To paraphrase J.P. Morgan during the bank panic of 1908, the banking industry is not built on assets and balance sheets, it is built on trust.
His bank was in the process of bailing out the U.S. Treasury and preventing runs on most of the major banks in New York. The lure of easy profits replaced sound financial management and perhaps the first "too big to fail" crisis rocked our country.
What followed was a historic meeting on Jekyll Island, Ga., where the nation's leading bankers met and created the blueprint for the Federal Reserve.
Five years later, Woodrow Wilson signed legislation that created the Federal Reserve and for the third time in our country's history a national banking system was created.
The stated goal was to prevent bank panics. The money supply would be managed, and banks would no longer have the power to threaten our economy. At least that was the plan. Less than 20 years later, the stock market collapsed and the bank system failed, leading to the Great Depression.
Fast forward to 1999. The dotcom bubble bursts. In 2006, subprime derivatives collapse the real estate market. The failure of Lehman Brothers in 2008 puts the country into a recession. Today, we have a faltering economy, high unemployment, inflation, wage stagnation, and all they do is print money to finance out-of-control government debt and a failed banking system.
Enough is enough. We need a fresh start. I believe Jekyll Island is still available for meetings.