Robert Reich
Congress approved the Dodd-Frank Act financial reforms in 2010 to prevent a repeat of the risky trading by large banks that almost brought the economy to its knees in 2008. But the banks lobbied against resurrecting the Glass-Steagall Act and against capping the banks' size. The compromise was a weaker version, known as the Volcker Rule -- but not even that Rule has seen daylight yet because of bank lobbying led by JPMorgan Chase and its CEO, Jamie Dimon.
This morning the Senate Permanent Subcommittee on Investigations released a 301-page bipartisan report on derivative trading at JPMorgan since the crash, showing the bank's so-called "London Whale" losses last year -- using, in part, commercial, federally-insured deposits -- were "so large they roiled world credit markets.... The bank then misinformed investors, the public, and policymakers about the risk and total losses even after the disastrous trading became public."
In other words, Wall Street continues to do what it did before the near meltdown -- which means another tax-payer funded bailout is on its way unless Tea Partiers, Occupiers, Democrats, Republicans, and concerned citizens demand Glass-Steagall be reenacted and strict limits be placed on the size of the biggest banks.
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