The Great Bank Robbery

[Pale Blue Dot]

NEW YORK – For the American economy – and for many other developed economies – the elephant in the room is the amount of money paid to bankers over the last five years. In the United States, the sum stands at an astounding $2.2 trillion for banks that have filings with the US Securities and Exchange Commission. Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits.

That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees. Such transfers represent as cunning a tax on everyone else as one can imagine. It feels quite iniquitous that bankers, having helped cause today’s financial and economic troubles, are the only class that is not suffering from them – and in many cases are actually benefiting.

Mainstream megabanks are puzzling in many respects. It is (now) no secret that they have operated so far as large sophisticated compensation schemes, masking probabilities of low-risk, high-impact “Black Swan” events and benefiting from the free backstop of implicit public guarantees. Excessive leverage, rather than skills, can be seen as the source of their resulting profits, which then flow disproportionately to employees, and of their sometimes-massive losses, which are borne by shareholders and taxpayers.

In other words, banks take risks, get paid for the upside, and then transfer the downside to shareholders, taxpayers, and even retirees. In order to rescue the banking system, the Federal Reserve, for example, put interest rates at artificially low levels; as was disclosed recently, it also has provided secret loans of $1.2 trillion to banks. The main effect so far has been to help bankers generate bonuses (rather than attract borrowers) by hiding exposures.

http://www.project-syndicate.org/commentary/taleb1/English

[sarcasmo]

1. We live in a Plutocracy, America is no longer a Democracy.

[kentuck]

2. What does it mean...?

The banks have even more power to make the yoke that much heavier around the necks of average Americans?

[Turbineguy]

4. I think they don't know how to stop.

The system is in place, they just follow it.

[Turbineguy]

3. Then there's the Republican message:

"If you still have any assets left, be sure and vote for us!" (That way we can give them away).

[tama]

5. In order to rescue the banking system, the Federal Reserve,

which is The banking system, not by the people, not for the people, but... The Monopoly of Power, the only real power in a culture hypnotized by money.

As they say, follow the money... to the source, aka ThePowersThatBe, Sauron's Eye etc., which is the Federal Reserve and the whole global Central Banking system.

Follow the money, and see how to strike at the root of the problem.

[banned from Kos]

6. Ron Paul nonsense. No liberal economist wants to get rid of the Fed

(If that is what you said)

[tama]

7. Duh

Liberal, neoliberal, schmeoliberal "economists"... they are all delusional. Well, there are some exceptions and people starting to wake up, Nouriel Roubini admitted while ago that Marx was right in his analysis of capitalism, that it is self-destructive.

But how hard can it be to understand a very simple thing, that unlimited growth on a limited planet simply is not possible?

And let me say this, "left" or "progressives" will get nowhere and accomplish anything as long as they hang themselves to debt based FIAT money system and central banking system created by Dick Nixon and neoliberal policies created by Reagan. Kennedy wanted to create People's bank and people's money, that's why they offed him.

Libertarians can at least make some sensible conversation and point out the real roots of our problems, even the right wing libertarians. Left wing libertarian myself, like Chomsky and many other good people. (Neo)liberals of both wings of the Corporate Party Inc. are just delusional and/or masochists.