This. The real irony about the banks is that by heavily regulating banks and explicitly backing them, we also implicitly allow this sort of abusive behavior towards customers.
During the fallout from the housing bubble, it became apparent that many loans had not been properly transferred as they were sold from one investor to the next. The result of this was that many foreclosures were brought with essentially forged papers--servicers worked overtime trying to cover up broken paper trails. The courts in some states, esp. Florida, looked the other way as this bogus paper was passed in front of them.
I'm very supportive of regulating banks, both in theory and in reality. But we can't just wish away corruption and influence. Especially since so much financial activity is highly technical and the only people knowledgeable enough to create and enforce reasonable regulations are the same as the people conducting those activities that need to be regulated in the first place.
I'm not sure of the fix, here.
The more I follow politics, and the media in general, I am leaning towards describing the entire thing as a giant soap opera where the media only "comments" or "gossips" instead of reporting facts and assigning provable blame. Everyone just passes off blame, no one really can hold anyone else accountable, and the cycle just repeats constantly. This is a fault of the system in that it allows blame to be passed along like that. The problem never really being addressed, just half-assed by each batch of politicians so that they can simultaneously take some blame, take some credit for trying, and also not be held accountable in any way.
the interesting question is whether or not there ever really was a cycle where the citizenry were informed, and could collectively influence policy.
even if we were just being naive, the abandonment of that model doesn't seem to have empowered the populace - seemingly the opposite.
Essentially, yes. Everything is relative, and since we have no base-principles to infer complex laws/rules/behavior from, we're constantly bickering with one another about minute details.
>"the interesting question is whether or not there ever really was a cycle where the citizenry were informed, and could collectively influence policy."
That's an interesting question. I can't say I can think of such a time. But I guess as a seemingly-intelligent and connected society with all of humanity's knowledge available at our fingertips, we should be striving for such a thing. Not defending an already-broken system just because we've decided it's "good enough".
It's nigh-impossible to actually do any sort of "corrective" maintenance on the system we have in place. Just look at Trump, or Brexit. The much-touted "checks and balances" is actively hindering his policies from being enacted (the one that got him voted in). Additionally, with Brexit, it's exposing just how complicated and intertwined global "contracts" and laws are between nations. In both cases we have giant behemoths of laws and processes in place to simply stunt any sort of correction or movement in any direction (whether good or bad). At that glacial pace, I don't think our life-spans are enough to see things through, or see drastic change or experiments when it comes to the models of government we've already-defined and have available.
But we are seeing in US politics a world emerge where shame doesn't work, where players don't even try to appear honest, and where the very idea of consensus factual external reality is under attach.
In such a world, it will take a lot more than daylight to nudge good behavior from folks. It will take actual fear of being sent to jail.
The silver lining is that Trump was a wake up call. Many, many of my non-political friends contacted me and asked "What do we do? How do I start?" Our boring party meetings have triple the attendance. Any thing that needs doing now gets done.
For my part, I started a book study group, mentoring my friends how to be activists. For example, an upcoming homework assignment is testifying at a public hearing (local city or county council). Most of us have never even attended a meeting before.
Exciting times.
I'm not sure of the fix, here.
2. We need to teach humans how to manage their own money and not give it away willingly to corruptible humans.
Problems in complex systems with large numbers of variables, attractors, etc are not solvable by just doing a single thing (if it was, it's not a complex system :P)
This kind of "if only x" thinking, IMHO, does not lead to actual solutions. It usually just leads to some other gravity well of the system, where now someone else says "if only y".
If you want to give ammunition to anti-capitalist movements, I strongly endorse returning to this model.
Of course, if you want to give ammunition to anti-capitalist movements, I also recommend that we continue to bail out the people who did have a hand in the impropriety.