Who Needs Big Banks?

At a panel discussion at the Pew Charitable Trusts (captured for posterity by Planet Money), Alice Rivlin floated the idea of breaking up big banks. Luckily for us, Scott Talbott of the Financial Services Roundtable (a lobbying group for big banks) was there to slap that idea down.

Talbott: “We need big companies, and they can be managed, and they are being managed …”

Alex Blumberg (Planet Money): “But why, why do we need big companies?”

Talbott: “They provide a number of benefits across the globe. We have a global economy, and these institutions can handle the finances of the world. They can also handle the finances of large, non-bank institutions like General Electric or Johnson & Johnson. They need these institutions [that] can handle the complex transactions. Simply breaking them up … then you’re discouraging a company from achieving the American Dream, working hard, earning money, producing products, and getting bigger.”

There are two things I object to strongly. The second is easy. The American Dream is for people, not companies. And people dream of working hard, being successful, making money, and having an impact on the world. The American Dream does not imply any particular company size. There are situations in which your products are just so much better than anyone else’s that your company becomes big as a result; Google comes to mind. But Citigroup is the product of no one’s American Dream. When Talbott says “American Dream,” what he really means is “American Bank CEO’s Dream” — because, as we all know, CEO compensation in the financial sector is extremely correlated with assets.

The first is this “we need big banks to serve global corporations” line. I’ve heard this before and I don’t buy it, for a number of reasons.

First (sorry, I have this habit of embedding numbered lists inside numbered lists), how global is Bank of America? Until it bought Merrill Lynch, it was pretty much a midget overseas compared to, say, Morgan Stanley, which was a small fraction of its size. How global is Wells Fargo? Yet those are two of our four biggest banks.

Second, the argument doesn’t pass the test of basic business logic. My company did (and does) business in many countries around the world. We had different alliances and different service providers in each one. There were overlaps — we worked with some consulting firms in multiple countries — but we made the decisions independently in each country, because every country is different. And in each country, you want the people who are the best in that country. Sometimes that will be a division of an American multinational; often it won’t. If I’m “General Electric” or “Johnson & Johnson,” I’m not going to do all my banking with Citigroup out of some misplaced customer loyalty.

Third, what global services is Talbott talking about? Sure, as an individual, it would be nice if my bank had offices in every country I might ever travel to. But that’s because I’m an individual, and I don’t want to have more than a few bank accounts. I would guess that General Electric has, oh, thousands of bank accounts around the world, with dozens if not hundreds of banks. The “one-stop shop” idea applies — barely — to people like me, who would like the convenience of doing all of our financial stuff with one company, but generally figure out that it’s impossible, because my bank offers crappy investment products, and crappy insurance products, and … you get the idea. It’s laughable for a big company, which has hundreds of P&Ls, each of which is different, and has different objectives and preferences.

Fourth, let’s take a big, global transaction — say, a debt offering. Here, arguably, it might be good to have a single bank with global scale, since you want to sell bonds in as many markets as possible in order to get the broadest possible pool of investors. In 2008, J&J issued $1.6 billion (face value) of bonds. Who got the deal? Goldman, JPMorgan, Citi, Deutsche Bank, Bank of America, Morgan Stanley, Williams Capital Group, BNP Paribas, HSBC, Mitsubishi UFJ, and RBS Greenwich Capital. Eleven investment banks based in five countries, including five U.S.-based banks. (In 2007, J&J issued 500 million pounds of debt, using thirteen underwriters — six of whom were not involved in the 2008 offering; two out of three book-running managers were European banks.) So when push comes to shove, our beloved mega-banks are nowhere near up to the task. What this tells me is that it’s the big companies that call the shots, and they like parceling out business to lots of banks. This is another basic principle of business: it’s better to have multiple suppliers than one supplier, so you can keep them in competition.

This whole argument, that global companies need massive banks, is one of those things that sound plausible until you actually start thinking about them. Is there something big that I’m missing here?

By James Kwak

103 thoughts on “Who Needs Big Banks?

  1. “Is there something big that I’m missing here?”

    Yes. CEO compensation as a function of company size.

  2. For American companies. See compensation for Chinese bankers. Or Japanese automakers. Which are bigger companies.

  3. James:

    The very fact that Mr.Talbott and his ilk can not point to any actual rational reason, scale, efficiency, non-system capture competitive advantage, etc. should be greatly troubling.

    We have entered into Faustian bargains with the too big too fail banks. In my state, we just inexplicably had major multi-page touchy feely articles in our major Sunday newspapers detailing how the divisions of our TBTF banks just so happen to be the largest employers in a number of our counties……and by extension, the state.

    Thus, the implicit message: don’t even think about killing or breaking up the TBTF banks…in this economy…with this unemployment level…with all the jobs enjoyed by your friends and neighbors in your state…

  4. Who needs big banks??? Ask Republican Senator Phil Gramm. He was Chairman of the Senate Banking Committee when Gramm-Leach-Bliley was passed.

    Phil Gramm also helped to pass the “Commodity Futures Modernization Act” which allowed the infamous “Enron loophole”. This deregulated energy trading and increased wholesale electricity prices by a monstrous amount in California. Which in no small way contributed to California’s current budget crisis.

    You can read about it in an article by Mark Sumner at “The Nation” magazine/website http://www.thenation.com/doc/20081006/sumner

  5. James — Having worked for a couple TBTF banks in the past, as well as a couple that were not, I can reassure you that you are not missing any valid reasons to create huge banks.

    First, as you point out, most of these are huge *regional* or *multiregional* banks, not global ones. Very rare is the client who needs a truly global bank and, if they do, they tend to cobble together global syndicates in their place.

    One thing you did not mention is that regulators seem to have a bias for size themselves. That is, they tend to like and encourage bigger institutions because, presumably, they make the regulator’s job that much more “efficient.” Current regulations impose quite heavy compliance burdens on small financial institutions.

  6. In that fetid swamp known as Wall Street, big-is-best is the argument most often heard nowadays in discussions of the future of finance. There is, in Talbott’s vacuous remark an acknowledgement that big-is-best has failed as a model and as an argument that can be supported based on experience. When Mr. Talbott says, “We need big companies, and they can be managed, and they are being managed …” he de facto acknowledges big financial firms have not been “managed,” but, trust us, “they can be managed.”

    The appeal to the “American Dream” is a complete — and unartful — non sequitur. It should have been challenged immediately, but was not. There is, as you note, James, nothing in the “American Dream” that is congruous with big banking. If anything, the American Dream and too-big banking are mutually exclusive: The community bank of “It’s a Wonderful Life” is a true financial intermediary that allows Americans to pursue the American dream, while the too-big-to-fail financial behemoths are now and always will be the antithesis of, and threat to, the American Dream.

    Massive economic power concentrated in the hands of self-serving bankers, once unleashed, is among the most destructive forces in history. This is not a lesson that needs to be re-learned, but, alas, we are, very shortly, going to see it played out again. F.A. Hayek’s Road to Serfdom is the most cogent description of how such a state of affairs comes about, particularly as regards the formation of cartels. We are in the final stages of the formation of an extraordinarily effective banking and finance cartel here in America. Indeed, the key parts already are in place and visible: A pliable Treasury dominated by cartel insiders, taking direction from the dominant banking interests; a captive legislature, which can and will craft laws (yes, LAWS) for the benefit of the cartel; and an executive that can mobilize the state’s monopoly of force in service of the cartel, supported by a compliant judicial structure that will lend an appropriate veneer of legality to the whole process. This all is underwritten by the taxpaying citizenry, which funds the cartel’s endeavours. As we’ve seen in history — Nazi Germany, about which Hayek wrote, Russia, Rome — once these structures are complete there is nothing, save the collapse of the civilizations that spawned them, that can arrest their accumulation of power. Setting up the banking-finance cartel’s taken a bit longer than the military-industrial and the health-care cartels, but it’s now just about complete.

  7. Perhaps you should consider why we need the giant corporations like GE?

    Business and financial institutions have generally become too big to succeed at anything except political influence. People are simply powerless hostages. All economic nostrums create a handful of winners and an army of losers. This has been going on since the invention of economics by Adam Smith.

    Only politics can adjust economic consequences in a humane way. Of course, most efforts to accomplish this are captured by vested interests and/or demagogues. We are now under the heel of both. If you don’t mind etermal darkness I recommend Scandanavia. What are its prospects in the light of global warming?

  8. 1. Existing law is probably enough. According to the Prompt Corrective Action Law the executive has an obligation to break up insolvent banks, which the TBTFs were and are. Bush and Obama have broken the law here. Then there’s existing antitrust law.

    2. If we had a public interest Congress and not an incorrigibly corrupt one, we could reinstate Glass-Steagal, pass new financial antitrust legislation, other laws. Instead we’re about to get a gutted bag of discarded “regulations” even more worthless than what’s on tap with health care.

    3. Then there’s the obvious: a executive who worked for the people would roll back the bailout and withdraw the whole TBTF put. That in itself would rock the foundations of these structures.

    As for why they haven’t and don’t do these things, it’s simple corruption and corporatist ideology.

  9. One thing I would like to add. This site “Baselinescenario” currently has a link to Real Time Economics (A Wall Street Journal blog). Some of you may not know that recently the Wall Street Journal had an editorial which was strongly against the Consumer Financial Protection Agency. Titled “Fifty Eliot Spitzers” http://online.wsj.com/article/SB10001424052970204488304574431102274177672.html
    Now I know that the newspaper is different than the blog. But the same entity controls both. I find it very disconcerting and bothersome that this site has a link that goes directly to a Wall Street Journal blog when the Wall Street Journal Editors have come out against the Consumer Financial Protection Agency.

  10. Gee I agree with James and Russ!

    There wlll be no substantial recovery until the TBTF banks are broken up and cleaned up. The financial system needs to be cleansed of its bad debt. Papering over the debt delays the inevitable. This massive concentration of political and financial power that is propping up our stagnant financial system is just killing us. These big banks are all heavily underwater, and are not contributing to our economic welfare at all; in fact they are the obstacle to recovery. Over the last three months, total lending has declined at a annualized rate of 19% and lending to business has declined at a 28% rate. We are sinking towards the abyss. TARP has failed. Bernacke has failed. So have Paulsen and Geithner.

  11. ¨…In my state, we just inexplicably had major multi-page touchy feely articles in our major Sunday newspapers…¨

    That smells like stories being planted!! Not only White House and Congress are being bought by Wall Street, but newspapers as well.

    It is just one of their talking points! Listen to interview with Simon and congresswoman Kaptur: when she asked Jamie Dimon, CEO of one of those TBTE (too big to exist), to stop foreclosures in her district, he just replied by mentioning the number of people working at his bank in her State. Apparently, in a time of growing job losses, that just says it all.

    I would argue: not all jobs are created equal. Some jobs contribute more to society than others. While the so-called old-fashioned banking jobs, i.e. taking in deposits, and finding qualified borrowers, clearly have a postive impact, almost all jobs related to the ´financial innovations´ are only a huge burden on society. The insane profits of the ´investment banking´ side are only a horrible, unjustifiable tax.
    So, let´s get rid of those, and don´t fall for their jobs argument


  12. I couldn’t agree more. “Inexplicably” used tongue in cheek. And, I wholeheartedly agree with your too big to exist, and public policy arguments.

  13. ¨Talbott: “We need big companies, and they can be managed, and they are being managed …” ¨

    James, in addition to your and readers’ points that No, we do NOT need them:

    1) they can NOT be managed: this crisis started at peak debt (august 2007), and the managers at those big financial institutions were NOT able to manage them properly. Read all the accounts around the chaotic weekends of Bear Stearns and Lehman Brothers. They did not know what was going on and how to manage their holdings.

    2) Liddy, CEO at AIG after huge taxpayer support, has admitted that AIG is too big and complex to be managed.

    3) As for banking infrastructure: why don´t we compare it to the Internet infrastructure: lots of small nodes, instead of a few big nodes. Nodes are temporarily down all the time, but we don´t notice, as Internet traffic is routed around a down node. It was designed that way! With a few big nodes, the system as a whole would have been down a lot; with many, many small nodes, the system as a whole works all the time.

  14. Just checking in to see if you guys have posted your big expose on Dark Pools. Since you haven’t…

    1) Are they just not that important?
    2) Do they lack the potential of becoming a big problem?
    3) Do you not know enough about them? (Pretty scary)
    4) Do you not care?
    5) Would you prefer we just not talk about them?
    6) How are the big banks using them currently?
    7) Does liquidnet still get all huffy when you ask them for their IPO prospectus?

    Bonus question: Where did Simon grow up? I asked one of the leading sociolinguists in England this question, and he had no idea, except “probably British” due to his accent smacking of “Received Pronunciation.” Ireland, Scotland, Wales, or Scotland? Or somewhere else with some solid voice coaching?

  15. Well said. I remember a Forbes top 10 list of large banks in the early 1990’s. It listed the world’s largest banks. As I recall the US had about two names on it. It appears we had an identity crisis and rewrote our banking laws in order to catch up. Apparently, we have. How do we like it? I for one would like to go back to the days of the 1980’s when I knew my bank president personally, but he and all of his fellows were all bought out in consolidations 20 years ago. What a shame. The banker knowing the customer worked pretty well.

  16. Stray thoughts:

    – Who originated, named Dark Pools?
    – Did they make it sound mysterious and scary on purpose?
    – What does Harold Pinter have to do with this?
    – Is it significant the Dublin means “Dark Pool”?

  17. international financial institutions are at the heart of international trade.

    say i want to buy a boatload of plastic christmas ornaments from a factory in china. without an international bank, how would you do this?

  18. I saw the Moyers show about the implied threat of job losses if the big banks were threatened. The problem with that line of reasoning is that if we look back at how those big banks got so big, they bought out rival banks, most of whom were healthy entities. The first thing they did upon completing the takeover, lay off workers in the new acquisitions. Letting these mega banks buy up smaller banks has lead to job losses over the years.

  19. Since deregulation and Phil Gramm has been brought up, let’s add to the outrage here. Senator Gramm’s wife, Wendy, was chairwoman of the Commodity Futures Trading Commission (CFTC,) which was empowered to regulate exchange traded futures contracts. It could also exempt commercial futures if desired. After George H. W. Bush lost the 1992 election, Enron petitioned the CFTC to define energy derivitive contracts and interest rate swaps so that it exempted them from CFTC oversight. Mrs. Gramm, as chairwoman on the committee, which was short two members, fast tracked the petition and instead of a year long review process, granted Enron’s request on January 14, 1993 after only two months. A week later, she resigned her position. Roughly a month after that, she accepted a position on the board of directors at Enron.

    Source: American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush by Kevin Phillips

    Not only do these business get “too big to fail,” they have the advantage of buying the people in Washington who are supposed to be looking out for the good of the American people.

  20. “This whole argument, that global companies need massive banks, is one of those things that sound plausible until you actually start thinking about them.”

    — Not sure why any of it sounds plausible to you or anyone. It’s a bunch of cr*p.

    “Is there something big that I’m missing here?”

    — No.

  21. There are so many answers to this….but for now, I’ll just say “To h*ll with international trade. Buy locally.”

    I’m sure other answers would be more in line with what you want to hear, but I’m sick of people who can’t think one iota out of the box, and just love to embrace the degenerate financial culture that is so prominent these days.

  22. I have nothing against big banks but I have much against oversized banks. What is an oversized bank? When one department does not know what any other one does and does not care one iota about it.

  23. It would be nice to see if anyone has gathered information about banking costs compared with the size of a given bank. I think that if politicians could show with data that shrinking the banks would not cost Main St on their mortgage or credit card payments, then there would be more support.

    I fail to see how there can be significant economies of scale in banking, but I can definitely see how there could be diseconomies of scale (see Per Kurowski’s comment).

    In New Zealand we have 4 big banks (Westpac, BNZ, ANZ National and ASB, each with big Australian parents)and also a bunch of smaller banks. (Kiwibank, TSB…) We don’t have a Fannie Mae or a Freddie Mac, these banks hold pretty much all their mortgages to maturity. Yet the smaller banks are still able to offer very competitive mortgage rates (sometimes even better than the big banks) see the link for mortgage rates by bank:

    So it would seem that bigger banks don’t save the public any money by economies of scale.

  24. Simon Johnson said this (quoted on Greeenwald):

    “Rahm Emanuel, the President’s Chief of Staff has a saying. He’s widely known for saying, ‘Never let a good crisis go to waste’. Well, the crisis is over, Bill. The crisis in the financial sector, not for people who own homes, but the crisis for the big banks is substantially over. And it was completely wasted.”

    That saying is actually the core principle of what Naomi Klein calls “disaster capitalism”, and I am sure that is much closer to what Emanuel had in mind then the reform and regulation Simon Johnson was referring to.

    This crisis was not wasted at all – the people close to Emanuel’s heart made trillions of it, before, during, and since the collapse and the bailouts. This was the most successfully “exploited” crisis so far. Now, “crisis cycle” capitalism has become an institution, and the foundations for the next round have been put in place. It is all “bull”, all the time – first on economy and earnings, then on bailout gains, then back to the economy.

  25. Oliver Williamson has been awarded the 2009 Nobel Prize in economics, specifically for his work which attempts to convince that bigger businesses are inherently superior to smaller businesses (because they are more “efficient”). He advocates addressing specific behaviors – such as fraud – which you don’t like, rather than targeting size itself as some kind of problem. The ability of super-sized financial organizations to (legally) corrupt democratic political institutions and engage in profitable but destabilizing leveraged gambling while insured from failure by TBTF status apparently does not need to be considered in such a theory in order for it to be “the best of the best.” Neo-liberalism continues to rule.

  26. How interesting that nobody mentions that Wendy Gramm was a board member of Enron and getting paid about a half a million dollars for four meetings a year while Phil was trashing Glass-Steagal.

    “The short strokes go like this, Phil Gramm begets the Financial Services industry by tearing down the wall between investment banks and commercial banks, which begat CDOs and credit default swaps, which begat outrageous levels of risk taking, which begat fortunes for Wall Street bankers, which begat a huge financial mess for all of the rest of us.”

    Dear Ted, this is direct quote from our new book, The Great Recession Conspiracy. I know you hate the idea and also that you have not read it. Try it. You might find we are not so far apart.

  27. If there really were a God who would step in an make things right, he would cause those of Talbots ilk to choke to death on verbal manure. C’mon, we get it already. They have the money, so why even make the argument? Isn’t it enought to have a Congress and White House that you own? At least give us the win in the argument. After all, it is not likely that enough are listening (or understanding) to make any difference in any future election. Our media has so dumbed down its viewers that only those who tune into C-Span and guys like Bill Moyers (a very few of the larger audience tuned into shows like Desperate Housewives) get it. What a shame, but the middle class (what’s left of its shrinking numbers) has become nebishes, who want to bury their heads in the sand and trust that our elected officials will do the right thing. After all, the incumbents have captured the majority of financing to stay where they are, in power, such that Marci Kaptur, Bernie Sanders, et al will continue to remain in the minority.

    I keep hoping that a real grass roots revolution will sweep those connected to the plutocracy out of office, but if I hold my breath while waiting, I will die, even before their policies kill me.

  28. Soon there will be two types of people: the people who work for the big banks… and their slaves.

  29. East Midlands?

    Traditionally, Received Pronunciation was the “everyday speech in the families of Southern English persons whose men-folk have been educated at the great public boarding-schools” and which conveys no information about that speaker’s region of origin prior to attending the school.

    It is the business of educated people to speak so that no-one may be able to tell in what county their childhood was passed.

    A. Burrell, Recitation. A Handbook for Teachers in Public Elementary School, 1891.

  30. Outstanding reportage. It’s not as though there would be an end to financial processess or transactions. Deals would get done regardless of who is managing and profiting from those deals. Now we have a situation wherein a select few predatorclass oligarchs, and heartless, greedy, criminal predatorclass operators hold the entire globe hostage to thier illgotten gains. They don’t have to play by any rules, or abide any set of standards. If they fail miserably and perpetrate obscene abuses and criminal practices, (insider trading, collusion, monopoly, predatory lending, loansharklike fea’s and rates, et al) only to have the American taxpayer foot the monsterous bill for monsterous FAILURE!!!! Break up the TBTF insitituions! Imprison their managers and criminal greedmongering CEO’s and CFO’s, and COO’s for their grotesque and blatant crimes. Clean out the regulatory minions of the payroll of the financial oligarchs and predatorclass, and FIX this system. There are rules, there are laws. Criminal conduct, and neglect or incompetence, can never be tolerated! NEVER!!! Business will continue without these shades, shaitans, fiends, and criminals. They provide and offer no service and no benefit to the greater society or the world at large. All they care about is their own aggrandizement and material wealth. Eliminate this cancer, and America and the world has hope for recovery! Allow this malignancy to advance or prosper in it’s present form, and the world is doomed to unending cycles of boom/bust/collapse economies wherein the fiends, shades, shaitans, and criminals in the predatorclass benefit wantonly, – and the other 99.9% of humanity gets reamed ruthlessly!!!

  31. We also need a law that makes gov’t service to private enterprise a one way street. Once you go private, there is no return.

  32. End the privately held federal reserve corp,

    reenact Glass-Steagall,

    repeal TARP, and call back the money,

    and break of the banks with antitrust legeslation.

    and use RICO and Sarbannes-Oxley to put in jail to all the fraudsters that perpetrated this goliath size bankheist.

    Build the 1000 prisons necessary to house the prisoners of this bankheist==this may stimulate the economy.

    If you haven’t already called, emailed, written, faxed your elected officials to thank them if they are supporting or to state your expectateion that they will support HR1207 and S604, please do…for a bunch of people who have stealth wealth of over half of the DOW, is it any wonder that most of Washington has been purchased to legalize criminality? Simple as that….

    Here is a link, you can enter your zip code to see where your (possibly non-representing) elected officials stand on HR1207 or S604. If they voted for TARP and arent’ ALREADY supporting the AUDIT THE FED legislation, make sure you vote them OUT OF OFFICE ASAP…


    thankx and may peace and courage be with you.

  33. Sophie, last week we figured out that our currently elected officials are bought and paid for. It’s going to take a generation at least, educating and vetting the administrators we can trust.

  34. I happen to believe strongly that we should break up our larger banks and restructure them – you kindly discussed my post on the topic:


    However, I do think you are overlooking something. You are arguing among gradations of large, not between large and small.

    The fact that Goldman Sachs was larger than Lehman was not terribly important when both were operating (it was of signal importance when it came to deciding who could fail). Both were large enough to lead any capital markets activity.

    The fact that Lehman was larger than Lazard was critically important. Lazard did not have the balance sheet or global presence to play in the capital markets game. Through the early 1990s – when companies were still in the habit of getting advice from one company and capital from another – that wasn’t a problem. But it rapidly became a huge issue in the late 1990s merger wave and has only become more of a problem.

    In 2008, the small side of the large firms – Bear and Lehman – was dragged under by the very markets businesses that their smaller competitors could not even pretend to offer. Greenhill and Lazard were never in serious danger.

    As for multiple underwriters, remember that some animals are more equal than others. Notice how the names are not in alphabetical order? That isn’t an accident. The guy in the upper left pulled together the consortium that got the deal to market. There is input from the company – a good global business in a highly regulated industry will want to parcel out some fees to connected banks in a variety of regulatory regimes – but everything passes through the desk of the guy sitting upper left. Including the fees.

    The challenge is how we can have American firms that are big enough to do this kind of business but small enough that our government is prepared to let them fail.

  35. Buy locally

    when “buy locally” was still what we were forced to do didn’t we complain then that we wanted Italian shoes for all at an acceptable price? and didn’t we rail then without end at the importers who cashed excessive profits from making Italian shoes (or whatever your US-equivalent was) available
    … or when every teenager would have been willing to sign a pact with the devil for a pair of real Levys
    … or when getting hold of an English language paperback was a major undertaking …

    we got rid of all that and on the whole it seems it made our “western” life more unstable – what will happen if we try to reverse it? – I do not want to live without Amazon again but I am also deeply unhappy when I see one little shop after another in this beautiful small town’s “city” go under

  36. Per,
    that’s not primarily a question of size that’s a question of culture

    I saw it happen when it became the fashion to pitch departments against eachother under the mantra competition is good for business managers fresh from the last round of training in easy to memorize mantras would set impossible goals and reward the ones who spun their gold cheatingly via enlisting the help of Rumpelstilkens

  37. recently I read a piece on what American banks are charging in “minor” fees here and there
    very very strange
    – none of those fees I have to pay at a bank in Germany that is also acting in the states i.e. is it that it has nothing to do with cost but with the ability of cashing whatever the market will tolerate and the more the customers are willing to be accused of penny-pinching the better their leverage is?

    I am always told that bigger markets and more competition makes for lower prices. the US definitely is a bigger market than Germany and should have more competition – how come that you have to pay for all kinds of stuff that I get for free?
    example: overdrawing my bank account up to € 2000.–*) will cost me interest for the time of the overdarft only but no overdraft fee – this 2000 amount is a start-up amount which is granted automatically on opening the account and can be easily increased in accordance with your income and your money handling habits of your current account. https://www.ing-diba.de/ ——compare and enjoy

  38. if “bigger businesses are inherently superior to smaller businesses” how come then that those big ones were all so eager to “outsource” all kinds of operations, claiming that smaller outfits were more efficient, tricking lots of well-remunerated employees into starting their own business and now when they have surplus labour themselves cancelling the contracts with those same people?

  39. “Where did Simon grow up?”

    don’t American professors have detailed CVs all over the net?

    whenever I have looked up somebody in the UK of the history kind I found rather more than I wanted to know

  40. Contact the manufacturer or agent.
    Agree the deal.
    Agree payment terms.
    Almost any bank can hold shipping documents which release goods in exchange for payment.
    You take shipping document to agent and take possession of goods.
    Actually the movement of product is probably manage for you by a freight forwarder or shipping company.

    More to it than that but this is the bare bones and electronic communication simplifies every step. No need for any large bank! Think of the small countries and their ease of handling the same type of deal. Why should we find it difficult?

  41. In following the most recent threads subsequent to Bill Moyer’s discussions I too believe no economic entities in the US should be too big to fail. The continued cozy relationship perpetuating financial power brokers gain at the expense of the rest of the world citzenry needs to be broken. The Fed and the 4 largest banks in the US are playing a dangerous game that threatens, now, increasingly, the long term global economy. Ignoring ever increasing systemic risk concentration because they simply can is screaming to me global economic risk that will result in catastrophic consequences. Why the Dimon’s and the Bernake’s of the world don’t realize that the ever more dangerous game they play is not sustainable is beyond me.

  42. maybe the Dimons and the Bernanke work, for different reasons, until it has all merged into one big super-entity which they then can squash with one strike instead of having to stand up against several TBTF ;-)))))
    that’s a kind of reasoning that’s not unpopular …

  43. Some people see those yearnings (for levis, shoes, english books etc.) as a bad thing, a need that must be filled. I, on the other hand, feel that providing every importable thing too easily has somehow killed the mystique or specialness of these things.

  44. The whole concept of overdraft is lost on Americans. In America, writing a check without sufficient funds in the bank is a crime, and some people in California will be imprisoned their entire lives for doing this a few times.

  45. Actually I have no idea what you guys are talking about. I have to research this online myself. But didn’t Bram Stoker’s “Dracula” supposedly have some racial undertones about Scotland???

  46. I’d agree on shoes and levis – I could do without them and I can again do without them

    – but books, you have to have lived in a time when books you desperately wanted were impossible to get even impossible to know about until you can understand –

    – lots of the most interesting stuff does not get translated and if it does often badly because translators tend not to get paid well and it’s not only amazon i.e. new books, look at that box of wonders named abebooks.com
    once upon a time there was an English Book Club outfit promoted over here where one could finally finally learn about some English standards/classics and buy them for exorbitant prices – before that you had to look for somebody travelling to the US and talking him or her deaf to bring you something

    books, reading in general do need no mystique to be cherished – but if I could be convinced it would be for the good of mankind I would even give up on that but please let me keep some of my favourites …

  47. do you mean to say that a private person cannot have an agreed upon line of credit at her bank? i.e. no leeway at all?

    if that’s correct then if I assume that your banks do not pay interest on the content of your bank account the bank is the one getting a forced loan for free because you always have to make sure that at least something like 5 $ remain in the account. 5 $ per person multiplied by millions would be quite a another nice profit of miniscule amounts that nobody wants to raise a fuss about?

    I do not get it! Is penny pinching behaviour/demands un-American?

  48. Welcome to the internets. I bet with 2 or 3 more link-clicks you can end up at a video of Piano Cat. Baseline Scenario is now a supporter of Piano Cat?

  49. That is the entire purpose of overdraft protection – to protect against inadvertently bouncing a check. There are millions of US checking accounts with this service, so I don’t think the concept is lost on Americans in general.

  50. Buying locally is such a lovely fuzzy-warm idea – but one that has limited real-life applications and seriously bad implications when followed completely.

    Nowadays, every 3rd grader in the US can choose from five different ethnic menus, and their teacher can afford to give the entire class new toothbrushes, and the parents can create companies using Chinese-manufactured cost-effective computers to get on the internet.

    This is not a meaningless set of changes, and they have been made possible by international trade.

    Large ideas expressed simply are tempting – but “buy locally” has far too many problems with it to be used. How about, “consider local production before making a purchase” – less sexy, but far better.

  51. I’ll bite. This is as much about what Simon said on Bill Moyers as what is mentioned here. If we are talking about government being in the hip pocket of business on all levels and Dems and Reps. are both in this, are we then talking about an 1848 change not only in the States, but in Europe so change can come about? Let’s forget that 1848 was not successful in some areas, nor am I talking about anything more then discussion with possible new party birth and the use of legal elections that is as radical as I get as I believe in the Constitution.

    But, how can we do this when the intellectuals go to class in a corp. sponsered classroom, with a corp. sponsered football stadium, with corp.sponsered shuttle bus to get from one side of the university to the other. I am sure there are a few corp. sponsered chairs out there also.

    A little off, but we cannot even embargo Iran without corps. using back door methods to sell to Iran.

    So are we talking new political parties? Bull Moose rebirth? People coming to Alpha, WI (lots of symbolism there intended) to start a new party. what? Pandora’s box is open on so many levels.

    Or are we just a group wishing our ideas had been used back in Dec. 08 to fix the economy? I’ll answer that — No, at least for me.

    I know I really need to get back to my book on culteral change during periods of invasion and now added since I have done so much work in the last few months — economic change — using Romen, Saxon, Viking and Norman invasions in England as my base. But this modern case has been important to me, as it is where I live and determines if we are on an economic roller coaster and end up having more recessions each worse, and my big question as of January 09, how much is population playing in this.

    Much of this reminds me of a paper I wrote on Status in the 750 – 1200’s in Germanic and Norman Europe — we have gone from families to corps. and the church is now government.

    Please excuse me for stepping on anyones toes or stepping out of line. But how much are people willing to put on the line. Is this 1848 yet?

  52. Intriguing Brenda, Is your paper (Status in the 750-1200’s) available on line?

    Also would you care to further explain your references to 1848 and its potential recurrence?

  53. No, the paper is not. excuse the thumb typing so I can write this quickly. I will use one example from my paper what will become Denmark. The old families still belived in the old gods and the staues quo. the new families turned to the new God and used it and the church to press for their own agenda and their new status as leaders. games were played and older leader families were kicked out some invaded what is now France. the church was used for families to gain power and to use when they needed an aliance, marriage was used for the same thing (mergers to increase status)Females were used as queens to keep lineal family status towards the end of this. Empress Matilda, England example though she can also be argued as a pawn for factions and other family status in England. The ultimate status was the church blessing on wars for family or group status. William the Conqueror and his brother Odo (church and pope) to take down Harold II. Next came the status feuds of England and France. the church was used here along with in the Holy Roman Empire.

    We have gone from small family aliance ie clans (small business) mergering through marriage to groups, groups (corperations)to states, to international families by marriage (international corps) all using the church government to justify, null marriages, bless them etc to be one happy family that can then say no to the church and in the end start a new church. For most the new church looks like the old, but it has new players with the King or family at its head. (I am part English and my family came over with William, I am stepping on my own toes here. So there is meant to be no offence here.)

    The 1848 period was a European movement by intellectuals and the middle class to bring about reform and republican type change for governments, taxation, etc. It started in the Universities. It failed in Germany as they wanted an intellectual change without fighting. But many of their ideas would be used to form the German government after WWI. It was an attempt to honestly bring a level playing ground to all social classes, and groups through government. To me, it is a symbol of an intellectual rebirth of government. A group of people coming together to fix that which is wrong without a revolution.

  54. I put my reply in the wrong box. See below.

    I would like to add. As States became real countries where family status ended, democratic type governments took their place. This only leaves business as a place to gain status in the 20th and 21st centuries as we do not place our intellectuals on platforms. Except in some circles, intellectuals typically are not interested in the money, but the persuit of knowledge. If one is after the money, then you need to see whose hip pocket they are in.

  55. Lordy mercy, as they say down South Uncle Billy Cunctator!!!… if folks at baselinescenario.com only figured that out just the other day, I hope you will see the value of being redundant and restating this long standing and now, in our face corruption. In other words, please forgive me or anyone else who decides that the broken record routine, is of great value in helping people break through their cognitive dissonance and see the truth about the banana republic that our government has become all based on a symbionic relationship between agents of the privately held federal reserve’s ownership interests and the government officials…thank you!

  56. Wow!! this is absolutely outstanding work.

    Surely this quality data assemblage will sway President Obama? I can’t see a possibility of denying the sensible response. We want to see O ordering action required.

    I vote for Simon to head the TBTF reduction project.

    Keep going Simon we are your 100% support team.

  57. “To me, it is a symbol of an intellectual rebirth of government. A group of people coming together to fix that which is wrong without a revolution.”

    unfortunately a very short lived and “unsustainable” intellectual rebirth – if you want to be generous it took the aritocrats all of 15 years to hand it over to the mass murdering thugs

  58. “where family status ended”

    what about the bin Laden clan – they may all run around and proclaim themselves to be independent actors but I’d guess that their family ties come in more handy than our later in life acquired ties – and the Bin Ladens can’t be the only family like that … probably what these families have in valuable connectiosn would make every lobbyist green with envy

  59. Well no! Fixing the financial system so that it can work for your grandchildren is not a simple matter of a Sicilian vendetta but of understanding what really happened and being able to carefully balance and weigh all the conflictive objectives we want our banks to help us achieve. And, from what I have read until now, Signore Simon Johnson is not so clear on that… and it is also a bit suspicious that we never saw him uttering any clear warnings while at the IMF.

  60. it was either Frederick II (the Great) or his father who invented the Preussische Beamte restricting maybe even eliminating corruption in one strike and for quite some time – probably the pride of the Beamte in his profession is one of the victims of 1968, today it is definitely uncool to display any of it, laid back is the fashion
    – I’ve never read a history on Frederick but that is one point everybody seems to agree on – so with the right hand cuffs/bondage/punishments it should be possible to do it at once – if somebody really wanted to have it – but even thinking about a modern version is currently impossible because one wouldn’t have uttered one word before one would be yelled down with cries of big government – bureaucracy – lack of individualism etc etc.
    yes Frederick was still an absolutist monarch but he said of himself that he was the first servant of his state, quite a step away from France’s Louis XIV and his “L’état c’est moi”

  61. Correction: That was DSK.

    “People who have worked closely with Mr Strauss-Kahn describe him as a brilliant tactician, though some say he can be ruthless. Certainly, he was tough in pushing out Mr Johnson to make room for Olivier Blanchard as IMF chief economist, while some complain that he has turned the fund’s executive board into little more than a rubber-stamp for his decisions.”


  62. I disagree. It is totally HEROIC that Simon is putting “his neck on the line” as they say, to speak the truth to this MONUMENTALLY EVIL POWER MACHINE.

    The fact that Simon came from the system, and knows how deep and far, it’s roots spread (or vampire squid tentacles some people call it) and now that he is speaking out gives him EXPONENTIALLY much more risk for doing so–his act of speaking out, if he was a Catholic, may alone be enough reasons to nominate him for sainthood someday!!! BRAVO SIMON!!!

    When you are in the mafia, who speaks out, has to go into witness protection–we all need to pray for all of to be safe to speak the truth! This machine is evil.

  63. Well Per, I am a little confused re your message. I see Simon as assembling a large number of knowledgeable folk with a common understanding of the problem and a fix in mind. Are you inferring some hidden motive on Simon’s part?

    When we use terms such as ‘our banks’ a picture of many local and regonal banks comes to my mind. However the issue surely remains the behavior of the few, specifically several Wall St. behemoths? These entities may be described as TBTF, confusing lobbying with money gifts, operating unsafe and possible illegal banking practices.

    Now would you mind identifying which of our conflictive objectives you have in mind and exactly how are these TBTF banks ideally addressing same?

    Are you saying these banks are not TBTF and should not be reduced? Are you saying their practices are able to be differentiated so that we may selectively apply corective measures?

    Are you saying that you know the correction processes required and can clear up any apparent confuction of Simon’s? If so please describe them.

    Pardon me asking these questions but as my signon indicates I am definitely not a a banking expert. If you would be more specific it would be helpful improving my microscopic banking knowledge.
    thx in anticipation

  64. Nonsense: Here is a transcript of a Press Briefing by Simon Johnson, Economic Counsellor and Director of the IMF’s Research Department, on the Analytic Chapters of the World Economic Outlook
    Washington, D.C., October 10, 2007

    “QUESTION: You were talking about the wakeup call referring to what happened this past summer, but in the meantime you are not recommending some strong regulations approach apparently. Isn’t it a contradiction of some sort?

    MR. JOHNSON: I don’t think there is any contradiction between saying on the one hand some weaknesses were exposed and we need to understand those and really spending more time I think focusing on them, and saying on the other hand that we don’t yet have a ready easy answer and we don’t know if more regulation or less regulation or the same regulation is going to be the answer. So I think we’re still in the stage of waiting for these events to play themselves out fully and understanding how it happened and what are the implications, and at some point, you’re right, we do have to take a view on regulations forward, but I think it would be premature or not a good idea to rush to judgment on that issue right now.”

    My comment: I know it is not easy to speak out when in the IMF but… come on!
    And you can find it all here http://www.imf.org/external/np/tr/2007/tr071010.htm

    And it is not that I want to present myself as an expert but please compare the declarations above to what I, who have never been a bank regulator, but had only walked the main streets of a developing country wrote:

    June 1997 in The Daily Journal, Venezuela, in an article titled “Puritanism in banking”

    “If we insist in maintaining a firm defeatist attitude which definitely does not represent a vision of growth for the future, we will most likely end up with the most reserved and solid banking sector in the world, adequately dressed in very conservative business suits, presiding over the funeral of the economy. I would much prefer their putting on some blue jeans and trying to get the economy moving.”

    Or February 2000 in the Daily Journal, Venezuela, in an article titled “Kafka and global banking”:

    “A diminished diversification of risk. No matter what bank regulators can invent to guarantee the diversification of risks in each individual bank, there is no doubt in my mind that less institutions means less baskets in which to put one’s eggs. One often reads that during the first four years of the 1930’s decade in the U.S.A., a total of 9,000 banks went under. One can easily ask what would have happened to the U.S.A. if there had been only one big bank at that time.

    The risk of regulation. In the past there were many countries and many forms of regulation. Today, in Basel, norms and regulation are haughtily put into place that transcend borders and are applicable worldwide without considering that the after effects of any mistake could be explosive.

    Excessive similitude. By trying to insure that all banks adopt the same rules and norms as established in Basel, we are also pushing them into coming ever closer and closer to each other in their way of conducting business. Unfortunately, however, nor are all countries the same, nor are all economies alike. This means that some countries and economies necessarily will end up with banking systems that do not adapt to their individual needs. http://bit.ly/HIi3x”

    Or in January 2003, in a letter published by the Financial Times

    “Everyone knows that, sooner or later, the ratings issued by the credit agencies are just a new breed of systemic error to be propagated at modern speeds. Friends, please consider that the world is tough enough as it is.”

    Or in May 2003 what I told the regulators at a risk management workshop at the World Bank http://subprimeregulations.blogspot.com/2007/06/some-comments-made-at-risk-management.html

    And I know for a fact that I was not the only one speaking out… in the archive of the Basel Committee you will find many other voices warning…

  65. I am saying many things not only that we have to control the TBTF problem, and as you can read I have been saying that for a decade, but also, because it is even more dangerous, that we have to get rid of the TFTF (too few too follow) which was really what detonated this crisis.

    And I am saying that this crisis is primarily the fault of some incredible lousy regulations that created the minimum capital requirements based on risk. Basel is a failure, a total fiasco… and if we do not recognize that but automatically go after the “big bad ugly bankers” some individuals will gain on that but the world will lose.

    And I am saying that anyone that places this crisis primarily in the context of a bank oligarch problem is taking a dangerous shortcut… and does so probably because the agenda is different or he just haven´t read the regulations.

    But please search the web yourself… for things said before mid 2008 and read.

    I am so sick and tired of automatic solidarity… that kind who considers a simple oil-autocrat as chavez to be marvelous… just because they liked how he spoke out against one of their foes.

  66. “I am so sick and tired of automatic solidarity…”

    thank you
    I listened to that Moyers piece twice and I still do not know what Mr. Johnson wants people to do
    – I felt proselytized but to which end?
    – all this accusing is nice and good but besides “oh finally somebody is speaking my mind” there is no gain, no knowledge in it for me

  67. Thanks Pers, as a person who has come late to this from Main St, I have no idea what the last decade of internet posts may reveal.

    I see from your post that the problem is
    1. TBTF banks (crisis detonators)
    2. Basel capital requirements rules based on risk
    3. Bank oligarchy (but not primarily)

    Does the over the counter derivatives market currently estimated at over $500 trillion contain any cause agents? I gather this market is unregulated?

    May I assume you therefore believe corective action is:
    1. Reduce TBTF banks (probably by restoring the separation between normal banking services and the merchant banking exotica?) Also by defining some scale limit and ensuring they are NOT TBTF?

    2. Rewriting the Basel regulations in some way? (I think you have some correction in mind)

    3. Banking oligarchs power limitation? I have no idea what your thoughts are re this issue.

    4. Regulating the derivatives market?

    You can deduce from this that I am interested in learning of the fix and what we can do to have the people with authority put the fix in place. Your contributions to date are much appreciated and I look forward to further gems of information.

    Would you care to correct/refine/replace the issues and causes list and then define what are the fix actions required?
    thanks and regards

  68. Pers,
    What is ‘automatic solidarity’ and ‘oil-autocrat chavez’? Are these part of the problem causes?

  69. Per Kurowski

    (I was trying to reply to your reply, but there was no reply button)

    OK, i agree with you that the problem is TOTALLY bigger than just breaking up the bank oligarch’s, but, it is a victory that a once IMF “higher up” has taken on the GOLIATH bank oligarchs! I COMPLETELY feel your frustration, and the only thing that i know is that we all have to learn, and all need some fast paced learning–Simon INDEED has modified and evolved from the apparent position noted in the quote you gave us, and the same can be said for anyone who is trying to turn back the veil of propoganda that we are fed day in and day out by our main street media.

    I am sorry i never read your blog before, and now, i will hear your voice, thank you!

  70. PS to Per

    I completely disagree that what i said was nonsense. The only thing i agree on is that focus on the oligarchs is only one part of the problem…in my opinion, the breaking up of the banks is like cutting up a worm…without ENDING THE FED, we will always have a corrupt power machine legislating criminality.

    Please ask your reps and senators to support HR1207 and S604 respectively…here is a website to see if they are doing so:

    The link below directs you to a site where you can look up contact info for your local elected officials. Just type in your zip code, then your elected officials’ contact info pop’s up and a personalized letter is there for you to copy and paste into a letter for you to either email, fax or mail to your representatives, and senators. I suggest you also take this link, and this info and email it to ALL your contacts—if WE THE PEOPLE don’t use our power to VOTE, we may lose our republic! Our future has been robbed and it is time for justice!


  71. You can explain the what to do, long and complicated or brief and easy, I prefer the latter because I run less risk of obfuscating the truths.

    The bank regulatory bible is called Basel II and you can find it here:

    In its 347 pages you will not find one single word about the purpose of the banks because the only purpose for the regulators was that no bank should default. Well I do not care one iota for the banks not defaulting if that does not make the world a better place, and I do not care one iota if banks default but leave progress in its wake.

    And so, the first thing to do is to define the purpose of our banks. Once that is done you will immediately see that you must scratch the whole Basel paradigm and start from scratch, the sooner the better.

    Why is this so? Because the basic pillar of the Basel regulations is the capital requirements based on perceived risks. For instance if a bank lends to an AAA rated client it is only required to hold 1.6 percent in capital but when lending to an ordinary unrated client then he needs 8 percent. That 6.4 percent difference in bank capital, which costs a lot, amounts to an arbitrary tax on risk… which is pure lunacy, for various reasons:

    Not the least because just the fact that something is perceived as having less risk does not make it more worthy of financing.

    Not the least because most often what is perceived as having a low-risk will, on its own, induce more carelessness than that which is perceived as risky… so much that one could even make a case for higher capital requirements for what is perceived as less risky.

    Not the least because to decide the perceived risk the regulators appointed the credit rating agencies and with that doomed these to be captured by special interest… and of course, as human fallible agents, they were sooner or later doomed to make a mistake… like when their AAA signs lead trillions of dollars over the subprime cliff.

    Not the least because then we breed bankers who specialize in reading the changes of opinions of their credit rating agencies instead of reading their clients.

    Not the least because the regulators trusting their risk sentries then go to sleep.

    And the list might include some other points that at this late time of the day escape my mind.

    And so we need to get rid of the minimum capital requirements based on risk, which of course has to happen over a period of time, if one wants to avoid freezing up the system… alternatively we must complement the regulators risk-weight with our purpose-weights.

    On TBTF you are right in that I would start by going the separation route but also fixing some absolute limits on market share participation.

    On derivatives the more we get into standards and efficient clearing houses the better but there is no reason to prohibit them outright. I would though prohibit the naked speculation on socially unacceptable outcomes… just the way smoking and dogfights are prohibited.

    On bank oligarchs I believe that doing the above already takes care of much but I would not find regulatory autocrats acceptable either.

    Then I have some other side issues too… like controlling the role of the credit scores, and which in my mind is just an instrument to cheat borrowers into believing that the rates they are being charged are objective rates. As a foreigner in this country I have been sadden hearing parents almost worrying more about their children credit scores than their grades.

  72. Automatic solidarity! Yes, as longs as it makes so many line up automatically on one side or the other of some outdated ideological divide, and thereby block the society from doing what it should rationally do on a case by case basis, it becomes a major problem… for any reform.

  73. Pers,
    I am impressed. This is a real catchup class! I suppose the problem is that the power wielders don’t agree with your problem identification/causesolution set?

    This does not seem out of synch with Simon Johnson’s comments. I assume you would want to see Basel rewrite have more prominence.

    What has got me puzzled is if all this is clear, why has no action been taken and who is standing in the way and for what reason?

    Am I on the right track? Seems like a draft of Basel rewrite key points attached to info to hand and we have a package capable of attracting supporters?

    At this point I am well out of my ‘banking’ depth. What has to happen to make the fix a reality? How do we make it happen? Maybe a copy to each G20 nation?

  74. Oh yes it is quite out of synch with Simon Johnson’s comments who also speaks too little about the purpose of bank and too much on how to get revenge.

    My main issue, that given capitals are coward regulators need to stimulate prudent risk-taking instead of that imprudent risk-aversion they have been pushing, is something completely ignored by Simon and I would say by most others.

    Why is it so? That is the power of a paradigm. One of these days they are going to wake up totally convinced they have always believed the same what I say.

    And that is then going to be their new box.

    Now I am out for today. cheers

  75. notabanker and Per

    my favourite fix which would well synch with Per’s take on risk would be to make one of the seven sins, i.e. PRIDE, fashionable, albeit in the currently considered to be un-cool stuffy professional pride (it seems there really existed Prussian civil servants who were to proud to consider taking bribes)

    an investor proud of his professionalism and merchant ancestry would not have gone for those AAA-balloons just like (hopefully) a Venetian merchant would not have sent pirates against the vessels of his neighbours
    – as this example from the past shows, it seems I am probably dreaming again of the impossible? or is it a question of whether his society would expel him if he were caught at it?
    but still this professional pride exists one a very individual basis one can meet it again and again wherever people refuse to do a sloppy job because they would feel degraded by consenting to it – but people to stick with it unfortunately tend to be judged on the stupid side unless of course it is the plumber fixing something in your house then you adore him

  76. Per
    if you really want to get the shivers you should get a hold of Elias Canetti reading from his book on behaviour of masses
    – even if you do not understand German you can hear the swirling and concentrating he describes, this kind of sucking in force he is so terribly good at evoking

  77. First of all many of the German 1848ers who believed in reform left after it failed, some were jailed and some where killed. Hard to have leaders when there are few left down the road. My paternal Grandmother was 2nd generation 1848er on both her parents sides one from Bohemia the other from near Holstein. I grew up with their stories. I am not an expert in that area outside of family stories, origanal works, and history books. From this, I thought it was an intellectual revolutionary period on many levels as much of what we saw prior to the 1930’s where ideas that came from that period and where used in many fields that revolutionized thought. My field is Ancient and Early Medieval Studies — history, archaeology, languages, literature. My interest is in cultural change through invasion and trade. So I might be wrong. But I will say every movement has both its good points and its bad elements depending on perspective of history.

    As for your comment on Clans. I never said they were good or bad — they are just a unit. Family status is not the same today as it was then and to try and compair them is a bit difficult. The status came from ruling class not money, though money could be involved. Though this was not set in stone all over Europe, usually the eldest son would gain the family lands and title, the second the mother’s, the third went to the church and the rest tried to make a living without becoming commoners or by marriage into a female heir family. Last names and titles were taken from where they were going to gain in society in terms of status. Thus only the first child might have the father’s last name. The second son the mother’s name, etc.

    This is James Kwak’s board and my comments were addressed to him and Simon Johnson, but I would be happy to discuss my field to anyone who is honestly interested at the following email (b_a_mogel at yahoo.com) no spaces.

  78. there may have been a Frederick who died in 1250 but that’s not the one I meant, we had lots of Freds through the ages, one was even king of Sicily. here’s the one who installed the reliable non-corrupt Prussian civil servant=Beamte http://en.wikipedia.org/wiki/Frederick_II_of_Prussia
    seems like those garden gnomes are still trying to enlighten us to something http://www.welt.de/kultur/article4845331/Straubing-zeigt-umstrittene-Hitlergruss-Zwerge.html
    I don’t know about art – I wait until it hits me in the stomach, when it does I get interested.
    Garden Gnomes in German carry the implication of the narrow minded bigoted Schrebergarten-owner or rather renter (the land isn’t for sale) because they like to display one or two or many – here they are lampooned (they speak Bavarian German)
    but as I am convinced that the Heidegger et al adoring crowd was as much in love with righting the world via murder in our 1000-year-Reich as were these Kleingärtners I am prejudiced against the Gnome analogy http://www.youtube.com/watch?v=sxyKWxELXI8

Comments are closed.