Erin Burnett, CNN's new talking head, is incorporating a segment into her new show entitled "Strike Force," where a bunch of business types with whom Burnett is quite comfortable come on and answer really, really tough questions regarding our bad economy and what they will do about it.
20 CEOs, investors and entrepreneurs that I picked to answer the tough questions about the economy this election season.
I'm sure they'll speak from the heart and get to the root causes of why we're in this situation and how we can get out of it. Burnett is right that Americans on the left and the right are angry at Washington; but we're fundamentally different in our view of governance. As for hating the bailout of the banks, liberals are angry for different reasons than conservatives. Many of us believed that there was a big problem in the global financial markets, but as my interview with Naomi Klein revealed, we wanted Obama to come up with his own bailout plan which would include tough measures installed so that Milton Friedman disaster capitalism would not keep hold on our economy. We wanted accountability and hearings to get to the root causes of the crisis, prosecutions when necessary and reform Wall Street regulations so that banks and the financial sector could no longer destroy the world with greed. Once Glass Steagall was destroyed by the Gramm–Leach–Bliley Act, (Wikipedia is being hacked on this issue) banks were able to start gambling away our money and grow too big to fail.
Back in the old days of the movie It's a Wonderful Life, bankers were portrayed as the enemy of the common man. Scheming executives found loopholes to steal farms and homes away from families. After the Great Depression, regulations placed in by the government caused banks to lose some of their power and they weren't scorned nearly as often. Burnett proclaims on her show quite loudly that banks are the good guys in all of this because they employ so many people and we need them to create jobs so we should root for them. I guess she forgot all the corruption during the foreclosure frauds banks carried out.
Burnett: Well, Wall Street protests are growing. New York, Los Angeles, Seattle, San Francisco, Albuquerque -- you're looking at shots of all of them now. There is something here reminiscent of the early days of the Tea Party, which actually shares some things in common with the Wall Street occupiers. They're both grassroots organizations, from the ground up. They're both angry at Washington.
And while most participants are sincere, there is hate in both groups. Most important, while they're on opposite sides of American politics, they agree on something huge. They both hate the bailout of the banks and share animosity to the banks in general, which we think is a sign of a real issue because banks should be great for America, never mind what we do without ATMs and places to store our money.
Banks mean jobs. Banks in America--and there are more than 7,000 of them--employ almost 1.8 million Americans, more than America's largest private employer, Walmart. Banks employ so many people that one bank's lay-off can skew the jobs report for the entire nation. I'm talking about Bank of America, which laid off 30,000 employees in September, almost a third of the nation's total planned job cuts for the month, so we should be rooting for the banks.
The problem is they make it really hard when they lash out at Washington's new rules by slapping fees on consumers. And I mean there is a tsunami of fees. Citibank hiking fees today again, set to charge $20 a month for accounts between six and $15,000. Bank of America and Sun Trust, $5 debit card fees, JPMorgan Chase and Wells Fargo testing $3 debit card fees. Well, I asked Treasury Secretary Tim Geithner about this last night.
[Geithner quotes]
BURNETT: The banks say Washington reforms have hurt them so much that the fees are the only way to make money. But that is not true. Take Bank of America. They are planning to put a $5 monthly fee on debit cards. And analysts who ran the numbers today for us tell us they will make 13 percent more money on that than they did before the regulations and that's just debit fees.
Bank of America is also launching $9 monthly fees on some checking accounts. Wow.
In this particular point she is correct: Fees are ridiculous. Good for her. In response to her, Strike Force guest City National CEO Russell Goldsmith says he won't raise his bank's fees like BofA so please, love him. However, he's very upset at Durbin's law, which limits fees consumers pay to banks, which Citi has employed as much as Bank of America. Good thing he had plenty of airtime to bitch and moan about it. And what's his solution to make Americans feel better?
BURNETT: And what can the banks do, in general? Because I mean we're looking at the fees here specifically, which I have a real issue with because they're saying they just make up what they're, you know, what they're losing on the regulation and clearly when you look at the numbers, at least in the case we gave specifically, it doesn't appear to be the case at all, but on top of that you have just in general it feels like an animosity and a tone-deaf nature especially when you're looking around the country at people who are frustrated and angry at the banks. What should your industry do right now? Is this a time where you should have all of the big bank CEOs stand up and talk to the protesters or do something to say we're patriotic and want to build this country, too?
GOLDSMITH: Well, I think you know I'm here talking to you, trying to explain that at City National we're not doing what some of these big guys are doing. Unfortunately this inappropriate law, this price fixing got passed in the middle of the night. There are no facts and nobody knows what the facts are, and the banks obviously can't sit down as a group and agree on pricing.
Wow, the ego on this guy. When she asked how he could act patriotically, he basically said that "I appeared on your show, Erin. Doesn't that count?"
And he wonders why there's so much anger directed at these banks and their suits. What a jackass.
