Send a Tweet
Most Popular Choices
Share on Facebook 1 Share on Twitter Printer Friendly Page More Sharing
Exclusive to OpEdNews:
OpEdNews Op Eds   

Bad Boy Bankers: Learning From History

By       (Page 2 of 2 pages) Become a premium member to see this article and all articles as one long page.     (# of views)   No comments
Author 31242
Follow Me on Twitter     Message Monika Mitchell
Become a Fan
  (8 fans)
Sandy Weill's successful lobbying resulted in the creation of what Charlie Rose called, "the biggest bank in the history of the world."  Two months after the collapse of Bear Stearns, Weill defended the global "financial supermarket."  He bragged to Rose, "They were able to raise $44 billion in capital at Citibank, because people believed in the model."

But dreams die hard. Sandy Weill's vision of superbanking stardom has gone the way of the American Dream-out of sight and out of reach.  In May of 2008, worried over the rapid tanking of his Citigroup stock he told Rose, "I'm scared."  Mr. Weill, as we look at the rubble of our banking system caused by banks using federally insured depositor money to gamble on risky toxic investments, so are we.

As taxpayers injected $45 billion dollars of emergency cash in exchange for 36% of common Citigroup stock that even Weill no longer wants, the American public belief in the financial supermarket model has vanished.  It has gone the way of the Titanic. Looks great in the Harbor, but sinks when it sails the seas.

In 2006, Weill announced he was leaving finance for good to honor his "deal with God." He pledged $1.4bn dollars to philanthropic works like medical research. As Citigroup stock hovers around $1.39 a share, from a high of $55, Weill must be deeply regretting that pledge now.

Shortly after the Glass-Steagall Act was repealed, Weill's political friend Robert Rubin left the U.S. Treasury to join him at Citigroup as co-chairman of the Board of Directors. Earning $115m over his nine years on the board, Rubin is blamed by many for failing in his fiduciary duty to advise the bank on the perils of toxic credit derivatives and subprime mortgage securities.  To the frustration of shareholders, fellow board members and taxpayers, the former U.S. Treasury Secretary has refused to take any responsibility for Citigroup's financial woes.

This economic crisis has unequivocally proven that Sandy Weill and Robert Rubin do indeed have the "deal with God."  It is the same deal every other money manager of a banking institution has, and it does not involve giving millions to plaster your name on the walls of great institutions.  

Banking officers hold a sacred trust over other people's money. They are charged with using borrowed funds for careful investments for shareholders, depositors and ultimately taxpayers. A manager of billions of federally insured dollars has in his or her hands the grave financial and moral responsibility to manage these funds with the understanding they do not belong to you. They ultimately belong to the American people. Your "deal with God" is to honor that solemn trust and not "take them dives for the short-end money," as Terry Malloy would say.

Ten years after Phil Gramm uttered his fateful words, they are revealed as tragically flawed.  The economic crisis shows we do indeed need government "overriding" the free markets. These days the government seems to be the only answer for insuring free markets remain free for all, not just a few dreamy bankers, but for ordinary dreamy Americans too.

Only it must be a "government" that is trustworthy, not quasi-bankers whose self-interests are allowed to endanger national interest.

Next Page  1  |  2


Rate It | View Ratings

Monika Mitchell Social Media Pages: Facebook page url on login Profile not filled in       Twitter page url on login Profile not filled in       Linkedin page url on login Profile not filled in       Instagram page url on login Profile not filled in

Monika Mitchell is the Chief Executive Officer of Good-b (Good Business International)a leading new media company xcelerating the movement for better business for a better world.
Go To Commenting
The views expressed herein are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.
Follow Me on Twitter     Writers Guidelines
Contact AuthorContact Author Contact EditorContact Editor Author PageView Authors' Articles
Support OpEdNews

OpEdNews depends upon can't survive without your help.

If you value this article and the work of OpEdNews, please either Donate or Purchase a premium membership.

If you've enjoyed this, sign up for our daily or weekly newsletter to get lots of great progressive content.
Daily Weekly     OpEdNews Newsletter
   (Opens new browser window)

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

Ditching Grandma: Reexamining the Era of Economic Irresponsibility

Do Republicans Hate Small Business?

Joseph Stiglitz: America Has Created Two Economies

Just Say Uncle: Sociopaths & Finance

Living on Credit: A Natural Phenomenon

Bernanke: Fed Bailout Creates Two Societies