Wednesday May 22, 2013
The Banks Always Win and You Always LoseJoe Clifford Salem-News.com
Why couldn't the 12 trillion dollars that was given banks to “save” them, instead have been given to consumers who were underwater in their home loans?
(JAMESTOWN, RI) - When banks make foolish and risky investments causing the loss of billions, they need not worry, for you will be forced to cover their losses. The argument that they “are too big to fail” was slickly inserted into the political jargon and became the accepted norm, so any time a bank is in danger because of economic stupidity, you will be required to pay for their irresponsibility; but then again who is stupid, the banks or you?
Around the globe, bankers have turned to taxpayers to cover losses because of their shoddy investments, but why? Why is it your responsibility to pay banks for loans and investments they never should have made? A quick review shows that when the major bank crises occurred in this country the Obama administration quickly rushed to their aid by taking money from you to protect the banks. While no one really knows how much money was transferred from taxpayers to banks, a figure of about 12 trillion dollars is generally accepted; however this may well be underestimated. You were not asked for this money, nor were you consulted. It was a done deal without you approval or consent.
This scenario has repeated itself around the world. Banks make bad investments and when faced with a loss they turn to the citizenry for relief. Take Greece for example. Goldman Sachs helped the Greek government hide their real debt by finagling a complicated derivative package to hide the seriousness of the Greek debt, thus allowing short sighted Greek politicians to borrow even more money. Now that Greece is on the verge of bankruptcy, banks, including Goldman, are demanding reimbursement. Goldman made bundle of money on the initial fraudulent loan that helped obscure the Greek debt by charging the Greek government excessive interest rates, but who is being blamed for the crisis in Greece? The citizens of Greece are the scapegoats, and are being called greedy and excessive, with banks demanding their money back as if the default were the responsibility of the citizens. Faced with an unemployment rate of almost 30%, the Greek government has been told it must cut more spending and use that savings to pay back the banks. Does cutting spending while in a depression thus forcing more unemployment, help a nation’s economy recover? Of course not, it only insures more suffering for the citizenry, but that is not important. The banks want and will get their money, and that’s all that matters.
Spain, and perhaps later Portugal, will be on the verge of insolvency and bankruptcy just like Greece, and once again the banks are insisting on the return of their money, even though they exercised economic stupidity in making the loans in the first place. Ireland has already paid the price of repaying the banks which has cost the Irish citizenry a great deal of hardship, but once again it was essential that the banks get their money and let the citizenry be dammed.
The only country to have bucked the tide is Iceland who found itself on the verge of insolvency with the major financial institutions demanding payment for their bad loans, but the citizens of Iceland refused to take orders from the bank, threw out their government who was courting the banks, and in a national referendum said to world financial institutions, we are not responsible for repaying financial institutions for making bad loans, and refused to pay back the banks and financial world. They were threatened with all kinds of things, but the citizens of Iceland stood tall and refused. The banks lost their money and while the citizens of Iceland suffered for a while, today have one of the strongest economies in the world. This entire scenario and refusal of a nation to pay back banks and financial institutions has intentionally been obscured by corporate media, who is closely aligned with the financial institutions. They do not want the world‘s people to know that they are not necessarily obligated to make good to banks for bad bank loans
What happens on the other hand when you make a foolish or stupid investment and borrow money to improve your business, purchase a home, or improve your home? If you cannot make payment do you get bailed out? Who pays for your stupidity? If you were such a risk the banks never should have given you the loan in the first place. Who is to blame, you who took the money the banks so generously threw at consumers, or the banks that were stupid to make such risky loans? You will pay once again for their stupidity by forfeiting your home, or business.
Until the public gets it, they will be required and told to pay, but consider this. Why couldn't the 12 trillion dollars that was given banks to “save” them, instead have been given to consumers who were underwater in their home loans? If consumers were bailed out they could have saved their homes or business and had money in their pockets to spend, thus generating a stronger and more robust economy. It was a win win situation, banks would have gotten their money back from consumers who could now pay their loans, and the economy would have been greatly stimulated by an infusion of 12 trillion dollars into the economy. Could the 12 trillion have been allowed to “trickle up” to the banks? The 12 trillion given to banks was just hoarded and given to bank executives as bonuses for their savvy. How is the “trickle down” theory working for you?? How long will we allow ourselves to be treated as “saps”?
Salem-News.com Writer Joe Clifford, lives in historic Jamestown, Rhode Island, and has contributed a number of articles relating to foreign policy to newspapers in the Rhode Island area for years.
He graduated from Providence College where he earned an undergraduate and graduate degree. After a lengthy career as a high school teacher he turned to the study of US foreign policy, and then to writing, as a means of expressing an alternative perspective. His reading and research on foreign policy is broad and extensive, especially as the policy relates to the Middle East. His interest in foreign policy was inspired by the American misadventure in Vietnam. You can write to Joe at this address: email@example.com
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