OUT-OF-CONTROL BANKERS

  “I do not think you can trust bankers to control themselves. They are like heroin addicts.”


 – Heroin addicts can destroy both an individual and his family. Bankers can destroy themselves and an entire nation’s economy. Bankers are entrusted with an enormous amount of other people’s money and should be conservative in investing it, but what often happens is that they use the money they have been entrusted with to leverage up—borrow more money—and then speculate with it under the guise of “investing.” They do so because if they win the bet they get to pay themselves millions of dollars in salaries and bonuses, all along telling the American public not to worry about the leverage because professional risk managers have it under control (the same professional risk managers who just happen to be the ones who destroyed their Wall Street banks in the subprime mortgage meltdown of 2007–09). The only thing that can stop banks from becoming excessively leveraged is heavy regulation by the US government, which banks constantly fight to keep from happening. In 2014 alone JPMorgan Chase spent $6.2 million lobbying the US Congress. Collectively, in 2014, commercial banks spent $60 million lobbying Congress. What did they lobby against? Government regulation of the banking industry. The point that Charlie is making is that a great many bankers have become addicted to leverage and speculation; it is the lifeblood of their quest to become both rich and powerful. 

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