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The battle of the Titans
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New York - U.S. politics since 1900 has been a struggle between two competing banking giants, the Morgans and the Rockefellers.
In 2000, the Rockefellers and the Morgans joined forces, when JPMorgan and Chase Manhattan merged to become JPMorgan Chase Co. Today the battling banking titans are JPMorgan Chase and Goldman Sachs, an investment bank that gained notoriety for its speculative practices in the
1920s similar to a Ponzi scheme.
Former
US Treasury Secretaries Henry Paulson and Robert Rubin came from Goldman, and current Treasury Secretary Timothy Geithner rose through the ranks of government as a Rubin
protégé.
Goldman’s superpower status comes from having the ability to manipulate
markets. In 2008 Goldman transformed into a bank holding company. That gave it access to the Federal Reserve’s lending
window; but at the same time it remained an investment bank, aggressively speculating in the
markets. The upshot was that it can now borrow massive amounts of money at virtually
0 percent interest, and it can use this money not only to speculate for its own account but to bend markets to its will.
But Goldman Sachs has been caught in this market manipulation so often that the JPMorgan faction of the banking empire has finally had
enough. The voters too have evidently had enough, as demonstrated in the recent upset in Massachusetts that threw the late Senator Ted Kennedy’s Democratic seat to a
Republican. That pivotal loss gave Paul Volcker, chairman of president Obama’s newly formed
'Economic Recovery Advisory Board', an opportunity to step up to the plate with some proposals for serious banking
reform. Unlike the string of Treasury Secretaries who came to the government through the revolving door of Goldman The battle of the Titans, former Federal Reserve Chairman Volcker came up through Chase Manhattan Bank, where he was vice president before joining the Treasury.
The Morgan side is tired of Goldman Sachs. Not that JP Morgan Chase was
blameless, they did their looting and damage to the system as well, but not in the high handed arrogant way the others
did. The recall of Volcker means the influence of Geithner, Summers, Rubin, et al. will be put on the back
shelf, as will be the Goldman influence. Until recently, US president Obama has declined to support
Volcker, but on January 21 he finally endorsed him. The predictable reaction of
the 'market' was to fall for the seventh day. The battle of the Titans is on.
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