“The emancipation of the working class will only be achieved by the working class itself.” — Karl Marx
Oct 6, 2008
As the financial crisis has worsened, three of the biggest financial companies in the world, Citigroup, Bank of America and J.P. Morgan Chase, have emerged much, much bigger and more dominant.
The Big Three banks, as they are now called, have gobbled up other enormous financial companies weakened or bankrupted by the crisis. Bank of America snapped up First Countrywide, the largest independent mortgage company and then within a matter of a few months, gorged itself on Merrill Lynch, the largest brokerage company in the country. Not to be outdone, J.P. Morgan Chase took over the bankrupt giant investment bank, Bear Stearns, and then, for its main course a few months later, swallowed up Washington Mutual (WaMu), the largest savings and loan already sunk in bankruptcy. Finally, Citigroup, which itself has been plagued by record losses and debts, tried to buy up Wachovia Bank, the nation’s fourth largest commercial bank. But since Citigroup would have paid almost nothing for Wachovia, Wells Fargo jumped into the bidding, hoping to snare its share.
These were the ultimate back room deals. Massive government intervention helped these financial giants gobble up their weaker cousins.
Many of these takeovers took place in only a couple of weeks of financial panic at the end of September. Thus, not all these deals have yet been completed. But if all the deals do go through, three enormous bank companies will control almost one-third of all deposits held in U.S. commercial banks and thrifts, up by almost 50% in just a few months. Other aspects of financial and banking services in the country – home mortgages, auto loans, credit cards, brokerage services, corporate services – will come under near monopoly control. No doubt, they will also dominate even more the international financial machinery, especially since the U.S. economy remains by far the largest in the world, with their investments and sales overseas greater than the entire economies of most nations.
This sharply rising concentration of wealth and control by a tiny handful of banking companies puts the lie to all the fairy tales about “rescuing the whole economy” and all of us with it.
On the contrary, the growing monopoly control by a handful of financial companies can only mean that the vast theft from the population will get much worse. These companies will try to use their very immensity to make consumers pay in every way possible – to make already outrageous loans and fees even more expensive, to squeeze depositors with even less interest on their savings.
These companies already dictate their own terms to the government. And the dead hand of monopoly control can only lead to more stagnation, decline and crisis.