A two-year Senate investigation of the financial sector has found that banks can meddle with the economy in new and frightening ways.
The investigation was led by Carl Levin, D-Mich., and looked specifically at the impact of investments on the prices of certain commodities—things like oil and uranium.
Deregulation made it possible for firms such as Goldman Sachs to outright buy commodities and commodity suppliers. For instance, Goldman owns a coal mine in Colombia. And that fleet of 100 oil tankers? It belonged at one time to Morgan Stanley, which also held 55 million barrels of oil storage. JPMorgan Chase, according to The New York Times, once owned 31 power plants.
These are some of the same institutions that profit from your credit card debt when the price of oil goes up.
There are myriad other conflicts of interest, and general vulnerabilities besides.
John McCain, R-Ariz., made this excellent point, as recorded by the Times:
“Imagine if BP had been a bank,” Senator John McCain said on Wednesday, referring to the Deepwater Horizon oil spill that for which BP has had to pay billions of dollars in damages. “It could have led to its failure and another round of bailouts.”
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