(photo by quaziefoto)
by Ben Cohen
The financial crisis and the Government’s response has basically highlighted the fact that the U.S doesn’t work as a functioning democratic country.
A functioning democracy would have held those responsible for gambling the nation’s resources away, and instituted reform that made it impossible for those criminals to hijack the system again.
Instead, the Bush-Obama Administration doled out tax payers money to the devastated banks to the tune of $12 trillion, refused to hold them accountable, then made sure those responsible stayed in power and engineered a restructuring that explicitly kept them in control.
The word ‘theft’ doesn’t do justice to the grand scale larceny that occurred on Wall St and Capitol Hill.
It has now become clear that the banking and insurance community was essentially operating a giant casino, gambling with money they didn’t have on products that didn’t really exist. The banks leveraged vast swathes of cash while the insurance industry gambled on whether it would pay off. When the debts were called in, and the chips fell to the table, no one had the money to make good. Then, the entire system collapsed.
When the public finally began to understand what had happened, their tax dollars had already been spent. The Bush Administration moved quickly to bail out AIG and capitalize the banks, offering blank checks without stipulation. Then the public voted in Obama believing he would institute a break from the status quo. And sadly, he hasn’t. As Paul Krugman writes on the state of the Obama economic team:
The larger story is the absence of a progressive-economist wing. A lot
of people supported Obama over Clinton in the primaries because they
thought Clinton would bring back the Rubin team; and what Obama has
done is … bring back the Rubin team.
The insidious influence of Wall St types, particularly Goldman Sachs alumni has infected government for far too long. Treasury Secretary Timothy Geithner is a protege of Robert Rubin (a 26 year veteran of Goldman), and has deep connections to Wall St. Geithner has followed the Bush Administration’s policy of giving Wall St whatever it wants at great expense to the tax payer, and there has been virtually no opposition to his blatant pandering.
Goldman Sachs has been allowed to use the U.S government as a tool to enrich itself, mostly because it is government. And as we’ve learned, their influence hasn’t waned after the massive bailout, it has actually increased.
Is it too late to get rid of their insidious influence?
Unfortunately, it probably is, unless there is some sort of grand scale, public opposition. And that means organization, protest, and a serious challenge to entrenched power.
The dangers of giving the banking industry whatever it wants are numerous. Firstly, they single handedly brought the entire Western economic system to its knees, and there’s no guarantee they won’t do it again. Secondly, we simply cannot afford it. The United States government is now over $11 trillion in debt, and much of that is owned by China. No one is calling in the debt now, but there’s no telling what the Asian giant will do in the future. If they decide to hike interest rates, call in a portion of the debt or pull their money out, the U.S economy could literally collapse. Why? Because instead of using that debt to restructure our economy to become more productive, we’ve spent it on ensuring bankers get their bonuses.
The time to speak up about it is now, so call your local congressman and let them know that you won’t let them take any more of your money untill you know where it’s going.
Ben Cohen is the editor and founder of The Daily Banter. He lives in Washington DC where he does podcasts, teaches Martial Arts, and tries to be a good father. He would be extremely disturbed if you took him too seriously.