Washington Bank Heist

Willie Sutton said he robbed banks because that's where the money is, but it was never their money. They only handle and maneuver it around, like parking lot attendants.

Yet, according to Sen. Dick Durbin, after smashing up financial vehicles and taking taxpayer billions for repairs, when it comes to the US Senate, banks "frankly own the place."

As he tried unsuccessfully to line up votes to help avoid foreclosures in bankruptcy, Durbin told voters that though it's "hard to believe in a time when we're facing a banking crisis that many of the banks created," they "are still the most powerful lobby on Capitol Hill."

In the lull before the Obama Administration announces results of bank stress tests, there is growing sentiment for getting tougher on the keepers of the keys.

Sheila Bair, head of the FDIC, in a speech this week called for an end to the "too big to fail" philosophy that has allowed banks to hold a gun to the government's head.

“Taxpayers," she said, "should not be called on to foot the bill to support nonviable institutions because there is no orderly process for resolving them.”

The President himself foresees an end to "the massive leveraging and the massive risk-taking that had become so common," but his economic team so far has been tiptoeing around the banking industry and their Wall Street cousins, hoping to bribe and cajole them into less greed and more responsible behavior.

The time is coming to sweep out the parking lot and get new attendants who can remember who really owns the money they keep jockeying around for their own profit.

Godfatherly Advice for Financial Crisis

The Bush family consigliere wants to make American banks an offer they can't refuse.

Writing in the Financial Times, James Baker advocates that, after subjecting them to stress tests, the government divide banks "into three groups: the healthy, the hopeless and the needy. Leave the healthy alone and quickly close the hopeless. The needy should be reorganized and recapitalized, preferably through private investment or debt-to-equity swaps but, if necessary, through public funds. It is time for triage."

Baker, who was Reagan's Secretary of the Treasury, warns against repeating Japan's mistake in the 1990s of providing guarantees and piecemeal government bail-outs that created “zombie banks,” neither alive nor dead, and led to feeble economic performance for a “lost decade.”

There has always been a Corleone streak in Baker's approach to problem-solving. Toward the end of the first Gulf War in 1991, as Bush I's Secretary of State, he warned Iraq that use of WMDs would bring nuclear retaliation and, in the Florida recount battle of 2000, he played legal hardball to get W into the White House.

If the consigliere is now advising them to get tough with the banks, the Obama Administration might do well to give Baker's approach more consideration than the second President Bush did with his advice from the Iraq Study Group before going ahead with The Surge.