"Too big to fail" is too big, period!

Before Republicans and a few Democrats began deregulating the United States economy to hell, we had the financial and business equivalent of traffic cops who actually did their job. And we had laws with teeth that gave financial cops the authority to do that job.

Their job was to keep the equivalent of drunk drivers at the heads of corporations like Merrill Lynch, Bank of America, General Motors and others from letting their companies get so big that their intemperate greed and dunderheaded incompetence could sink the entire nation.

It’s time to bust up the banks,
the brokerage companies, the car makers
big drugs and big nationwide utilities

When we had the Glass-Steagall Act, financial institutions had to make a choice. They could be in the investment banking business, the savings bank and mortgage loan business, or the checking account and business loan business. Pick one.

That ended, under the Democratic Clinton Adminstration I’m ashamed to say, but under fierce pressure from a then-Republican Congress. It’s time to restore Glass-Steagall. But that's just for starters.

There was a time when every bank had 50 choices of the state where it wanted to do business. But every bank could only do business in one state. That kept banks local and fairly responsive to the needs of their local constituencies.

The town banker knew the town merchants. The savings bank knew their mortgage customers. Any local bank that began handing out fly-by-night loans would self-destruct, the banker would get driven out of town on a rail, the depositors would get paid off by FDIC insurance, the taxpayers would be in the hole but only for chump change relative to the mess we’re in now, and that would be that.

Strictly local banks were never too big to fail. But most of them were too smart to fail — because they were smaller, more agile, and more aware of what was going on their markets. It’s time to revert to local banking. Let Bank of America, and Chase, and Wells Fargo, and what’s left of the mess that’s Citibank each pick a state, any state, and do business there. And then get the hell out of the other 49 states.

Shrink banks and you'll shrink
bonuses and credit card interest

That one move will eliminate greed-driven bank managements because there simply won’t be enough money there most of the time for double-digit million dollar bonuses. It will eliminate the probability of massive bailouts of banks too big to fail. It will simplify the audits that state and federal bank examiners ought to be conducting every year. And it will keep banks out of the stock market, and vice-versa.

Oh, and by the way, it will bring credit card interest rates and penalties back under the control of the states, which in many states will mean the end of outrageous 30% credit card interest rates and heads-you-lose, tails-you-lose “terms and conditions.”

Give General Motors
a general bustup

General Motors? It would be a lot less of a threat to the economy if instead of General Motors we had a Chevvy Motors, a Buick Motors, a Cadillac Motors and a Saturn Motors, each with its own board of directors and its own more agile management to respond to its own market. If we did that to each of the “way-too-big three,” you can bet that, for example, Ram Motors would be doing okay now, even as Chrysler Car Motors sank like a shot, its market quickly taken over by somebody who wants to build an electric hybrid instead of a soused-on-petroleum SUV.

We still have a Sherman Anti-Trust Act. Breaking up the Big Three automakers is the sort of thing it was designed to do. Mr. Obama , get out that Sherman hatchet and start chopping up car companies.

The Sherman anti-trust act was used against AT&T back in 1982. Suddenly, instead of a single sleepy telephone monopoly, we had lots of little regional phone companies competing. Before you could hiccup we had cell phone networks, phone companies competing with cable companies, cable companies competing with phone companies, and rate wars. But then guess what happened?

Laissez-faire economics is what happened. The so-called “Baby Bells” starting merging. Rates went up. And now the cell phone innovations are happening at Apple, not New York Telephone. No wait, New York Telephone became part of Bell Atlantic. No wait, Bell Atlantic got swallowed up by NYNEX. It’s time to start un-merging them again — and the cable companies along with them.

Big Pharma? It’s a few corporate behemoths, their huge, powerful hands maintaining a choke hold around the necks of Congressmen and Senators that are keeping drug prices in the stratosphere. Break the bastards into a thousand little pieces. We’ll get smaller, smarter, faster-moving, more innovative pharmaceutical companies — and better drug prices while we’re at it.

Demand an end to
Socialism for corporations

Breaking up big business, regulating it into behaving as if it belongs in a civil society, detoxifying it so it can’t poison the economy and steal your job — that isn’t Socialism. On the contrary, it would be the end of a bigger evil, Corporate Socialism.

Small business that’s small enough to fail is capitalism. Let’s demand some capitalism for America, despite what those conservative Republican Socialists say.

Are you listening, Mr. President? And what about you, Congress?