Banks and Regulation In The Age Of Alice

Alice in Wonderland.

The only way I can come to terms with the new world order is to imagine myself trapped in some alternative place where up is down and down is up. Perhaps you know of such a place. It’s called America.

How else do we justify the governor of Maine’s decision to strip a mural honoring the workers of that state from its Department of Labor? This is the state where Rosy the riveter, that World War II icon, actually lived. So too did Roosevelt’s Depression era Labor Secretary. A woman by the name of Frances PerkinsI might add, and the first woman to occupy high cabinet office in the US. The offending mural honored both these Maine notables among others.

And the offense of this mural? It wasn’t that the it honored worthy Maine folk. No, it was too biased towards labor. Yes it was in the Maine Department of Labor’s building, and it was about labor like stuff, such bias is simply no longer tolerated in this Tea Party world. The new governor being a Tea Party activist wants the mural removed because it offends business people. It suggests that Maine might be pro-labor. Which, in his mind, means anti-business. So the Maine Department of Labor must shed its pro-labor mural. And to add effect, it must name its rooms and spaces after more business supportive things like local mountains and flowers.

Nothing like having a red knuckle negotiation in the Daisy Room.

Oh, wait, there won’t be any such negotiations. They’re far too confrontational. We must not offend business.

In which case I hope that the good governor doesn’t visit Washington. There he would find that the Federal Labor Department is housed in the – gulp – Frances Perkins building right across from the – gulp even more – Roosevelt memorial. No wonder Washington seethes with socialism.

And before the governor sets up a new Department of Business, may I remind him that that would be redundant. His entire government is a department for business.

Then there’s the case of the Republican Senator, name withheld, who is up in arms over the heavy hand of our banking regulators. He is incensed that those regulators are not helping our banks more. Instead they seem to be setting and monitoring all sorts of rules. Rules that get in the way of our fine banks doing business and making profits. Can you imagine that? The regulators actually regulating? In the good Senator’s mind the government is in business to facilitate business. Not just any business mind. But all business. Apparently we had it all wrong. Regulations exist to grease the way forward for business and not to impose limitations or burdens. They cost money and reduce profit. And America Inc. is all about profit. Like China Inc is. Speaking of which, no wonder the Chinese are eating our lunch. They have no regulation. If lead is good for their toys, then it’s good for our toys too.

It is in this topsy turvy world that the Federal Reserve Board has agreed to allow some, but not all, big banks to start paying dividends again. After all why would a bank need lots of capital? No reason that the Fed can think of. This odd decision comes after the Fed put the banks through another round of stress tests and found that they are now strong enough to reduce their capital from current levels. May I remind you that those Fed stress tests are neither stressful, nor really much of a test. They are more like afternoon teatime with a dowager aunt. Pleasant and bland. Nonetheless they are the basis upon which the banks are now to be allowed to give back capital in the form of dividends to their shareholders. Apparently the only people in America who can legally rob a bank are the bankers themselves.

Ah, such is life in Tea Party America. Government is by the business for the business. Government is simply meant to facilitate profit and to keep disgruntled workers from annoying everyone else.

As I said, the Age of Alice is upon us.