Why are there no banking statesmen is a question I’ve asked before. 

The Wall Street leaders in banking and finance today are virtually unanimous in their unrestrained zeal to fight financial reform as hard as possible while whinnying about being picked on and not appreciated.  Until he recently lost $2-3 billion in high risk leveraged bets on synthetic derivatives, JP Morgan Chase CEO Jamie Dimon was the poster child for this benighted and, ultimately, self-defeating view, but he is no means alone.

With so many worldwide still suffering from the worse economic downturn since the Great Depression of the 1930s, with unemployment and foreclosures at historic highs, with poverty rising and the middle class declining, with hopelessness again ever-present at too many family tables, with dreams deferred or just dead, rich-beyond-Croesus Wall Street bankers are self-centeredly complaining about how tough they have it. 

Yet, not one Wall Street executive has stepped up and stepped out to say that their industry contributed overwhelmingly to the financial crisis of 2008, that it cost this country and the world dearly, that most of the those costs were shifted to society and taxpayers from the financial industry and bonus-bloated bankers.  Not one has said that they recognized this and that they were genuinely going to work with governments to reform finance and make it safer, stronger, and less prone to crisis, and honestly make sure that taxpayers would never again have to bail them out from their reckless activities.  (True, many say this, even Jamie Dimon, but that’s not what their executives, lawyers, lobbyists, front groups, trade groups, purchased academics and campaign contributions say.)

Not one malefactor has said any of this.  Indeed, they all circled the wagons, loaded up on paid mercenaries, oops, lobbyists and lawyers, and began a massive, comprehensive strategy to defeat financial reform: 

First, fight any real reform legislation while trying to pass misleadingly named legislation to gut, weaken or kill reform.

Second, fight every rule to implement that legislation.

Third, sue in court to stop any rule they didn’t like.

Fourth, fund and elect as many anti-reform politicians as possible.

Fifth, get those politicians to do whatever they can to roll back reform, harasses financial regulators and defund them.

Sixth, delay as much reform as possible in the hope to get past the November 2012 elections, when they plan on a bank-friendly Senate and President to join the already largely anti-reform House majority and, together, they would deliver the final coup-de-grace to financial reform.  Say what you want about Wall Street, they know which politicians to invest in and they usually get a pretty good return on that investment. 

No leader of any Wall Street or too big to fail bank or financial institution has stopped this defeat-financial-reform-at-any-cost strategy.  They all parrot the same talking points, pay the same lawyers and lobbyists, fund the same trade and front groups, and contribute to the same anti-reform politicians.  And, they all blame regulation for everything bad, from the economy to unemployment to their own poor performance.  

If this strategy is successful, as a similar one was in the decades before the financial catastrophe of 2008, the restraints would be off, the cops would be taken off of Wall Street beat, and bankers would be able to do as they please while stuffing their pockets full of as much cash as possible – again.

However, sealed off from reality in their riches-bought insularity, surrounded by high-paid like-minded sycophants, and singing “Happy days are here again,” the Wall Street bankers would be blindly dancing to Armageddon because, as has been proved repeatedly throughout history, unregulated and unrestrained bankers are their own worst enemy.  Ultimately, this Hobbesian state of banking would be self-defeating and another financial collapse inevitable. 

The backlash after the next financial calamity will make the Dodd Frank Act look so mild that many will wonder if it was written by bankers themselves.  Handcuffs and prison sentences will not likely be in short supply next time.  Claw backs of billion dollar bonuses will be the norm, as one mansion after another is put on the auction block.  That’s the future of Wall Street after their next reckless, unregulated splurge.

What about banking?  The Financial Times was right to point out that “those who attack bankers often forget how essential the core activities of a financial institution – the payment systems and deposit-taking – are to the functioning of a modern economy.  Even investment banking – sometimes maligned as ‘socially useless’ – has a part to play.  Many derivatives do help companies and individuals manage real business risks.”  All true, but those traditional and socially useful banking activities are too often an afterthought and little more than window dressing behind which a Wall Street focused obsessively on getting the biggest bonuses hides their biggest, most irresponsible bets. 

That’s the Wall Street-finance culture that has to change and that’s going to require statesman-like leadership from within or prison sentences from without.  

Anyone interested in being a statesman should begin by reading Bloomberg’s editorial “Don’t Give Up on the Sensible Ideas of the Dodd Frank Act,” which concludes that the Dodd-Frank Act has “an elegant core of sensible ideas” and should be considered “a fail-safe system with three levels of containment.”