The Great Depression on steroids
The story line coming out of Washington and the Federal Reserve is that life is getting better all the time for the American people. It is a false narrative, pure propaganda.
The reality is that the overwhelming majority of the American people remain trapped in a slow moving social catastrophe, almost six years of bankster induced austerity -- savage budget cuts and crippled public services, crumbling infrastructure, high unemployment, home foreclosures, bankruptcies, failing schools, crushing student debt, higher taxes and more public debt.
It is reported that most Americans could not lay hands on $400 to cover an emergency, while the gap in income and wealth between the less than one percent and the rest of the American people grows ever more obscenely wider. Some recovery.
At the heart of this travesty lies the slavish devotion of the federal government -- the Congress, administration and the regulatory agencies -- to the predatory banks on Wall Street.
We all know this.
What we may not all know is that nothing has been done to change the business practices of the banks that collapsed the prosperity of a nation; and on account of this, they have gone on doing what they had been doing.
It is only a matter of time before those practices induce another, more devastating collapse -- the Great Depression on steroids.
But, you say, the Dodd-Frank reforms cleaned up that mess. Think again. Dodd- Frank was written by an army of Wall Street lobbyists, as were the rules to implement even its most mild of corrections.
Party on, Wall Street.
There have been only two tangible results of Dodd-Frank. One is to push ever more community banks and credit unions out of business, allowing Wall Street to gobble up more customer deposits to back their bets. The other is that affordable credit has dried up, as the Wall Street banks abandon lending to businesses in our communities to chase the mega profits in the derivatives casino.
The "too-big-to-fail" U.S. banks have collectively gotten 37% larger since the 2008 banking crisis. The six largest banks now control 67 percent of all banking assets.
According to the most recent quarterly report from the Office of the Controller of the Currency, five "too-big-to-fail" banks now have more than 40 trillion dollars each in exposure to derivatives.
Derivatives, like the interest rate swaps that cost Philadelphia and its school district about $500 million, are bets - and bets on bets, and bets on bets on bets, waiting for one large failure to send Wall Street into a frenzy of calling in the bets, desperate to salvage their paper profits before the losers go bust.