Reeling Wall Street Not Ready for Alexander Hamilton's Return
When the LaRouche movement's rally for Alexander Hamilton's credit principle hits Wall Street later today, it will confront a reeling bunch of Wall Street bankers.
Some 50,000 of them have lost their jobs just in the last quarter of 2014, according to the Jan. 19 New York Post, with Bank of America letting go 20,000, and Citibank and JPMorgan Chase 10,000 each. This followed what one bank analyst cited by the Post called
"the worst set of quarterly revenue reports in eight decades,"
which the Post in turn characterized as "a shocking throwback to the Great Depression." The analyst said the layoffs are continuing:
"headcount would get significantly reduced."
At the same time the Dallas Federal Reserve on Jan. 12 projected a probable loss of 140,000 jobs in the energy sector in Texas alone in 2015, although it somehow also forecast that job growth in the Texas economy would continue at some level. In a Seeking Alpha article on this, Wolf Richter listed some of the layoffs underway: 9,000 at Schlumberger; Suncor Energy 1,000; Halliburton 3,500.
With all the big banks facing more losses from the oil debt meltdown and its associated derivatives, the idea of "break-up" has again taken the stage. There are forecasts, like that of Christopher Whalen in a Bloomberg interview Jan. 17, that the Wall Street banks will break up fairly rapidly by selling off units, their hands forced by their stockholders and their falling stock prices.
That process, even if it materializes, would be chaotic, as well as economically useless for any purpose other than well-deserved Schadenfreude directed at Wall Street. The big banks might get split into smaller pieces every bit as toxic, with securities plays and derivatives exposures still in the commercial "depository" banks.
What is needed is Glass-Steagall break-up of the banks by function, separating the thousands of bankrupt speculative units from their commercial-bank "hosts" and letting them go bust. This will produce banks at least capable of lending credit into the real economy.
But this is Hamilton's credit principle. Does Wall Street fear it more than another 100,000 or so layoffs?