“Most big corporations trade well above book value,” Warren said, referring to the measure of a company’s assets minus liabilities. “But many of the Wall Street banks right now are trading below book value. And I can only think of two reasons why that would be so. One would be because nobody believes that the banks’ books are honest, or the second would be that no one believes that the banks are really manageable.”
Warren’s comment on bank accounting came after she repeatedly — and apparently rhetorically — asked a panel of top regulators to cite the last time they had hauled a big Wall Street bank into court rather than settled. There were mostly halting responses and promises to get back to Warren with more information at a later time. That question — why there has not been more accountability for top bankers in the wake of the 2008 financial meltdown — taps into a deep vein of public anger on both the left and right. And it is Warren’s most potent political weapon.
I don’t think I am the only person who is shouting hooray for Elizabeth Warren, the new senator from Massachusetts. Ms. Warren is a former Harvard Law Professor who is currently taking the banking sector by storm or maybe I should say tornado. She is striking fear in the banking sector of both the big bank CEOs and the regulators. It is about time someone struck back for the people.
When the financial sector did an almost meltdown in the last year of the Bush administration there was rage throughout the country. Especially when the government had to fork over billions of bucks to keep them afloat. It seemed the “too big to fail” tag put on them by both the Bush and later the Obama administrations varnished over the severe faults found in the banking sector. No one was prosecuted or otherwise punished for the gross risks they took in the pursuit of profits or for the regulators who were derelict in their duties in allowing them to do so.
People screamed about the “too big to fail” mantra for a few months and then our government seemed to move on to the next disaster without really addressing this one. Within a year the CEOs and upper management of the big banks were back at the trough getting their million dollar bonuses. It was not until this Harvard law professor went after them that anyone seemed to notice.
I loved the way Senator Warren chastised the regulators who were supposed to protect the taxpayers for not doing their jobs either before or after the meltdown. When she asked them how many Wall Street banks were prosecuted in court they were too ashamed, or maybe a better word was embarrassed, to say that none were; they settled all the matters out of court with usually a slip on the wrist. To me and I hope many of you, I don’t see any difference between what these guys did and a guy who goes into a local branch and robs it. That guy is probably behind bars for the next twenty years while all the bankers are back to doing almost the same things they were before.
Here is to you Senator Warren. Keep up the attacks. I hope you can land some of these guys in jail. That would be the only way that future bankers would learn that actions have consequences and those consequences are jail time for them.