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Banks are doing great! Are you?

November 12, 2011

A Nov. 7, 2011 article in Fiscal Times notes that the largest banks have enjoyed tremendous success over that last months…

“The largest banks, including Bank of America, Citigroup and Wells Fargo, earned $34 billion in profit in the first half of the year, nearly matching what they earned in the same period in 2007 and more than in the same period of any other year.”

“Securities firms — the trading arms of big banks and hundreds of other independent firms — have fared even better. They’ve generated at least $83 billion in profit during the past 2 years, compared with $77 billion during the entire Bush administration, according to data from the Securities Industry and Financial Markets Association.”

“Compensation at these firms also has bounced back. Financial firms paid about $20.8 billion in bonuses for work done in 2010, according to research by the New York state comptroller. In New York City, the average Wall Street salary last year grew 16.1 percent, to $361,330, which is more than five times the average salary of a private-sector worker in the city.”

“By contrast, millions of Americans continue to face economic difficulties. That is fueling broad public anger at Wall Street and has given rise to the “Occupy” protest movements nationwide. Obama’s advisers say they plan to harness this frustration in the presidential campaign by drawing a contrast with Republican candidates who favor rolling back the Dodd-Frank legislation.”

I don’t take exception to this “harnessing”. I think Dodd-Frank should be fully funded and enforced with extreme prejudice. Unfortunately I don’t see the Republicans OR Democrats following my suggestion. The financial big wigs have their pockets filled with politician’s hands. Washington’s version of “close scrutiny”.

I don’t even mind that Obama has accepted more campaign contributions for himself and the DNC than for all Republicans combined. Why shouldn’t they love to keep Obama in office. He didn’t move in for the kill when he had the chance and the public backing. During the heat of the meltdown in 2008 Obama could have easily followed the advice of many pundits and just let the banks try to survive without taxpayer bailouts. He also could have required them to make abused mortgage holders whole but he didn’t. He also could have rolled back to the days when banks could not invest in the market but he didn’t. Instead he gave them loans at near zero percent and allowed them to continue without altering the practices that brought meltdown upon us.

The big lesson I see here is that 2 years after the worst fiscal collapse and the most generous government rescue, the financial corporations not only maintained their perilous course – they resisted any actions that would benefit the taxpayers whose funds they sourced. Instead the banks took our money, righted their boardroom chairs, brought in their investment experts and made some bets, and no doubt some hedges. What they did NOT do is open the loan department to homeowners or businesses of any kind. In other words they acted in pure, greedy self-interest without any regard for the general society in need of their services. They spent all their energy and resources helping themselves and ignoring others.

This is the fundamental modus operandi of corporations: “Feed thyself – screw the public-at-large”. Given the extreme economic setting we’re in my first reaction is that this behavior is unpatriotic. It may not be indictable but its outlandishly selfish, reprehensible, immoral – and all too common among large corporations. Observing this behavior in the banks supports my “faith” in Pharmaceutical companies and Health Care insurance companies. I am sure that they have the same mode of operation and that they would have continued ripping into the public if Obama had not stood up to them with the Affordable Health Care thingy. Morons will scream “Socialism” and paint stubby mustaches on the Commander-in-Chief but I believe he stood up to the enemy within – greedy, self serving corporations that put profit ahead of people.

So – note well how well the banks are doing these days. Pay attention to what they did with our money. When the country needed them to lend – they didn’t. And use this reality as a frame of reference when trying to understand the choices we have in other areas of our economy, especially Health Care. IF we allow corporations to have their own way, without oversight and sharp-toothed regulation, they will feed themselves to bursting and throw the crumbs to the rest of us. They will reward their officers wildly for devising new ways to profit over people. It’s in their nature.

This is a perfect illustration of where Occupy Wall Street came from. Citizens are angry at what the banks did and are doing. Citizens are frustrated that corporate America is working against them – with impunity. The only way we can begin to win, or even feel less than abandoned, is to join together in common frustration and try (at least TRY) to lift ourselves up. Support your local Occupiers.

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