Last night after my book talk in Cambridge, I joined my uncle and cousin for dinner at the Charles Hotel just off Harvard Square, where it so happened that Goldman Sachs was courting Harvard students. It’s the time of year when Wall Street treks to Cambridge to lure bright young things with the promise of big bucks, cachet, and power. Unfortunately, many Harvard students (as well as other Ivy Leaguers) succumb – hoping to become part of the new American oligarchy.
One reason the big banks are so powerful is they continue to dump big money into presidential campaigns. According today's Bloomberg Politics (see below), Citigroup has been Hillary Clinton’s No. 1 contributor during her political career, and Morgan Stanley and JPMorgan are among the top 10 donors to her current presidential run. Which may have something to do with her reluctance to advocate busting up the biggest banks – even though they’ve gone from having 25 percent of the nation’s banking assets in 2007, just before the crash, to 44 percent now. If they were too big to fail in 2008, they’re far too big now. Government regulators say they’ve failed to show how they can be effectively wound down in the next banking crisis without another bailout.
If our economy and our democracy are to remain safe, the biggest Wall Street banks must be broken up. Bernie and Elizabeth Warren are pushing for this. Hopefully Hillary will see the light as well.