Once upon a time, I had the audacity to stretch the limits of what was possible. I grasped for what was just out of reach.
I even realized over time that what I wanted wasn’t exactly what I’d get…
The woefully underpowered BB gun was a bittersweet victory, one that took years to come to fruition; and the remote-controlled helicopter never materialized.
My parents’ foresight of future medical bills trumped all, but it never stopped my wildly ambitious Christmas wish lists. Over the years, I have stopped wishing for anything that wasn’t practical or modest.
Looking back, I can’t help but feel something was lost.
Some wishes may be self-serving, but would ultimately serve us all. Certainly taking the time to dream of what could be has some merit, if only to define and refine our wish list to include the things we truly need.
Being that it’s Christmas Eve, today I want to talk about three things that are just out of reach, but that we all should want and deserve.
Are they too much to ask for?
Banks that Bank Something (Besides Profits)
The six largest banks in the United States — JPMorgan Chase, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley — have collectively gotten 37% larger since the recession they fueled started.
The U.S. banking system has $14.4 trillion in total assets. These six largest banks own 67% of those assets.
The truth is these institutions are hardly banks anymore...
Right now, four of the “too big to fail” banks each have total exposure to derivatives well over $40 trillion. Goldman Sachs’ exposure to derivatives is over 281 times more than their total assets.
These banks own oil pipelines, power plants, metal and commodity warehouses and distribution systems, and ocean-based shipping companies. The list goes on, and it grows more disturbing.
There are 6,885 other banks, the lowest level since at least the Great Depression. These small players are being ravaged by rules that squelch competition and reward risk.
The manipulation we’ve seen in Libor, Eurobor, securitized mortgage-backed investments, metal warehousing, silver and gold, and virtually everything else of value paid off. HSBC’s nearly $700 billion of money laundering for terrorists and drug cartels was profitable.
Selling securities designed by those who know they will fail and bet against them has been justified. Quarterly earnings and the fear of the “regulators” to fulfill their oaths to enforce our laws prove it: You can count the number of people involved that even had to admit wrongdoing on one hand.
These “banks” double-dip for higher profits using our deposits and virtually interest-free tax-dollar loans. Volcker rules are already being circumvented.
The only people who aren’t profiting from the use of our wealth and capital are the people that inject anything of value into the system.
Isn’t it time we reward the small banks that have always been far better at managing their books and serving their customer?
Banks with $10 billion or less in assets control under 20% of all bank assets, yet account for just under 60% of small business and personal loans. But the rules are stacked against them and in the favor of the massive, global financial institutions that pretend to be banks as they ratchet up leverage and risk in industrial companies and exotic derivatives.
I wish the smart, responsible, and boring banks received preferential treatment.
Is that too much to ask?
Eyes on the Horizon
CEOs need to prove their worth to boards and shareholders. Politicians need to do the same to voters.
How often does that work for meaningful long-term goals through two-, four-, or six-year terms?
When it comes to corporate executives, I am far more understanding…
The board and shareholders approve the terms of a contract for an executive in charge of delivering value and profits. They have the right to reward their employee as they see fit. And ultimately, investors have the choice to dump a corporation’s shares if they disagree with management.
For politicians, I am far less forgiving. There is no vote of confidence or way out if the system doesn’t serve you at all.
The two-party system is being corrupted through a race to the bottom. Incentives only exist for beating the competition by one vote while suppressing any disruption to the status quo. Political parties don’t have to shoulder this burden. They bury any alternative options.
Political debates on television are controlled by a jointly owned corporation created by Democrats and Republicans. Campaign finance rules, redistricting measures, ballots, debates, and every other obscure means possible are used to reinforce this duopoly.
How else could Congressional approval rates drop to 9% if they didn’t create a power vacuum that cannot be filled by outsiders?
With this in mind, I’m not surprised that both parties cannot stop spending our future tax dollars. While the current administration has been worse than others, very few politicians who have made it to Washington, D.C. amount to more than failed Keynesians.
John Maynard Keynes’ theories involve two inseparable parts: Governments can invest in infrastructure and other capital-building programs to bolster a shrinking economy. When the economy is stable, governments then need to create a surplus to pay off debt and rebuild their cushion for the next crisis.
Instead, the power to spend corrupts. On our own behalf and on our children’s, future tax dollars are being sapped by interest payments because Keynesian countercyclical spending only happens when times are bad.
What the U.S. needs is a political system that encourages alternatives and outside intervention in what has clearly become an unprecedented power vacuum.
What we need is a third (and ideally a fourth, fifth, or sixth) option to find a way out. We do not need more bailouts for the strongest lobbying groups to add more debt that we the people will ultimately pay off.
Is that too much to ask?
A New Hope
In these trying times, it is easy to turn on each other. It is easy to settle for the scraps left over from the feeding frenzy of the 1%, and mask apathy or complacency within a shroud of pragmatism.
There are many holidays and religious events this time of year.
Regardless of your religious beliefs — even if you hold none at all — I hope you can appreciate this about Christmas…
This season it is fundamentally about someone or something wiser than us knowing that we are worthy of something better than what we make for ourselves.
It is about renewed hope.
I lost something when I stopped wishing for anything just out of reach. I stopped thinking about what I wanted, regardless of the likelihood of me obtaining it.
This is a far more dangerous thing than we might realize… because it is vital that we take the opportunity to spell out what matters to us — and what it is we must do to achieve or obtain it.
In the end, I have one last wish to make: I hope you’ll pause this time of year, when it is the darkest and coldest, to dream and wish for something that’s a bit of a stretch.
