We've been duped. Our pension funds are in freefall, unemployment is skyrocketing, foreclosures and personal bankruptcies are on pace to set a record for the years after the passage of the new bankruptcy law in 2005.
Yet some of the big banks are raking in tens of billions in profits and paying out tens of billions in bonuses. And they returned to profitability through their same old tricks--by taking on even more risk with our money, by raising the fees and interest rates that they charge us, by continuing to foreclose on our homes, and cutting lending to small businesses in our communities. Furthermore, they are on a lobbying spree, again using our money . . to lobby against the perfectly sensible reform that Americans want, fighting tooth and nail against the very reforms we desperately need, such as the Consumer Protection Agency that would protect us from their abuses.
In short, despite taking our money, the banks have done little to help revitalize the economy. The bailout was supposed to rescue the larger economy, not turn into a handout/giveaway to Wall Street. Through their risky behavior and clever schemes, the banks have robbed average Americans of trillions of dollars of our wealth. They have taken trillions in bailouts and backstops and have done nothing to fix the overall economy that they crashed.
It's time for the banks to start aiding in America's economic recovery.
The banks need to:
- Stop foreclosures and save Americans' homes and state and local budgets;
- Provide the same affordable loans to state and local governments that banks receive from the federal government;
- Restore small business lending to save jobs and tax revenue; and
- Lower interest rates on consumer credit cards and stop charging abusive overdraft fees that take billions out of consumers' pockets.
And if they refuse to do this, they need to be taken over by the government, given new direction and directors, and eventually be sold back into the free market.
For more on this, see the William Black interview at Barron's Online http://online.barrons.com/article/SB123940701204709985.html?page=2
Here's an excerpt:
"With most of America's biggest banks insolvent, you have, in essence, a multitrillion dollar cover-up by publicly traded entities, which amounts to felony securities fraud on a massive scale.
These firms will ultimately have to be forced into receivership, the management and boards stripped of office, title, and compensation. First there needs to be a clearing of the air -- a Pecora-style fact-finding mission conducted without fear or favor. [Ferdinand Pecora was an assistant district attorney from New York who investigated Wall Street practices in the 1930s.] Then, we need to gear up to pursue criminal cases. Two years after the market collapsed, the Federal Bureau of Investigation has one-fourth of the resources that the agency used during the savings-and-loan crisis. And the current crisis is 10 times as large as that one.
There need to be major task forces set up, like there were in the S&L crisis. Right now, things don't look good. We are using taxpayer money via AIG to secretly bail out European banks like Société Générale, Deutsche Bank, and UBS -- in addition to our own Goldman Sachs. The single most obscene act of this scandal was to give billions in taxpayer money, via AIG, to secretly bail out UBS in Switzerland, while we were simultaneously prosecuting that very same bank for tax fraud. The second most obscene act: providing Goldman Sachs with almost $13 billion in AIG counterparty payments."
Robert Scheer explains:
"Consider the $12.8 billion of the $170 billion that taxpayers gave AIG in bailout funds that AIG then secretly diverted to Goldman Sachs, a company that evidently has a lock on both the Treasury Department and the Federal Reserve no matter which political party is in power. It was the biggest payoff among those that AIG made to a score of foreign and domestic financial giants.
The bailout is a response to a banking crisis that resulted from the radical deregulation pushed by former Goldman Sachs honcho Robert Rubin when he was President Clinton's treasury secretary. Another Goldman Sachs chairman-turned-treasury-secretary, Henry Paulson, in the Bush administration designed the trillion-dollar bank bailout that will go down as the greatest swindle in U.S. history.
It was because of Paulson that AIG was saved from bankruptcy hours after Goldman rival Lehman Brothers was allowed to go down the drain. Why that reversal of strategy in a top-secret meeting called by then New York Fed Chair Timothy Geithner, a Rubin protégé and now Barack Obama's treasury secretary? Why was Goldman's Lloyd Blankfein the only financial industry CEO in attendance? When that news leaked out, his role was defended as that of a noninvolved concerned citizen with expert knowledge, and whose firm had no direct monetary stake in the outcome.
But that was a lie.
