Matt Taibbi concluded that the 2008 Wall Street bailout had “built a banking system that discriminates against community banks, makes Too Big to Fail banks even Too Bigger to Failier, increases risk, discourages sound business lending and punishes savings by making it even easier and more profitable to chase high-yield investments than to compete for small depositors.” In this post-crash environment, the largest financial institutions gained more of a hegemonic grip than ever, with the five biggest banks having come to own almost half the industry by 2015.
BlackRock is a global financial giant with customers in 100 countries and its tentacles in major asset classes all over the world; and it now manages the spigots to trillions of bailout dollars from the Federal Reserve. The fate of a large portion of the country’s corporations has been put in the hands of a megalithic private entity with the private capitalist mandate to make as much money as possible for its owners and investors; and that is what it has proceeded to do.
“But I can tell you that the ruling elites, given what they’re doing in Washington and their utter refusal to respond in a rational way to what’s happening to larger and larger numbers within the citizenry, are playing with fire and playing with their own destruction.” — Chris Hedges
Insolvent Wall Street banks have been quietly bailed out again. Banks made risk-free by the government should be public utilities.
When the Dodd Frank Act was passed in 2010, President Obama triumphantly declared, “No more bailouts!” But what the Act actually said was that the next time the banks failed, they would be subject to “bail ins” – the funds of their creditors, including their large depositors, would be tapped to cover their bad loans.
Congress seems to be at war with the states. Only $150 billion of its nearly $3 trillion coronavirus relief package – a mere 5% – has been allocated to the 50 states; and they are not allowed to use it where they need it most, to plug the holes in their budgets caused by the mandatory shutdown. On April 22, Senate Majority Leader Mitch McConnell said he was opposed to additional federal aid to the states, and that his preference was to allow states to go bankrupt.
Moderate Rebels on Apr 20, 2020
Facing the Covid-19 pandemic, the US Congress rammed through the CARES Act — which economist Michael Hudson explains is not a “bailout” but a massive, $6 trillion giveaway to Wall Street, banks, large corporations, and stockholders.
“And they launch military spending programs that have transformed the United States into a permanent war economy. Rather than a laissez-faire government that does little, we have a corporate state that plays an increasingly active role in sustaining the process of capital accumulation for big corporations.” — Michael Parenti
with Chris Hedges
RT America on Sep 10, 2016
On this week’s episode of On Contact, Chris Hedges sits down with economist Mark Blyth to discuss the detrimental ramifications of austerity programs following the 2008 financial crisis. Professor Blyth, author of “Austerity: The History of a Dangerous Idea” addresses the political effects of the spending cuts and considers why the elites will not take responsibility for the fallout. RT Correspondent Anya Parampil examines the impact austerity measures have had on the American working class and the poor since 2008.
Part B to the Insider’s Economic Dictionary.
Bailout: Reimbursement to speculators and savers of losses incurred by bad loans, investments or deposits in banks that fail. The effect of this moral hazard is to preserve financial control in the hands of the economy’s wealthiest 10 percent, “making them whole” by shifting the loss onto the bottom 90 percent of the population in order to benefit those at the top of the pyramid (see Rentier and Oligarchy).
Nov 7, 2012 by StrikeDebt
We need a jubilee, a clean slate, a cancellation of debt for the 99%.
The Rolling Jubilee raises money to buy debt. But instead of collecting on the debt we buy, we’re going to abolish it. It’s time for a bailout of the people, by the people.
For those who are interested in the real world, a look at the actual history suggests some adjustment — a modification of free market theory, to what we might call “really existing free market theory.” That is, the one that’s actually applied, not talked about.
And the principle of really existing free market theory is: free markets are fine for you, but not for me. That’s, again, near a universal. So you — whoever you may be — you have to learn responsibility, and be subjected to market discipline, it’s good for your character, it’s tough love, and so on, and so forth. But me, I need the nanny State, to protect me from market discipline, so that I’ll be able to rant and rave about the marvels of the free market, while I’m getting properly subsidized and defended by everyone else, through the nanny State. And also, this has to be risk-free. So I’m perfectly willing to make profits, but I don’t want to take risks. If anything goes wrong, you bail me out.