Eric Holder Plays Stick 'Em Up - The American Spectator | USA News and Politics
Eric Holder Plays Stick ‘Em Up

A couple of days ago, the word on the street was that J.P. Morgan Chase & Co. would have to take a $3 billion hit in order to reach a settlement with the U.S. Justice Department over charges that it misled investors about the quality of mortgage-backed securities prior to the 2008 financial meltdown. Now — as the headline in yesterday’s Wall Street Journal put it — “J.P. Morgan Settlement Talks Hit $11 Billion.”

But as Hillary Clinton so famously shouted out at the Benghazi hearings, “What difference does it make at this point?”

It really doesn’t make any difference whether the mustachioed Eric Holder pulls out a gun and tells the silver-haired Jamie Dimon to fork over $3 billion, $11 billion, $150 billion, or $10 trillion.

They both know it’s all play money — and political theater.

A fine of $150 billion would wipe out every cent that the bank has earned in the past decade — and then some — so that would probably be more than enough to throw J.P. Morgan into bankruptcy. Which in turn would trigger another bailout — with the Federal Reserve and the Treasury throwing in whatever was needed to refloat the bank and keep Jamie Dimon happy.

In his first debate with Barack Obama, Mitt Romney pointedly and correctly observed that the Dodd-Frank Act was “a big kiss” for the Wall Street banks — instilling the belief that they are too big to fail and — if they did fail — putting in place a mechanism that allows the Federal Deposit Insurance Corporation to stop a run on the banks by bailing out even unsecured creditors.

As Ben Bernanke has acknowledged, that in turn allows big banks to borrow money at lower rates than smaller banks. As he put it, “a bank which is thought to be too big to fail gets an artificial subsidy in the interest that it can borrow at.”

In gunning the money supply and purchasing hundreds of billions of dollars of securities, the Fed has also managed to keep interest rates at near zero, which has siphoned money from Main Street and given it to the most spendthrift government in U.S. history — while also providing Wall Street with a steady stream of profits in being able to borrow on the cheap and lend it out more expensively.

The 2010 Dodd-Frank law also created the Financial Stability Oversight Committee, which is supposed to be on the lookout for financial icebergs — spotting any “systemic risks” to the financial system. Heading up the committee is Treasury Secretary Jack Lew, who was part of Citigroup during the financial crisis and making more than $1 million a year — as the chief operating officer of Citigroup’s Alternative Investments Unit (CAI), which lost hundreds of millions of dollars before shutting down. As the Wall Street Journal reported in an editorial on Jan. 29, 2013 (“Treasury Gets a Citibanker: From Wall Street failure to the pinnacle of finance in four short years”): 

There probably weren’t many laughs at Citi during the market panic in 2008. But if someone had said that a CAI executive would be the secretary of the Treasury within five years, the line would have brought the house down. That year the house almost really did come down, thanks to the horrendous mortgage bets at CAI and other parts of Citigroup. The bank survived only with a series of taxpayer bailouts that provided $45 billion in cash, taxpayer guarantees on more than $300 billion in risky assets, tens of billions more in federal guarantees on Citi debt, plus cheap loans from the federal reserve.

Jamie Dimon is a long-time pal of Rahm Emanuel, Obama first chief of staff, and Bill Daley was part of his inner circle at J.P. Morgan before he left to become Obama’s second chief of staff. Jack Lew, believe it or not, became Obama’s third chief of staff.

Barack Obama doesn’t hate “greedy bankers.” He loves them and loves what they can do for him and he for them. Rumor has it that Obama wants to become “the first billionaire ex-president” — surpassing the greedily astute and still popular Bill Clinton.

So don’t expect Jamie to be unduly disturbed when Eric waves a gun in the air and demands his share of loot. As Marx (Karl not Groucho) said: “History repeats itself, first as tragedy, second as farce.” 

Photo: UPI    

Sign up to receive our latest updates! Register

By submitting this form, you are consenting to receive marketing emails from: The American Spectator, 122 S Royal Street, Alexandria, VA, 22314, You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Be a Free Market Loving Patriot. Subscribe Today!