Somali Pirates were condemned when they hijacked tankers, took sailors hostage and demanded million-dollar ransoms. But their demands were a drop in the bucket compared to the ransoms demanded by Wall Street.
And the Somalis were kinder to their hostages than Wall Street is to millions of unemployed Americans. For while the Somalian pirates returned hostages unharmed, bankers, fraudsters and failed insurers continue to harm the US administration and hold millions of Americans hostage. The latter are being stripped effectively, of pensions, savings, livelihoods and jobs.
The Pentagon ordered the US Navy to apprehend Somalian pirates. However there has been no such 'Counter Piracy Execute Order' from the White House or US Treasury and aimed at Wall St. buccaneers. On the contrary. The US Treasury, like the British government, is capitulating to the pirates of the finance sector with a haste and a timidity that is unseemly, and if I may say so, unmanly.
Britain's government announced yesterday that while it was obliged to take a 65% stake in a 'broke' bank - Lloyds - it was refraining from exercising its full rights. The government would not, for example, use its stake in the bank to give taxpayers full control. Nor would they call for the resignation of CEOs and board members responsible for breaking the bank. Lord Mandelson the Business Minister said this was neither "necessary or desirable".
The US Treasury has set the pattern. While filling the vaults of Wall Street banks with taxpayer-backed funds, Secretary Geithner has refrained from asking for letters of resignation from the board members and CEOs that broke the banks. These banks have used their control over the nation's deposits and savings and over interest rates to hold the whole economy to ransom.
The US administration, like the British government, is pumping taxpayer-backed 'liquidity' into these banks without giving taxpayers full control over the banks.
The liquidity has gone through the front door. An indecent proportion has been funnelled straight out the back door to pay bonuses to failed executives. The rest of the loot has been grabbed and hoarded by the banks and is not being lent out to companies and households at affordable rates.
In other words, the pirates have been paid a handsome ransom and left in charge of the hijacked ship that is the nation's finances.
All this daylight robbery and confusion takes place because policy-makers - at the US Treasury, the Federal Reserve and the British government - do not understand what is going on.
Let us spell it out for them. Banks are going bust because their customers cannot repay debts, or afford to borrow. Customers cannot repay debts because a) these debts exceed their income and/or assets and b) because the interest rates or borrowing costs on these debts are too high, and unpayable. If you don't believe me, ask Warren Buffett. He tells shareholders that "highly-rated companies, such as Berkshire, are experiencing borrowing costs that, in relation to Treasury rates, are at record levels.
Though Berkshire's credit is pristine - one of only seven AAA corporations in the country - (its) cost of borrowing is now far higher than competitors with shaky balance sheets but government backing."
Millions of individuals and many thousands of companies are now unable to borrow. Burdened with huge debts by de-regulated lenders and financiers, many are being bankrupted by record high borrowing costs on their debts.
This is the real crisis in the economy. And the Federal Reserve declines to address this crisis of high real rates of interest.
Because they are facing insolvency, companies are firing workers. This is pushing up unemployment to levels comparable to those at the height of the Great Depression. Unemployed workers can't pay debts. It's simple.
Our graph below gives the real unemployment figures. Last week the Labor Bureau suggested that only 5 million people have lost their jobs in the last twelve months, and that only 12.5 million people are unemployed. We think that is optimistic.
The Bureau does not include in the official release, 'discouraged' employees or those working part-time because they simply can't get full time jobs. Dig deeper, and the percentage unemployed today is almost double that announced on Friday: 15%. We predict if policies are inadequate and interest rates stay high, that it will be as high as 20% by the end of this year. That will bring unemployment - under President Obama's watch - close to the level it hit, 25%, at the height of the Great Depression in 1933.
These millions of unemployed are American hostages tied up in a global economic failure not of their making.
They are desperate for the Federal Reserve to act as decisively as the Pentagon, and take on the banking pirates.
This cannot be done by pumping more taxpayer-backed money into the banks. Why? Because the crisis has moved on. It's no longer a crisis of liquidity, but of solvency. Banks cannot be made solvent by taxpayers. They can only be made solvent if and when companies and individuals can afford to borrow, and to repay debts.
By throwing money at the banks, and by refusing to take full charge of how they are run; by refusing to lower borrowing costs, US Treasury officials and the Fed Reserve are dodging the big issue: corporate and household insolvency.
Cutting borrowing costs would start to address the solvency issue. Putting a floor under insolvent companies and insolvent homeowners - would save the banks. At the same time it would release the hostages that are the unemployed, the elderly, the savers and the entrepreneurs.
The Federal Reserve can begin to lower borrowing costs by measures known as Quantitative Easing (QE). These were adopted by the Bank of Japan in March, 2001, and by the Bank of England last week. QE does not mean 'printing money' - this is a widespread misunderstanding. (For more on QE, click here.) QE will help to lower interest rates and therefore borrowing costs. Governor Ben Bernanke is still ignoring the experience of Japan and the way in which QE was used to lower rates and loosen the grip of insolvency on the economy.
He must adopt QE measures urgently. The Obama presidency has only just been launched on a wave of excitement and anticipation. If it is not to end with a hostage crisis of mass unemployment, rising crime, hungry children and riots outside banks, then the Federal Reserve and the US Treasury must take control.
http://www.huffingtonpost.com/users/profile/research?action=profile
How about they are all jailed instead and all of their personal assetts (stolen loot) are reclaimed by the government?
The problem is the lack of money or the lack of credit that is available to energize the economy, right?
Well where did the US Treasury get the Trillion plus to give to the banks?
The US Treasury borrowed the money from the Federal Reserve Bank which charges the US Treasury an interest.
Where did the Federal Reserve System (Bank) get the Trillion Plus?
The Federal Reserve printed it out of green paper with nothing but a promise from the US Government to pay back the Trillion Plus loans with interest.
So why can't the US Government print its own Trillion Plus and loan it out to the public to provide the necessary money, the credit to re-energize the economy as is mandated by the US Constitution under Article # One, Section # Eight ?
It can ! Yes we can ! And we , the US Government does not need anyone's permission, not even the Congresses. All we need is for President Obama, like President Andrew Jackson before him did in the 1820s; just dissolve the Central bank, the Federal Reserve System and take back the government's responsibility to run our Monetary System under total US Government control like we do the US Post Office, and the Social Security System. And don't tell me that the US government can't do a better job than the Federal Reserve, a private company owned and controlled by A BUNCH OF FOREIGNERS.
Calling this piracy is like calling the taking of a loaf of bread by a starving man to feed his family a theft. Oh, there's been theft alright, but it takes place on a more elevated and quasi-legal stage and at a far grander scale than what happens with the either the poor man taking food or the somali pirates taking hostages for ransom.
I think they definitely understand what is going on, they are the ones helping the banks loot us. They are acting like they don't know so people won't blame the governments, but they definitely know. Their pro-banker policies say it all.
There is nothing to be confused about, the insolvent banks should be put into receivership and their management kicked out and put on trial. It is all spelled out in the law. The governments are pretending to be confused and ignorant so that the people won't be able to blame them for helping the banks steal our money.
http://www.portfolio.com/views/columns/wall-street/2008/10/15/Credit-Derivatives-Role-in-Crash
Till we stop Swaps, liquidate the Swaps insurance companies, and write off the Swap remaining debt, the economy is toast.
Gawd, I dunno. I hope it gets better and fast!
As you said, there has been no regulation, no resignations, unless by kicking and screaming, no investigations, no grand jury, no nothing but the bankstas grasp around the throats of the taxpayers allowed by their Golden Boy Geithner.
Nothing will work, no confidence will be gained unless these thieves are made accountable. For Citi to be gleeful over some profits when the taxpayers own the darn company, which is only worth that of an auto parts chain, then something is wrong.
As we see riots overseas over this US Made In America Crisis, as Dr. Stiglitz calls it, we may see protests in the streets here sooner than later. The military is gearing up for it. I am sure on June 17, in Erie, PA there will a massive protest when Little Boy Bush speaks at the Manufacturing and Business Association. Ironic isn't it. The Fool outsource manufacturing jobs, and they are honoring him.
http://eye-on-washington.blogspot.com
I hope they are but they will never measure up to the biggest welfare queen the world has ever known.
Wall Street!
Tell me, is she still driving her purple Cadillac laughing and waving those red, blue and yellow colored food stamps out her window? I hear AIG is going to hand out $150 mn of those "foo stants" to the guys riding in the back seat of her Cadillac.
Unfortunately the trap has already been sprung and like in California, it's too late for we the people (main street) to be extracted from the quagmire being manipulated by the perps.
i think you are short sighted in thinking they don't know whats going on -- they have motive, intent and and ambition.
That's like saying the Iraq war happened because we didn't know that Iraq was no threat. Or that the housing bubble happened b/c we didn't know it was a bubble. Both facts were obvious and well-documented.
Isn't fascism when the government (that's us, our money) and the corporations become one? Isn't this plainly and simply the largest wealth transfer in the history of the world? Think of Exxon's record profits qtr after qtr and Maddoff and Enron and all the rest... doesn't it make everything else look like loose change? Isn't this what they call "p0wnd"?
What makes you think they do not understand? Maybe they understand better than you.
and
FORCE HIM TO READ IT!
The arguement that we could seize banks if they were small but because they are big its more difficult?
Well yes, obviously it's more difficult. But it doesn't make it impossible. AND that rationale leads to an idea that bigger banks do not have to play by the same rules as their smaller counterparts. True but not confidence building -and another assault on the American ideas of justice and fair play. NG
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But if a structured approach to breaking up some of the most intractable problematic banks is adopted, and plans shared with the American public. This feeling of Limbo would be alleviated. Confidence needs to be restored more directly. Not saying make an example of one bank. But how about completely getting rid of the idea of mortgage backed securites since this along with the loosening of M&A and interstate banking regs are what started all of this?
Just suggestions.