Bank off of America
March 5, 2013 at 10:45 am in News by Dustin Siggins 8 Comments
Recently, Bloomberg conducted a study on a federal bank subsidy that, according to Bloomberg, shows that “the largest U.S. banks aren’t really profitable at all.” Instead, banks are making profit solely upon a lower borrowing rate, to the tune of $83 billion annually. The study concludes:
Banks have a powerful incentive to get big and unwieldy. The larger they are, the more disastrous their failure would be and the more certain they can be of a government bailout in an emergency. The result is an implicit subsidy: The banks that are potentially the most dangerous can borrow at lower rates, because creditors perceive them as too big to fail.
According to a follow-up editorial, Bloomberg’s editors note their estimate is one of many calculating the size of the subsidy. The estimates range from $30 billion to $300 billion annually.
As the editorial also notes, this subsidy is devastating to the American taxpayer and economy. Not only is the subsidy large (and, at any size, immoral), it exacerbates the problem of Too Big To Fail, thus incentivizing another financial meltdown. From the editorial:
The repercussions of taxpayer support for banks are far- reaching. To steal a thought from a previous editorial, if you subsidize corn farmers, you get too much corn. If you subsidize banks, you get too much credit. As of September, the total debts of households, companies and governments in the U.S. stood at 2.5 times annual economic output, up from 1.3 times in 1980. While it’s hard to say what the right level should be, the recent credit-related crises in the U.S. and Europe suggest we’re pushing the outer limits.
The editorial and the study offer a variety of potential solutions, but almost anything is better than setting the American people up to bail out the banks again. Too Big To Fail has been in the works for decades, but that does not mean it should continue. Kudos to Bloomberg for raising awareness of how bad bank bailout policy continues.
“Too Big To Fail has been in the works for decades, but that does not mean it should continue.”
But unfortunately for Americans, It will continue. No matter how much noise the public makes about the issue, The American government is just going to ignore them.
I’m placing my bets on an interior-rebellion, Ultimately rendering America susceptible to invasion.
This has been in the works for 100 yrs, since 1913. The fed (banking system) is designed to create credit for the government, so the gov can do what it wants without real restraint. Without the fed, we probably would not have entered WW1. Hence, Europeans would have settled that war in a more reasonable manner than it did. There would have been no hitler, WW2 and no communist takeover in Russia. Think of where the world might be if none of THAT happened. END THE FED!
the government is giving tax payer money to banks so tax payers can pay extra for using money that should be thiers in the first place .You are right about rebellion . Thats all that is left when all the talk is done . Does that sound like history. We will be open for attac from insidethe country and out .
All our politicians are beholden to the Healthcare, Financial, and Defense industries. We need campaign finance reform but some would argue Freedom of Speech infringement.
What is the difference between an editorial endorsement or slanted news story and a political ad?
“The 20th century has been characterized by three developments of great political importance: the growth of democracy; the growth of corporate power; and the growth of corporate propaganda as a means of protecting corporate power against democracy.” -Alex Carey, Australian social scientist who pioneered the investigation of corporate propaganda (see Taking the Risk Out Of Democracy, Univ of New South Wales, 1995)
“It is normal for all large businesses to make serious efforts to influence the news, to avoid embarrassing publicity, and to maximize sympathetic public opinion and government policies. Now they own most of the news media that they wish to influence.” – from The Media Monopoly by Ben H. Bagdikian
Following reports of serious financial abuses in the 1972 Presidential campaign, Congress amended the FECA in 1974 to set limits on contributions by individuals, political parties and PACs. But politicians exempted the commercial press, because the 1st Amendment prohibits abridging their freedom of speech and the press.
The Press Exemption: 2 USC 431 (9) (B) (i) exempts newspaper, broadcast and magazine corporations from the definition of contribution and expenditure
Giant media corporations are allowed to raise and spend unlimited amounts of money influencing the political process because their political communications are said to have no value.
Since Watergate regulations based on the definitions of expenditure and contribution have restricted the speech and press rights of every U.S. Citizen political party and organization.
If a group of Citizens pool and spend money to advocate the election or defeat of a candidate using the exact same words that main stream media uses, their communication is considered either a contribution or expenditure.
Media plays in incredibly important and powerful role in our society.
Campaign finance reform proposals that limit the ability of candidates to get their message out merely empower the control of the editorial boards. Challengers, who would benefit more than incumbents from large donations from a small number of backers, have been denied a level playing field.
If campaign laws hinge on the potential of big contributions to buy influence in public matters, the press exemption has only succeeded in institutionalizing the corruption!
One Key to Stopping to Big To Fail, the Depository Institutions Deregulation and Monetary Control Act
Activist from every political spectrum should contact their U.S. representatives and U.S. senators and demand they amend The Depository Institutions Deregulation and Monetary Control Act to read: The U.S. Federal Reserve system shall not buy the debt of foreign nations. This would prevent our federal reserve from bailing out U.S. banks and U.S. businesses doing business overseas. It would also prevent our U.S. Federal Reserve system from bailing out foreign governments.
It was all perfectly legal. Unbeknownst to most of its members, in March 1980 Congress voted a bank bailout into law when it approved the Depository Institutions Deregulation and Monetary Control Act. The main purpose of the eighty-five page act had been to require banks to belong to the Federal Reserve system and to allow commercial banks to accept Negotiated Order of Withdrawal (NOW) accounts.
However, just before the bill was approved by a joint house-senate committee six lines were added at the request of the Federal Reserve Board. It is estimated that no more than ten congressman were even aware of the insert that gave the Federal Reserve the right to buy securities of foreign governments just as it buys securities issued by the U.S. Treasury, thereby allowing the FED to prop up U.S. banks by covering the deficits of foreign governments.
According to congressional and Federal Reserve sources, the inspiration for the insert came from Fed Chairman Paul A. Volcker, an alumnus of Chase Manhattan, which, with other major U.S. banks, stood to gain most from the authorization. The never-publicized legislation explains why U.S. banks continued to lend to countries like Mexico long after the Europeans took Fright. (pg.247 In Banks We Trust 1984,1986 By Penny Lemoux
Visit page 131 of the Federal Reserve GAO report http://www.scribd.com/doc/60553686/GAO-Fed-Investigation
The list of institutions that received the most money from the Federal Reserve can be found on page 131of the GAO Audit and are as follows..
Citigroup: $2.5 trillion ($2,500,000,000,000)
Morgan Stanley: $2.04 trillion ($2,040,000,000,000)
Merrill Lynch: $1.949 trillion ($1,949,000,000,000)
Bank of America: $1.344 trillion ($1,344,000,000,000)
Barclays PLC (United Kingdom): $868 billion ($868,000,000,000)
Bear Sterns: $853 billion ($853,000,000,000)
Goldman Sachs: $814 billion ($814,000,000,000)
Royal Bank of Scotland (UK): $541 billion ($541,000,000,000)
JP Morgan Chase: $391 billion ($391,000,000,000)
Deutsche Bank (Germany): $354 billion ($354,000,000,000)
UBS (Switzerland): $287 billion ($287,000,000,000)
Credit Suisse (Switzerland): $262 billion ($262,000,000,000)
Lehman Brothers: $183 billion ($183,000,000,000)
Bank of Scotland (United Kingdom): $181 billion ($181,000,000,000)
BNP Paribas (France): $175 billion ($175,000,000,000)
Related articles:
Major U.S. Banks At Risk If European Debt Crisis Spreads
http://www.huffingtonpost.com/2011/10/06/banks-wall-street-europe-crisis_n_999204.html
Half Of Top U.S. Banks Made Loans To European Banks: Fed
http://www.huffingtonpost.com/2011/11/07/us-banks-european-banks_n_1080237.html
To stimulate the economy, the FED is lending money to banks at ¼%. But the banks are charging credit card customers 12+%. If the FED is really trying to stimulate the economy, citizens, as well as banks, should receive low interest rate loans. The standard retail markup is 3 to 4 times the price of goods. Shouldn’t’ credit card rates be 1% at the most?
“our” Federal Reserve is not a part of our government
it is a cartel of banks that lend money to the government with interest and maybe possibly influence government directions