In a recent post, I defended the “1%” as being vital to the economic well-being of our society. Though I believe this to be true, part of me found that difficult to write because there is one segment of the “1%” which are pure poison and which only do evil all the time. These are the central bankers and their puppet masters on Wall Street. While the entrepreneurial class serves a vital function, the bankers serve no vital function that I can tell and only serve to siphon off the life-blood of the middle class.
The primary siphon mechanism employed by bankers to impoverish the middle class over the years since the repeal of Glass-Steagall has been characterized as “socializing the risk while privatizing the profits”. Basically, this means that taxpayers pay to bailout banks that have been wiped out by risky and highly leveraged investments. If the bet succeeds, the bank executive walks away with a handsome bonus and the owners of the banks receive a dividend. If the bet fails, the public is called upon to make good the losses for the sake of the economy.
Honestly, the amount of fraud being engaged in by various elements of the banking industry makes a dispassionate discussion of the topic almost impossible. One recent article (linked below) tallies up the fines paid by banks over the last few years and reports that nearly $200 billion dollars in fines have been paid by large banks for various frauds and almost nobody has gone to jail. The reason that these bankers are immune to criminal prosecution could be that they are “too big to fail” as Attorney General Eric Holder wrote a while back. Or perhaps it is because they are helping to finance our government’s irresponsible spending with reckless money printing? Or maybe both? Whatever the case, the only possible outcome of this astonishing amount of fraud in the financial markets is a crash of epic and perhaps Biblical proportions.
The tragic thing is that all of this has happened before.
“Gentlemen! I too have been a close observer of the doings of the Bank of the United States. I have had men watching you for a long time, and am convinced that you have used the funds of the bank to speculate in the breadstuffs of the country.
When you won, you divided the profits amongst you, and when you lost, you charged it to the bank. You tell me that if I take the deposits from the bank and annul its charter I shall ruin ten thousand families. That may be true, gentlemen, but that is your sin!
Should I let you go on, you will ruin fifty thousand families, and that would be my sin! You are a den of vipers and thieves. I have determined to rout you out, and by the Eternal, (bringing his fist down on the table) I will rout you out.”
Andrew Jackson, in a meeting with the Bankers in Philadelphia, February 1834