News & Politics

Jim Hightower: How Low Can the Barons of High Finance Go?

Bankers do not have a legal right to profit.

NEW YORK CITY - JANUARY 01: The landmark Charging Bull. January 01, 2009
Photo Credit: Tutti Frutti / Shutterstock.com

Question: What do you get when you combine ignorance, ideological know-nothingism, imperiousness and incompetence? Answer: Betsy DeVos.

She is Donald Trump's multi-billionaire Education Secretary who hates the very idea of public education and loves the plutocratic idea of corporate rule over Democracy. DeVos presently holds first place in the contest for worst member of Donald Trump's cabinet (a little like winning the title of ugliest toad in the swamp). Her claim to be first among the worst has been buttressed by her bizarre eagerness to shill for one of the ugliest parts of the financial services industry: the Wall Street-backed corporations that lure people into high-interest, financially-ruinous student loans to attend rip-off for-profit colleges.

All across the country, 5 million students -- largely single moms, veterans and other low-income people targeted by this nefarious network of colleges, lenders and collection agencies -- have defaulted on their student loan debt and have had their credit ratings and job improvement prospects destroyed by the profiteering private education system that DeVos carelessly promotes. Her latest favor for them is an insidious new policy she issued unilaterally asserting that her agency can pre-empt any state laws designed to stop the blatant lies and abuses of these loan-servicing corporations. Her bureaucratic claim is that such a state effort to protect student borrowers "undermines uniform administration" of student loans. In her shriveled world laissez-fairy values, you see, program efficiency trumps such basic human values as economic fairness and social justice.

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Heavens to Betsy, what's wrong with this lady? Just in fiscal terms, our nation's student loan debt has ballooned to $1.4 trillion, threatening to blow another big hole in our democracy. We need an education secretary who's smart enough work with state officials, students and responsible lenders, rather than conspiring and cavorting in her department's back rooms with fast-buck educational exploiters.

DeVos is bad, but the bankers she serves are even worse. "Greed is good," proclaimed Gordon Gekko, the lead character in a 1987 film lampooning the low ethics of Wall Street's barons of high finance.

You might think that, surely, this Hollywood portrayal of big banker mentality is a gross exaggeration, but check out an egregious example of Gekko-level greed being pushed by today's finance industry. Big banks like Capital One, Citi, Bank of America and Wells Fargo -- through their lobbying front, the Financial Services Roundtable -- have been going all out to kill a sensible labor department rule meant to protect people's retirement accounts from the self-serving guile of financial manipulators. The rule simply requires firms that manage these accounts to put our money in investments expected to produce the best returns for us, rather than in investments that pay the highest interest fees to them.

It's hardly harsh to require these massive financial institutions to treat us common customers with basic honesty, applying a fiduciary duty that amounts to a Golden Rule for bankers. But, oh, the howls of outrage exploded from the Wall Street baronies, their lobbyists swarmed into Washington and scores of lawyers rushed into courts. To defend their right to be dishonest, the greed-fueled bankers resorted to more dishonesty claiming that the fiduciary rule would hurt "smaller investors."

Huh? Well, they prevaricated; only by misdirecting small retirement savers into high-fee investments can we make enough profit to give "affordable financial advice" to workaday folks. Again, huh? These banks are wallowing in unconscionable levels of profits, but only the affordable advice they want to offer to us is blatantly bad advice, funneling our retirement stash into deals that benefit them at our expense.

Bankers claiming that they have a legal right to profit by deceiving and cheating their own customers is a level of gluttony so gross that it would even gag Gordon Gekko. To fight their absurd claim, connect with Consumer Federation of America.

 

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Populist author and radio commentator Jim Hightower writes The Hightower Lowdown, a monthly newsletter chronicling the ongoing fights by America’s ordinary people against rule by plutocratic elites. Sign up at HightowerLowdown.org.