by Pam Martens and Russ Martens, Wall St On Parade:
Robert B. Reich, the former U.S. Labor Secretary under President Bill Clinton, a bestselling author and Professor Emeritus at UC Berkeley, penned an essay in May on why billionaires should not exist. Reich declares that there are only five ways someone can become a billionaire. (Reich narrates his essay in the video below, complete with cool graphics.)
Reich lists the following five methods of becoming a billionaire: (1) exploit a monopoly; (2) exploit inside information; (3) buy off politicians; (4) defraud investors; (5) get money from rich relatives.
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You are likely thinking that there is nothing wrong with inheriting wealth from a rich relative. But if the money is inherited from a billionaire relative, it means that he or she likely got that wealth through one of the first four methods. Thus, dirty money is simply moving from generation to generation. That’s our thought; Reich has other thoughts on the matter involving the wealthy using tax loopholes “lobbied for by the wealthy.”
Another way to think about that is the reality that the old Mellon bank wealth, a chunk of which was handed down to Tim Mellon, enabled him to write a check for $50 million in May to a Super PAC supporting Donald Trump for President. That check came on top of tens of millions more that Mellon had already contributed to the same Super PAC in this election cycle. And, it was billionaires who pushed for and won the Citizens United decision in 2010 at the corrupted U.S. Supreme Court that made that $50 million political donation possible from one man.
Super PACs are also a key source of the hate and divisiveness that has engulfed the United States since the ironically-named Citizens United decision was handed down in 2010 because these Super PACs strategically run hateful attack ads against the opponents of the candidate they wish to install in public office.
But what we really want to focus on is how the repeal of the Glass-Steagall Act in 1999 by a fat cat on Wall Street, together with sycophants in President Bill Clinton’s administration, and cheerleading from the New York Times’ Editorial Board, has created a whole new method of becoming a billionaire without any risk of jail time, while undermining the safety and soundness of the U.S. financial system. We’re talking about obscene stock option compensation at the megabanks on Wall Street.
The repeal of the 1933 Glass-Steagall Act in 1999 allowed the trading casinos on Wall Street to merge with deposit-taking commercial banks – a practice which had been banned for 66 years because it was responsible for the 1929 stock market crash, thousands of insolvent banks, and ensuing Great Depression.
Just nine years after the repeal of the Glass-Steagall Act, Wall Street collapsed in the worst crisis since the Great Depression, taking the U.S. economy and housing market along for the ride.
The chief architect of the repeal of Glass-Steagall, Sandy Weill, was still listed as a billionaire by Forbes as of three years ago. This is how he became a billionaire:
Despite it being illegal at the time, in 1998 Weill combined his Travelers Group with Citicorp, the parent of the federally-insured commercial bank, Citibank. Travelers Group consisted of a large insurance company, an investment bank (Salomon Brothers) and a retail brokerage firm, Smith Barney. It would become the first of the megabanks (“universal banks”) on Wall Street.
The New York Times’ Editorial Board heralded the illegal and dangerous combination with this on April 8, 1998:
“Congress dithers, so John Reed of Citicorp and Sanford Weill of Travelers Group grandly propose to modernize financial markets on their own. They have announced a $70 billion merger — the biggest in history — that would create the largest financial services company in the world, worth more than $140 billion… In one stroke, Mr. Reed and Mr. Weill will have temporarily demolished the increasingly unnecessary walls built during the Depression to separate commercial banks from investment banks and insurance companies.”
The Bill Clinton administration repealed the Glass-Steagall Act the following year and handed Weill a pen from signing the repeal legislation into law.
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