Back in the 1960s, there was an absurd TV ad campaign that stated “Remember…you have a friend at Chase Manhattan.” I knew that wasn’t true even then. And things certainly haven’t improved.
Frank Pasquale delves into the ongoing mess in the housing sector created by banksters using predatory loans and unprosecuted fraud, contrasting their lack of accountability with the “draconian treatment” of poor people in public housing who have been evicted for crimes they didn’t commit via a one strike rule.
The critical conceptual issue here is to begin to see the banks as a sector as permanently embedded in a web of state subsidy and support as health care, defense, and energy. Mintzberg convincingly complains about “the energy companies with their cozy tax deals, the defense contractors that live off government budgets, and the pharmaceutical companies that buy their innovations and price what the market will bear, thanks to patents that governments grant, but without policing their holders.” I also worry about all these sectors. But it may well be the finance sector that is the most menacing to economic growth, and the least accountable. We cannot simply accept lawlessness in the sector as the status quo. Creative and forceful responses are possible, and have precedents both historically, in other nations, and in other sectors in our own economy.
*Source: Jolly Banker by Woody Guthrie