I heard some ignoramus on CNN say that no one should have interfered with the “goings on” of Citigroup, Bank of America, J.P. Morgan Chase, etc. because these companies would have recovered on their own (normal business cycle).
I love to tell stories so here goes …
A Real or Fictional Story of Corporate Deceit and Fraud; and the United States Governments involvement to cover it up.
Here’s the story (fiction or non-fiction, you choose):
There were a bunch of parent companies that owned retail banks, commercial banks, investment banks, and insurance companies (compliments of Congress by repealing the Glass Steagall Act and passing the Gramm, Leach, Bliley Act - cooked up by Republicans who got a bunch of Democrats [and a Democratic White House] to go along with it). ***
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The investment banks engaged in questionable trades and bought shares of stock (for themselves and other investors) in certain assets and companies that they either knew didn’t exist, or at best, were extremely risky . They got investors (individual and institutional) to buy into their questionable dealings. They also bundled a bunch of risky mortgages from the parent companies retail banks and mortgage companies, and sold them to people all over the world, thereby engaging in a worldwide ponzi scheme.
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In addition to that scheme, they also used deposits from their retail banks and bought insurance from their own insurance companies or other insurance companies to hedge their bets. Many of these insurance companies they knew didn’t have enough reserves set aside if things went bad.
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In the meantime, executives were siphoning off profits through insanely outrageous salaries and bonuses. Some of the large shareholders (who consisted of company executives, board members, and the “Wall Street connected” extremely wealthy) consistently voted for and wooed certain board members who agreed with these outrageous executive compensation packages, and they recommended to the smaller shareholders that they go along with their choices.
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All these companies knew what the other was doing; and they were well aware that their schemes were built on a “house of cards” that could topple world economies; however, they didn’t really worry too much because they knew someone (a sheikh or two, the government, their retail bank depositors, corrupt insurance companies, the FED, etc) would bail them out.
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[In addition, these companies and the military contracting companies they bought shares in, encouraged (lobbied) members of Congress, who engaged in the politics of fear [of real and imagined enemies], to use these military contracting companies.]****
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Anyway, when some of these companies “shit hit the fan”, and the stock market kept falling, and people started defaulting on their mortgages because they couldn’t increase their credit card
limits anymore or refinance their homes any more (property values that were over-valued had declined; many had lost their jobs because companies couldn’t compete with foreign imports and closed shop [compliments of NAFTA and other government trade policies]; or companies continued offshore outsourcing jobs to cut labor costs starting not at the top, but with middle and bottom wage earners ).
-limits anymore or refinance their homes any more (property values that were over-valued had declined; many had lost their jobs because companies couldn’t compete with foreign imports and closed shop [compliments of NAFTA and other government trade policies]; or companies continued offshore outsourcing jobs to cut labor costs starting not at the top, but with middle and bottom wage earners ).
The small business owner lost business because various members of Congress (especially conservative members who championed deregulation), consistently engaged in policies and/or wrote laws that allowed large companies to get bigger (whereby small companies couldn’t compete).
People began realizing that they were living in a fantasy world and they never made enough money to pay for their kids college, or invest for retirement, or buy furniture, or dress for success, or buy a house, etc. They were living on borrowed money, and their bank executives and investment brokers, and other people’s bank executives and investment brokers were living high on the hog with their money [that was eventually mostly gambled away].
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The government, to cover up their duplicity in the schemes, yelled the “sky is falling” and feigned gross ignorance. They allowed investment banks to become bank holding companies, and got other countries (debt), the FDIC and tax-payers to loan and bail out all their asses.
Finally (to put the icing on the cake), the (majority conservative) Supreme Court, used a case before it (under the guise of free speech), to allow corporations to further influence politics, thereby giving their blessing to the continuance of these schemes and cover-ups.
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If “Capitalism 201 Gone Wild” hasn’t infected your (especially European) country yet … the story above may become a reality for you.
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Beware …
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Update: September 10, 2012
Update: November 10, 2010As the Country Falls Apart, It's Time for Our Revolution | | AlterNet by Ted Rall
Update October 27, 2010:
***"The Great American Stick-Up: How Reagan Republicans and Clinton Democrats Enriched Wall Street While Mugging Main Street" by Robert Scheer
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**"The Supreme Court Sold Out Our Democracy - How to Fight the Corporate Takeover of Our Elections", by Joshua Holland, October 25, 2010
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**"The Supreme Court Sold Out Our Democracy - How to Fight the Corporate Takeover of Our Elections", by Joshua Holland, October 25, 2010
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Video Added 5/10/2010
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Update: October 5, 2010
The United States is its Own Worst Enemy!
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***John McCain Lies - only 1 Senate Democrat (Hollings) voted for Gramm, Leach, Bliley: All Republicans voted yea, except for 1 who voted present (Fitzgerald) and 1 who did not vote (Inhofe). See also Roll Call Vote
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-'Shadow Elite': Did The Supreme Court Just Trash Free Market And Democracy?
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The Man Who Crashed the World Vanity Fair - August 2009
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Community Reinvestment Act - Wiki
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Latest news:
Volcker Rule Dead? Lawmakers Say Key Reform To Shrink Banks Is Unlikely To Pass Senate
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Lawyers, Guns, and Money by Andy Kroll
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Wall Street Helped to Mask Debts Shaking Europe
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William Black On Why "Recurrent Crises Will Get Bigger And More Disastrous" And Why All Talk Of Change By The Administration Is Just Posturing 2/18/2010-
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Update:
A Trillion Dollar Fraud by John Talbot
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