February 2, 2011

I was born in a country which had within it an economy. I believe we now have an economy which calls itself a country.  My sense is that our nation is no longer governed by the people but rather ruled by a cabal of CEO’s most of whom run banks.  But these “banks” no longer do much of what banks used to do.  They now lobby congress for rules changes which allow them to do things that were once labeled criminal.

For example, loan sharks were jailed for charging rates less than some of these “banks” charge the economically disadvantaged today.  And, not surprisingly, they pick on the same people that the sharks used to feed on.

These “banks” also create things that they call financial instruments that are essentially bets against securities they are selling to clients.  And to make matters worse they can bet thousands of times the value of the securities.  It’s been said, and rightly so, that it’s essentially the same as buying many fire insurance policies on the same building so that when the building burns the insurer pays thousands of times the value of the building.

A couple of years ago when these banks, through all sorts of risky games, put the world economy on the edge of an abyss there was talk that many of these firms were too big to fail; meaning that if they were to fail they would take the world down with them.  This was determined to be a fact but nothing was done to make them smaller.  Therefore, we have essentially told them that if this happens again we will once again save their collective butts so go ahead and play your games and reap your ill-gotten harvests and when you fail we’ll be there.  We have, all of us, become the prodigal parent.

The worst thing about all of this nonsense is that it is legal in the USA.  So, how can this be?  The only answer is that the perpetrators are making the rules and they are backed by our supreme court as I believe can be seen in their decision in the Citizen’s United case where they allow corporations to spend whatever they like in support of political organizations backing individual candidates.  Corporations have been told that they have the same rights as ordinary citizens but there is nothing ordinary about their power given the vast sums of capital they control.

Posted February 2, 2011

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