PhD economist Dean Baker has the best quote of the day regarding Treasury Secretary Geithner's new plan for the banks:
We don't have to follow the individual trades to know whether the taxpayers are being ripped off. We just need to ask some more basic questions like "How much will this thing cost?" If the answer is anywhere much more than zero -- as Geithner suggested it will be -- and we still see that bank stocks carry significant value and bank executives continue to hold on to their high-paying jobs, then we will know that we have been had.The basic point is extremely simple. We have a large number of bankrupt banks. We have a public interest in keeping the banks functioning, but we have zero public interest in giving taxpayer dollars to bank shareholders or to the executives that wrecked the banks they ran.
Geithner can design as complex a dog and pony show as he wants, but if his plan takes up hundreds of billions of taxpayer dollars and does not involve wiping out the shareholders and sending the bank executives packing, then he has ripped us off.
I fully agree, all those who particpated to this mortgage and derivatives scam have to go.
ReplyDeleteTo make our financial reform real we must nationalize FED. The supporting legs Citi, JPM-C & alisass will fall to their due places only after the FED is 100% under government control.
In 1946 UK was in the same position and solved it by nationalizing their Central Bank owned by the private banking empires. It is fair to assume that the owners of this bank were the same ones that own our FED but I have so far failed to find the answers.
It was reported (of course) that nationalization did not make much difference in practice. It was explained that as UK government lacked money to pay for acqusition they ended using IOU's. WHY? Nationalization does not mean that you need to give your shirt to the entity that is nationalized!
It made a huge difference as the owner was from now on the elected government - no more the private profiteering banking empires.
It took almost 100 years for these banking empires solid lobbying, coersing and bribery to get enough their people to US Congress to approve their bid to become the Federal Bank of the USA in 1913.
Regardless of this name FED is still 100% private entity and we the tax payers have no control overt it. It has still not clean how it distributed a few hundred billion dollars of our money to the financial industry.
JFK announced publicly just before his death that he is going to reform the US banking system but before getting started he went to Dallas and the story ended in uncertain circumstances - a coincidence?
Ummmm... if it involves the shareholders losing all their money and the execs sent packing -- then, what you do is let the banks fail. You let someone else come in then from the free market to pay pennies on the dollars, and new management takes over.
ReplyDeleteFDIC insurance then covers the little investors.
So, why save the banks?? Why not let them fail and just use "bailouts" for the FDIC insured amounts.
I think the reason "why not" is because, actually, the rich are getting preferential treatment. The rich are getting bailed out instead of FDIC insurance bailing out depositors as it was set up to do.
I can trust Govt. to get us into messes and make bigger messes as they try to get us out of the first mess they created.
Sometimes, a person just has to let things fail and revalue them... instead of trying to continue bailing after the ship is now underwater. (Kind of a waste of energy.)