Monday, February 27, 2012

TBTF's and US Global Hegemony

Sometimes finance executives let slip the way they really feel: that they hold the world in the palm of their hands.It’s not often that the people in charge admit what is really going on: a global game for political dominance. I just saw an interview with Wall Street superlawyer Rodge Cohen, the secret force behind (among other things) the expanded emergency lending power of the Federal Reserve through section 13(3). You know, that’s the law allowing the Fed to lend unlimited sums based on whatever it wants to lend, a section amended in 1991 at Cohen’s behest. He was involved in “more than 17 deals” during the crisis in 2008, including the bankruptcy of Lehman Brothers, the $85 billion AIG bailout deal, and the takeover of Fannie Mae by the federal government. He is, as Bill Black said, the fixer of Wall Street. Here’s his quote, at minute 3:39 ofthis Bloomberg interview:
Hopefully we will not see the major financial institutions in this country disappear because if we do we will also see a loss of ability to influence events not only financially but also politically throughout the world.
Read it at New Deal 2.0
Wall Street Fixer Rodge Cohen: Big Banks Key to American Global Dominance

Explains TBTF in a new light.

1 comment:

Dan Kervick said...

I seem to recall some media stories over the past few years that indicated this is Geithner's view as well. The US is the dominant player in the global financial industry, and financial services are among our top exports. So Geithner had a negative attitude toward proposals to shrink the overall size of that sector. Finance is to the US as petroleum is to Opec.

One of the most frustrating aspects of being a progressive is that a lot of liberals tend to be nice, gentle and cooperative people, and they have an ingrained difficulty in coming to terms with the fact that people who possess great personal power and high levels of official responsibility mainly have that power and responsibility because they are oriented toward the domination and subordination of other people, and are usually quite shameless - and even proud - about that orientation.