freddie Mac are abolished, when the big banks are split up and when new laws put politicians to jail for accepting any special favor from a bank.