The Bankers Don't Get It ...

... but as long as they continue to run things, do they care?

Probably not.

Today's news brings two columns worth reading side-by-side. Over at the New York Times, Joe Nocera asks whether "banks have no shame"; his answer, sadly, is no. Meanwhile, at Salon, Glenn Greenwald refers to bankers as, de facto, "the government's owners."

Nocera is rightly offended that the banks, which were rescued by the government under terms that were "extremely favorable" to them, are objecting to plans for a new consumer financial protection agency. He's upset at the banks for apparently not appreciating what they've received, and he's upset at Congress for not being tougher on the banks. And Nocera's saddened that Barney Frank (D-Mass.) "abandoned the so-called reasonableness standard, which would have forced bankers to make sure their customers both understood the products they were buying and could afford them. Mr. Frank has said that such a provision would put bankers in an 'untenable position.' Yet that is precisely what brokers are required to do when they sell a stock or a bond to their customers. Why shouldn’t the same standard apply to a banker making a mortgage loan?" (The reason, of course, is that Rep. Frank needs the votes of conservative Democrats.)

Greenwald complains that the banks have become the government's owners. He -- like Nocera -- quotes Simon Johnson, a former chief economist of the International Monetary Fund, whose May 2009 article in The Atlantic refers to a "quiet coup" by bankers. Johnson claimed that the U.S. was well on its way to becoming a "banana republic" and argued,

"Top investment bankers and government officials like to lay the blame for the current crisis on the lowering of U.S. interest rates after the dotcom bust or, even better—in a 'buck stops somewhere else' sort of way—on the flow of savings out of China. Some on the right like to complain about Fannie Mae or Freddie Mac, or even about longer-standing efforts to promote broader homeownership. And, of course, it is axiomatic to everyone that the regulators responsible for 'safety and soundness' were fast asleep at the wheel.

"But these various policies—lightweight regulation, cheap money, the unwritten Chinese-American economic alliance, the promotion of homeownership—had something in common. Even though some are traditionally associated with Democrats and some with Republicans, they all benefited the financial sector."

Greenwald agrees, and notes that Sen. Dick Durbin (D-Ill.) has said that the banks "are still the most powerful lobby on Capitol Hill. And they frankly own the place."

It's been a long time since I was so naive as to think that American citizens owned the government, but that banks, despite nearly trashing the economy, could still hold onto the reins of government, is deeply shocking.