Lies, Damned Lies and… Bankers

One of the more prevalent half-truths of living in the USA these days is that what is good for Wall Street is good for all of us. It is a variation of the old “what is good for GM…” and, like its predecessor, it is equally fallacious. One need only look at the past 6 years to see that a booming market with unprecedented profits doesn’t translate to more jobs, let alone wealth trickling down. In fact, the truth is quite the opposite.

Much of the wealth generated on Wall Street is in the financial sectors, with banks and other financial institutions generating the majority of wealth, primarily due to a system that has been rigged by the government. The result is something that is felt in nearly every community in the US, especially among working class communities. For an excellent primer on how the financial sectors have been rigged against the interests of working families, I recommend Matt Taibbi’s series in the Rolling Stone.

To understand how allowing a rigged banking system affects our daily lives, consider this example. Interest rates of money transfers between international  banks are set by a small group of individuals from a small  group of banks, called LIPOR. These few lucky bankers set interest rates hours before the markets open, which has at least two consequences. First, is that the information on rate changes before markets open can result in huge profits for anyone who knows the information, and there is ample evidence of insider exchanges. Secondly, it means a few bankers motivated by financial gain can set rates that can (and have) devastating effects on municipalities from Greece to Detroit that rely on rates for loans and bonds to fund everything from schools to roads to powers sources. Manipulated money rates have resulted in the severe deficits of cities and municipalities such as Detroit more than any other cause.

For those of us who have commiserated about the awful choices Obama has made to his cabinet in his first term, the cold hard reality has set in that they were deliberate choices to further a policy of wholesale capitulation to Wall St. Take for example the announcement today that a former aide to Sen. Debbie Stabenow, with no experience in financial markets except for an internship for Goldman Sachs, will be appointed the head of the oversight council regulating, among other things, derivative exchanges (the most complex of all financial transactions).  She replaces Gary Gensler, who has made enemies lately by actually trying to enforce the few regulations that do exist on derivative exchanges. These appointments are no accidents folks. 

2 Responses to Lies, Damned Lies and… Bankers

  1. To paraphrase Professor Higgins in “My Fair Lady,” – “I think he’s got it..” Ron Paul was the only candidate to broach the subject of the fiat money system and how it benefits the few connected bankers. The truism that is good for Wall Street is good for main street is pure mythos, and flies in the face of U.S. economic history and the sociopaths in the financial sector.

    By the way, Ron Paul has come out in support of Edward Snowden (the leaker of the U.S government domestic surveillance programs) and described Snowden as a “hero.” I agree. Ron Paul said: “We should be thankful for individuals like Edward Snowden and [investigative reporter] Glenn Greenwald, who see injustice being carried out by their own government and speak out, despite the risk,” Paul said in remarks posted on “The government does not need to know more about what we are doing. We need to know more about what the government is doing…. [t]he Fourth Amendment is clear, We should be secure in our persons, houses, papers, and effects, and all warrants must have probable cause. Today the government operates largely in secret, while seeking to know everything about our private lives – without probable cause and without a warrant.”

    The 4th Amendment has been swallowed by exceptions, and not enforced by cowardly jurists concerned more about their own political careers, than about their oath to support the Constitution.

  2. Rex A. Umney says:

    Snowden a Hero? My idea of a Hero does not run off to Hong Kong and Russia spilling their guts about national security stuff. If it comes to pass this guy Snowden was compensated at all by any other nations for his information I would say the charge should be HIGH TREASON!

    The government has been tapping phones since before the phone was invented! And computers? Ever hear of “Magic Lantern”?

    Putting your trust in the Banks or the Government is a scary thing, but aren’t they one in the same?

    Wake Up!

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