If on nothing else, the Occupy Wall Street protesters and the Tea
Party protesters do agree that big
banks are a big problem, so what will the Tea Party say about this?
A well-known Washington lobbying firm with links to the
financial industry has proposed an $850,000 plan to take on OccupyWallStreet
and politicians who might express sympathy for the protests, according to a
leaked memo obtained by the MSNBC.
Yesterday the
story broke exposing the memo by the lobbying firm with ties to House
Speaker John Boehner. The memo, written by K Street firm Clark,
Lytle, Geduldig, Cranford (CLGC) is a quintessential example of Wall
Street interests seeking to use their money and their access to influence
the outcome of elections and legislation.
CLGC’s memo proposes that the American
Bankers Association (ABA) pay CLGC $850,000 to conduct “opposition research” on
Occupy Wall Street in order to construct “negative narratives” about the protests and allied politicians.
The memo also asserts that Democratic victories in 2012 would be detrimental for
Wall Street and targets specific races in which it says Wall Street would benefit by electing Republicans instead.
According to the memo, if Democrats embrace Occupy Wall Street (OWS), “This would mean more than just short-term political discomfort for Wall Street.
It has the potential to have very long-lasting political, policy and financial impacts on the companies in the center of the
bulls-eye.”
The memo also suggests that Democratic victories in 2012 should not be the ABA’s biggest concern.
“The bigger concern should be that Republicans will no longer defend Wall Street companies.”
Two of the memo’s authors, partners Sam Geduldig and Jay Cranford, previously worked for House Speaker John Boehner, R-Ohio.
This will certainly be one of the "smoking guns" that I've been looking for.
The 99%’s Deficit Proposal
The disconnect between Congress and the people is vast. For decades,
Congress has been passing laws that benefit the 1%, their campaign donors and
big business interests, rather than creating a fair economy that serves all U.S.
citizens.
With this
report on how to create jobs, reduce the wealth divide and control spending,
Occupy Washington DC shows that Congress is out of touch with
evidence-based solutions, supported by the majority of Americans that can revive
the economy, reduce the deficit and wealth divide while create millions of jobs.
"For forty years, concentrated corporate interests have acted with
intent to take over government and other institutions. We seek an end to the
rule of concentrated wealth and corporate power by shifting control, wealth and
ownership to the people."
Now some of the protesters are "occupying the highway".
Occupy the Highway
Last week, a courageous group of people had already left the Occupy Wall Street camp in New York City and started marching to Washington, DC. Their goal was to bring the outrage and energy of the 99% directly to Capitol Hill.
They're marching to call out the congressional Super Committee, which could cut a deal before Wednesday slashing Social Security, Medicare, and Medicaid
- - while at the same time, protecting tax breaks for the 1%.
After marching nearly 200 miles through the winter cold, they'll cross through Baltimore and prepare for their final push into Washington on Tuesday, just before the Super
Committee's deadline.
Dozens of supporters have joined the march along the way. But it's up to all the rest of us to help share their story and make sure that by the time they get to Washington,
Congress and the rest of the country is expecting them.
The marchers' stories are powerful, and Congress needs to hear them before they slash programs that so many
of us rely on.
MoveOn.Org met up with the marchers yesterday and filmed a short video to help spread their story. It's critical that as many people as possible see this, as the Super Committee nears its critical deadline.
Does someone usually critique or criticize someone
else as to how they're doing something, especially if they're doing
something much better than the one who's criticizing?
Doesn't their "advice" usually end up sounding like
sour grapes?
Think about how the U.S. and European economies have fared over
the last 30 years, and how America's middle-class has
declined, and how our banks and politicians crashed our housing
market, and how so many jobs went to China, and how our banks have
gauged and foreclosed on American consumers, and how long and deep
our recession has been over the last 3 years.
Then think about how well China has done over the last 30 years,
and then read this
report from the International Monetary Fund (IMF)
scolding China's nationalized banks, but at the same time, praising
China's economic success....
The I.M.F. said that state controls over the economy were partly to blame for
soaring property prices, excessive bank lending and mounting local government
debt, and that these were among the growing risks that threatened to undermine
the country’s economic boom.
The report was the latest effort by the I.M.F. to pressure Beijing to quicken
the pace of its economic reforms and adopt a more market-oriented approach to
banking and finance in the country, which has the world’s second-largest
economy.
“The existing configuration of financial policies fosters high savings,
structurally high levels of liquidity and a high risk of capital mis-allocation
and asset bubbles, particularly in real estate,” the report said. “The cost
of these distortions is rising over time, posing increasing macro-financial
risks.”
Jonathan Fiechter, one of the authors of the I.M.F. report, said China had
made remarkable progress over the last three decades, but that the country’s
integration into the global economy made it more urgent for its banks to operate
according to market forces.
“Take the training wheels off and let the banking system work,”
Mr. Fiechter said.
Take the training wheels off? Let the banking system work?
China’s central bank responded by saying "the suggestions regarding
the time frame and prioritization of some reform measures lack a thorough
understanding of China’s reality.”
The Chinese government’s control over the economy has become a sore point
in China’s relations with the United States and the European Union over the
last few years.
Only two weeks ago, in a report to Congress, the U.S.-China Economic and
Security Review Commission criticized China for pursuing “state capitalism”
— policies that give big state-owned companies a competitive advantage over
foreign companies doing business in China.
The Chinese Communist Party “has not expressed an interest in becoming a
bastion of free market capitalism,” the Congressional report said, noting that
state companies account for about 50 percent of China’s economic output. “It
is pursuing socialism with Chinese characteristics, which mandates a prominent
role for state ownership.”
In the I.M.F. report, China’s banking and financial system is portrayed as
huge, complex and flawed, with state bank lending favoring state companies over
private corporations and the financial system creating distortions that affect a
wide range of factors, including interest rates, property prices and the
exchange rate.
The I.M.F. said, for instance, that despite the nation’s spectacular
growth, the quality of that growth had become increasingly inefficient. It now
takes about $5 worth of investment to create $1 of gross domestic product —
about 40 percent more than it takes in Japan or South Korea, the report said.
The IMF suggested that China "give banks more control over lending and
risk management and expanding the authority of the nation’s central
bank."
Ms. Christine Lagarde, Managing Director of the IMF emphasized
the important role of Asia, and especially China, in achieving global
economic recovery.
“The rise of Asia in the global economy is really the defining economic
success story of modern times. And so today, it is no surprise that Asia is
propelling the global recovery,” she said in a speech at the International
Finance Forum in Beijing.
She noted in particular the achievements of China in growing by an average 10
percent a year and pulling half a billion people out of poverty over the past
three decades. “No wonder that when I visit this region, I feel that I am
filled with hope and optimism about the future.”
Ms. Lagarde also commented that she believed China is on the right path--as
laid out in its comprehensive 12th five-year plan, in terms of reducing domestic
vulnerabilities and reorienting the economy towards domestic consumption.
Ms. Lagarde also stressed the importance of IMF governance reforms in giving
a greater voice to emerging markets and developing countries, noting that “One
result of these governance reforms is that China is in our top three
shareholders. So China is a very important member of the IMF—which is only
fitting, given its very important role in the global economy.”
“China has once again taken the global central stage and plays a crucial
role—today and into the future,” she said.
I do believe thou does protest (and praise) to much!
Because on the horizon, it could mean another banking scam in the form of
another taxpayer bailout.
If you're not invested in the stock market, but an American multi-national corporation is invested in Greece, and could take losses on those investments if the government of Greece defaulted on their loans to banks, why should you be concerned? Will the taxpayers have to bail out another corporation so THEY don't default on loans to their banks?
Why is it always the banks that never have to worry about defaulting to anyone (to a higher power), or taking losses, or having their corporate officers making any personal sacrifices? Why does it always fall upon the masses, even if they had no part in the wicked dealings or financial shenanigans?
Why don't governments ("the people"), who owe money to private commercial banks (just a handful of old men that wear suits), tell them to kiss their collective asses, and then just nationalize the banks? Shouldn't every country's monetary system be managed by the people, instead of being manipulated by a very few -- for guaranteed profits? (See:
Banking from 2000 B.C. to the
Present).
Besides just the millions of foreclosed homes and lost jobs, haven't the American
people suffered enough already? And has one single banker suffered at
all? NO!
Did one single banker, politician or hedge fund manager lose their
home and commit suicide to escape the horrific consequences of being homeless
while trying to survive on the streets? Did any of them lose their healthcare?
Did any of them go hungry? Did any one of them ever go to jail for their crimes
against humanity? NO!
Just the opposite. If anything, they were rewarded with multi-billion-dollar
bailouts and multi-million-dollar "golden parachutes". Rather
than "take personal responsibility for their own actions", they
pointed their fingers at their victims and blamed the
jobless and the homeless for being unemployed and homeless. Some
even cruelly mocked them!
Of those who lost jobs in the U.S. during the Great Recession, but
might have been lucky enough to eventually be re-hired, they now average about HALF of what they
once earned as an annual income -- down from $43,700 to $23,000 a year -- or about what the
government defines as "poverty wages" for a family of four. As
of last year, 50%
of all American workers earned less than $27,000 a year. These are VERY
grim statistics for a once-middle-class in America.
These people ("the working poor"), and the unemployed (about
21 million who will have no income at all after January 1, 2012), are the
people that the Republicans are trying to force into even more austerity
measures. And the Republicans are trying to make it
more difficult for these same people to vote in next year's elections (voter suppression).
At the same time, we also have Republicans like Paul
Ryan waging a class war with food stamps (trying force austerity on them like
they're doing in Greece). And we also have an illegal Super
Committee
that's going to decide their fates regarding Social Security, Medicare, and
Medicaid -- leaving them hanging out to dry - forcing them into even more "austerity measures",
just like they're doing with the people in Greece.
The Republicans are forcing the once-middle-class Americans
into open revolt, just like they're doing in Greece.
From the New York Times today - First,
stop destroying jobs: "For the last three decades the government has
pursued a variety of policies that had the effect of undermining the living
standard of the middle class and redistributing income upward. As a result, the
middle class has experienced stagnant income and growing insecurity. The key to
rebuilding the middle class is reversing these polices."
Does anyone seriously think this is possible? NO! Especially if there's even ONE
REPUBLICAN in congress, while the politicians are allowing all the bankers to avoid
jail. The banks run this country, not our elected officials, and certainly not
THE PEOPLE. (The Republicans are the minions of the bankers, and the bankers are the minions of Lucifer.)
From an article that Kevin
Drum wrote for Mother Jones regarding the Greek debt crisis:
Are the Greeks crazy?
No, they're just at the end of their tether. Europe is asking them to adopt
more austerity than they're willing to bear.
Okay, but they're spending too much money. Surely they know they have
to cut back?
Sure, but the deals on offer are pretty unattractive. Europe wants to forgive
half of Greece's debt and put them on a brutal austerity plan. The problem is
that this is unrealistic. Greece would be broke even if all its debt were
forgiven, and if their economy tanks they'll be even broker.
But that's the prospect they're being offered: a little bit of debt
forgiveness and a lot of austerity.
Well, them's the breaks.
But it puts Greece into a death spiral. They can't pay their debts, so they
cut back, which hurts their economy, which makes them even broker, so they cut
back some more, rinse and repeat. There's virtually no hope that they'll recover
anytime in the near future. It's just endless pain. What they need is total debt
forgiveness and lots of aid going forward.
That doesn't sound like a very attractive option for the rest of
Europe.
No, it's not.
So maybe they should just let Greece default and wash their hands of
them.
Here's the thing, though: Greek debt is largely held by German banks that
made the loans. If Greece has been
irresponsible, so were the German banks that happily loaned out the money. So if
Greece defaults, the banks go kablooey. But they're too big to fail, which means
the German government would be forced to bail them out. And guess where the
bailout money comes from? Tax dollars.
This means that German taxpayers have a bleak choice. They can shovel lots of
money to Greece to keep them from defaulting, or they can refuse, and then
shovel lots of money into German banks to keep them from collapsing. Either way,
German taxpayers are going to foot the bill. They just haven't quite accepted
this in their gut yet, and it's hard to blame them. They're pretty badly screwed
no matter what.
Hmmm. Given that choice, they might decide they'd rather give their
money to German banks than to Greek civil servants. What happens then?
Greece defaults. And that almost certainly means that Greece exits the euro.
Why?
It's the growth thing again. If Greece defaults, nobody will loan them any
money. That means huge cutbacks, which means the economy will tank, which means
even more cutbacks, etc. The traditional way out of this spiral is a massive
devaluation of your currency. But Greece doesn't have a currency. It has the
euro.
So if they want their economy to grow again, they have to (a) default, (b)
exit the euro and readopt the drachma, and (c) devalue the drachma. This will
cause massive amounts of pain, but it will also make Greek exports super cheap,
which will eventually revive their economy.
So why not just let that happen?
It's just too catastrophic to consider. German banks, of course, would
collapse and have to be bailed out. Ditto for banks in other countries that have
lots of exposure to Greek debt. But that's not the worst of it. If Greece exits
the euro, it will become terrifyingly obvious that other weak countries might
exit too. Portugal, Spain, and Italy are the obvious candidates. Investors,
spooked at the thought of their money being stuck in a country that might exit
the euro and devalue all its bank deposits, would start huge runs on banks in
those countries. The ECB would have to intervene and provide liquidity without
limit. It would be a disaster.
So exiting the euro can't be allowed?
Right.
But if there's no exit, there's no devaluation, and Greece is pretty
much screwed forever.
Right.
So who wins?
It depends on who blinks. Exiting the euro would be no picnic for Greece. But
they could decide it's better than endless indenture and threaten exit in order
to get a better deal from the Germans. Then the Germans have to decide whether
to call their bluff.
Wow.
Exactly. Wow. Everyone knows that somebody's going to lose a huge pile of
money over this. What's really happening right now is a very high-stakes
negotiation to figure out just how the losses are going to be parceled out.
It's actually a little unclear just which country
has the biggest exposure to Greek debt. Maybe Germany, maybe France, maybe
Switzerland. See here,
here,
and here.
And the ECB owns a lot of Greek debt these days too.
But the general principle
doesn't change much. One way or another, Europe's big countries have to decide
whether to bail out Greece or whether to let them default and then bail out
their own banking systems."
Bud Meyers: Why doesn't Greece just default on their debt, screw the
banks and let them take the losses (and NOT bail them out with taxpayer money),
exit the Euro, and NOT devalue their currency? The CEOs of the banks will
never end up homeless, and this could very well prevent many Greeks from becoming
homeless.
Meanwhile, back home in the good ole U.S.A. - A
poll shows that even Republican voters think that the GOP is deliberately
trying to tank the economy, just to insure that Barack Obama is not
re-elected..."in other words, this isn't just a liberal conspiracy
theory."
But why should we care about Greece?Robert
Reich says that until we reverse the trend toward inequality, our economy
can't be revived either. "Look elsewhere around the world and you see a
similar collision unfolding. The details differ, but the larger forces are
similar. You see it in Spain, Greece, and Italy, whose citizens are being
squeezed by bankers insisting on austerity."
Why are the "commoners" always expected to do all the suffering and
sacrificing when it's the banks and the top 1% who keep screwing up and making
bad and greedy decisions that we're all forced to live with whenever they
fail.
EXAMPLE: Prior to taking over MF Global, Jon Corzine ran Goldman
Sachs & Co, and was a senator and governor of New Jersey. As CEO of MF
Global, his bets on European debt drove the futures brokerage into
a $45 billion
bankruptcy, but he says he "can't find" $1 billion in investor's money.
WTF?
Why is Goldman Sachs always connected in some way to scandal, wealth
inequality, bailouts, bankruptcies, "golden parachutes", corruption,
the U.S. Treasury, the Federal Reserve and our politicians? And it always seems
to end up with "austerity for the masses." And why hasn't anyone gone
to prison besides just one rouge trader named Bernie Madoff?
From 2009 to 2011, Jared Bernstein was the Chief
Economist and Economic Adviser to Vice President Joe Biden and a
member of President Obama’s economic team.
He
writes a blog and has made numerous appearances on MSNBC. So I
emailed him (below), thinking he might have more information
about why those who were involved with the economic melt-down were never put
in jail.
An e-mail I sent to Jared Bernstein today:
"What was Larry Summers and Robert Rubin's
involvement regarding the Gramm-Leach-Bliley Act?
I'd like to see you write a short and concise article tying this all
together...and then explaining why no one has been investigated and arrested by Eric
Holder and Company, and why no one ever went to prison.
What's the inside scoop on this? Who advised Obama to hire Larry Summers? Was
it Valerie Jarrett?
Robert Rubin, who worked for Goldman Sachs for 27 years, was the
Secretary of the Treasury during the Clinton administration -- about the
time the Gramm-Leach-Bliley Act was signed into law.(right
about the time Larry Summers transitioned into that job.)
When Rubin became the chairman of Citigroup he got the government to
guarantee $300 billion of Citigroup's toxic assets and obtained a $45
billion taxpayer bailout, then he received a $126 million golden parachute. How
did this happen?
Those toxic assets and other collateralized debt obligations and credit
default swaps were exempted from government regulation by the Commodity
Futures Modernization Act, which Rubin helped design while he was treasury
secretary (and which was turned into law when Rubin protégé Larry Summers took
over that Cabinet post.)
Why would Rubin, a banker and commodities investor, be involved with any
"reform" of the investment banks?
In 2009 President Obama tapped Larry Summers to be the director of the White
House National Economic Council. Why? On who's advice?
Larry Summers ran Mr. Obama’s daily Oval Office briefings on the economy
and sees the president more than the other economic advisers. He had guided
Obama on matters ranging from the $787 billion economic stimulus package to the
financial regulatory reform bill passed in 2010.
Again, why? And what was his connection to Hank Paulson?
Can you tell me more about the relationships between the Federal Reserve
(headed by corporate CEOs of other commercial banks) and the financial
institutions who sold the toxic credit-default-swaps?
READ THE ARTICLE: Too
Big to Jail - "Robert Rubin's destructive impact on the economy in
enabling these giant corporate banks to run amok was far greater than that of
swindler Bernard Madoff, who sits in prison with a 150-year sentence."
Don't all these connections have a very high appearance of impropriety?
Robert Rubin > Secretary of the Treasury > Goldman Sachs > bailouts
> bonuses > golden parachutes > Citigroup's exemptions > Larry
Summers > Ben Bernanke > Hank Paulson > Goldman Sachs > Secretary of
the Treasury / back to Ben Bernanke (Federal Reserve) > and our elected officials
in Congress and the White House.
(End of e-mail to Jarod Bernstein. If he every replies, or writes an
article, I'll update this post. )
This whole circle of characters stinks to high Heaven. Was it because our
elected officials were so involved, and that's why no one was ever prosecuted?
Does corruption run so deep, and among so many, within our banking system and
our system of government?
* Not that it will help much (like barking at the moon), but here's what I submitted....
Goal:
Repatriate $2 trillion in hoarded corporate profits off-shore to be taxed at the same rate as in China (25%) with no loopholes. Then
rehire laid off government workers and restore UI benefits for the unemployed to generate economic activity. Borrow from the general fund to begin work on infrastructure to be paid back with an imposition of taxes on capital gains - taxed as REGULAR INCOME.
Federal Actions:
By executive order, nationalize the Federal Reserve, repeal the Gramm-Leach-Bliley
Act, order Eric Holder to investigate, arrest, and put on trial all the banking executives involved in the banking and commodities fraud, to restore confidence in the markets and in our government.
Community Actions:
They are already doing it...it's called Occupy Wall Street (just like
they've been doing in Greece.)
* I had forgot to say, DRAFT
ELIZABETH WARREN! (Republicans don't like her because she wants
to reform the greedy banking system that created this global economic mess to
begin with.)
* And rather than have the banks foreclose on millions of homes, rendering
them vacant (and not generating any income at all) and/or selling them to
others at a depressed market value, and/or having the taxpayers pick up the tab,
thus guaranteeing the bank's investment, why not just forgive all housing
mortgages completely? After all, wasn't it the banks who destroyed the
housing market? Who says the banks have to be guaranteed profits, or that their
executives have to be guaranteed their multl-million-dollar salaries and bonuses
at the expense of THE PEOPLE? Where is it written in stone? Is that what the
Republicans mean by "certainty in the marketplace"? Certainty
for the banks but no certainty for THE PEOPLE?
* From HuffPost Hill today: Some of the biggest banks are offering foreclosure
reviews for 4.5 million people. But ProPublicafound
it's really unclear what benefits the consumers would receive.
Speaking of those big banks, many of them have a "less than zero"
percent income tax rate. Wells Fargo, for instance, collected
$681 million from taxpayers after making $49.3 billion in profits in
2008-10.
The Department of Justice thought about changing Freedom of Information
Act rules to let government agencies lie in order to deny access to public
records. U.S. Senators Mark
Udall (D-Colo.) and Chuck Grassley (R-Iowa) were pissed, as was a coalition
of advocacy groups. On Thursday, the DOJ
decided maybe that wasn't a good rule.
I'm guessing that it isn't prostitution that's the world's oldest profession,
but bartering and trading, when early man was a hunter-gatherer. Then banking might be the
second oldest profession.
We hear a lot of complaints and criticisms about the ideologies of capitalism,
socialism, communism, Marxism, fascism, and Zionism; but I believe that the real
problem for the past four thousand years has been the ideology of usuryism (as
in usury or bankingism, acquiring wealth from someone else's labor).
I've heard Fox News pundits and politicians say that the Occupy
Wall Street protesters don't know why they're protesting. Herman
Cain recently criticized them, saying, "Don't blame Wall Street.
Don't blame the big banks. If you don't have a job and you're not rich, blame
yourself." (Cain is either very naive or very deceitful, I think the
latter.)
The "occupy" protests are very similar to the anti-globalization movement
(G-8 protests)
that have been going on for years, which were critical of globalization and
corporate capitalism. The Occupy Wall Street protesters know what they're
protesting, and they know exactly who to blame...big banks and the big
multi-national corporations. Just because Herman Cain personally benefited
from corporations and banks, doesn't make them morally right.
When Herman Cain was asked to join the Kansas City Federal Reserve, he thought:
" 'Wow, the Federal Reserve wants me to serve on one of its boards!' That was something I had never really thought about, but it seemed pretty
prestigious.”
So Herman Cain (and those like him) know exactly what the protesters want
(and who benefits for advocating for the corporations and banks) and who the
protesters are blaming and why. Herman Cain says the protesters shouldn't blame
Wall Street, and should march on the White House instead.
But if Herman Cain (being a corporate CEO and a chairman of the Kansas City branch
of our central bank) knows anything about history, he should know who calls all
the shots, and it isn't the politicians, but the bankers. Our president is a
figure head, just like Ben Bernanke is a figure head for the Federal
Reserve.
Ordinary citizens have to march on the banks, not the White House. The
President can't do anything about the banks without congressional action to
nationalize our banking system. It's those
who own the Federal Reserve that are the real people in power.
And Herman Cain should know this. Anything else, any arguments, any crisis,
any finger-pointing, any scandal, any crime, any war, any natural disaster, any presidential
debate, and any criticism from people like Herman Cain, is just a welcomed
distraction from the people who really rule the world. If they want you
to look one way, I'd look the other way. (More on this below).
We know it was the banks who collapsed our economy, and how they put millions
of people in debt with bad underwater mortgages. We know how they put millions
of people out of work; now we have ask ourselves why, and would someone defend
the banks?
History of Banking
The first banks were the merchants of the ancient world that made loans to farmers and traders that carried goods between cities. The
first records of such activity dates back to around 2000 BC in Assyria and Babylonia - both Semitic kingdoms in ancient
Mesopotamia. Later, in ancient Greece and during the Roman Empire, lenders based in temples would make loans,
but also added two important innovations: accepted deposits and changing money.
In ancient Rome moneylenders would set up their stalls in the middle of enclosed courtyards called
macella on a long bench called a bancu, from which the words banco
and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest
money as merely convert the foreign currency into the only legal tender in Rome, that of the
Imperial Mint.
With the ascent of Christianity, banking became subject to additional restrictions, as the charging of interest was seen as immoral.
After the fall of Rome, banking temporarily ended in Europe and was not revived until the time of the
Crusades around 1095 (a series of religious wars, blessed by the Pope and the Catholic Church with the main goal of restoring Christian access to the holy places in and near Jerusalem.)
But most early religious systems in the ancient Middle East (the historical origin of Judaism, Christianity, and Islam) and the secular
codes arising from them, did not forbid usury. These societies regarded inanimate matter as alive, like plants, animals and people,
and capable of reproducing itself. Hence if you lent 'food money', or monetary tokens of any kind, it was legitimate to charge interest.
The Torah, and later sections of the Hebrew Bible, criticize interest-taking, but interpretations of the Biblical prohibition vary. One
common understanding is that Jews are forbidden to charge interest upon loans made to other Jews, but obliged to charge interest on
transactions with non-Jews, or Gentiles.
Israelites were forbidden to charge interest on loans made to other Israelites, but allowed to charge interest on transactions with
non-Israelites, as the latter were often amongst the Israelites for the purpose of business
anyway. But in general, it was seen as advantageous to avoid getting into debt at all,
and to avoid being bound to someone else (becoming a slave to debt).
The original "merchant banks" were first invented in the Middle Ages by Italian grain merchants. Many displaced Jews
who were fleeing Spanish persecution, were attracted to the trade. They brought with them
their ancient practices from the Middle and Far East silk routes. Originally intended for the finance of long trading journeys, these methods were applied to finance the production and trading of grain.
The Jews could not hold land in Italy, so they entered the great trading piazzas and halls of Lombardy, alongside the local traders,
and set up their benches to trade in crops. They had one great advantage over the
locals...the Christians were strictly forbidden the sin of usury, defined as lending at interest (Islam makes similar
condemnations of usury).
The Jewish newcomers, on the other hand, could lend to farmers against crops in the field, a high-risk loan at what would have been considered usurious rates by the Church; but the
Jews were not subject to the Church's dictates. In this way they could secure the grain-sale rights against the
eventual harvest. They then began to advance payment against the future delivery of grain shipped to distant ports. In both cases they
made their profit from the present discount against the future price. This two-handed trade was time-consuming and soon there arose
a class of merchants who were trading grain debt instead of actual grain.
The Jewish trader performed both financing (credit) and underwriting (insurance) functions. Financing took the form of a crop loan at
the beginning of the growing season, which allowed a farmer to develop and manufacture (through seeding, growing, weeding, and
harvesting) his annual crop. Underwriting in the form of a crop, or commodity, insurance guaranteed the delivery of the crop to its
buyer, typically a merchant wholesaler. In addition, traders performed the merchant function by making arrangements to supply the
buyer of the crop through alternative sources—grain stores or alternate markets, for instance—in the event of crop failure. He could
also keep the farmer (or other commodity producer) in business during a drought or other crop failure, through the issuance of a crop
(or commodity) insurance against the hazard of failure of his crop.
In the middle of the 13th century, groups of Italian Christians invented legal fictions to get around the ban on Christian usury; for
example, one method of effecting a loan with interest was to offer money without interest, but also require that the loan is insured
against possible loss or injury, and/or delays in repayment. The Christians effecting these legal fictions
became known as the Pope's usurers, and reduced the importance of the Jews to European
monarchs. Later, in the Middle Ages, a distinction was drawn between things which were consumable (such as food and fuel) and those which were not, with usury being
permitted on loans involving the latter.
Banca Monte dei Paschi di Siena (the oldest surviving bank in the world) was founded in 1472 by the Magistrate of the city state of
Siena, Italy, as a mount of piety. It took over Papal banking monopolies from rivals in nearby Siena and became tax collectors for the
Pope throughout Europe. The Papal bankers were the most successful of the Western world and has been operating ever since.
Today it consists of approximately 3 thousand branches, 33 thousand employees and 4.5 million customers in Italy, as well as
branches and businesses abroad. A subsidiary, MPS Finance, handles investment banking.
The oldest surviving bank in the world is in Italy.
By the later Middle Ages, Christian merchants who lent money with interest were without opposition, and the Jews lost their privileged
position as money-lenders.
The medieval Italian markets were disrupted by wars and were limited by the fractured nature of the Italian states, so the next
developments happened as banking practices spread throughout Europe during the Renaissance
Era. Banking offices were usually located near centers of trade, and in the late 17th century, the largest centers for commerce were the ports of Amsterdam, London,
and Hamburg.
The next generation of bankers arose from migrant Jewish merchants in the great wheat-growing areas of Germany and Poland. Many
of these merchants were from the same families who had been part of the development of the banking process in Italy. They also had
links with family members who had, centuries before, fled Spain for both Italy and England. As non-agricultural wealth expanded,
many families of goldsmiths (another business not prohibited to Jews) also gradually moved into banking.
Berenberg Bank is the oldest private bank in Germany, established in 1590 by Hans and Paul Berenberg in Hamburg.
In the sixteenth century, Marrano Jews (Sephardic Jews) fleeing from Iberia introduced the techniques of European capitalism, banking, and even the
mercantilist concept of state economy to the Ottoman empire. In the sixteenth century, the leading financiers in Istanbul were Greeks
and Jews. Many of the Jewish financiers were Marranos who had fled from Iberia during the period leading up to the
expulsion of Jews from Spain. Some of these families brought great fortunes with them. The most notable of the Jewish banking
families in the sixteenth century Ottoman Empire was the Marrano banking house of
Mendes, which moved to and settled in Istanbul in 1552 - and under the protection of
Sultan Suleyman the Magnificent. When Alvaro Mendes arrived in Istanbul in 1588, he is reported to
have brought with him 85,000 gold ducats. The Mendès family soon acquired a dominating position in the state finances of the
Ottoman Empire and in commerce with Europe.
The Marrano Jews thrived in Baghdad during the eighteenth and nineteenth centuries under Ottoman rule, performing critical commercial functions
such as money-lending and banking. Like the Armenians, the Jews could engage in necessary commercial activities, such as
money-lending and banking.
Court Jews were Jewish bankers or businessmen who lent money and handled the finances of some of the Christian European noble
houses, primarily in the seventeenth and eighteenth centuries. Court Jews were precursors to the modern financier or
Secretary of the Treasury. Their jobs included raising revenues by tax farming, negotiating loans, master of the mint, creating new sources for revenue,
negotiating loans, floating debentures, devising new taxes, and supplying the military. In addition, the Court Jew acted as personal
bankers for nobility, raising money to cover the noble's personal diplomacy and his extravagances.
Examples of what would be called the Court Jews emerged when local rulers used services of Jewish bankers for short-term loans.
They lent money to nobles, and in the process gained social influence. Noble patrons of court Jews employed them as financiers,
suppliers, diplomats and trade delegates. Court Jews could use their family connections, and connections between each other, to
provision their sponsors with, among other things, food, arms, ammunition and precious metals. In return for their services, court Jews
gained social privileges, including up to noble status for themselves, and could live outside the Jewish ghettos. Some nobles wanted
to keep their bankers in their own courts. And because they were under noble protection, they were exempted from rabbinical
jurisdiction. One of the most notable families engaged in this activity was the Rothschild
Family that created the a banking empire that had branches all over Europe.
Throughout 17th century, precious metals from the New World, Japan and other locales have been channeled into Europe, with
corresponding price increases. Thanks to the free coinage, the Bank of
Amsterdam, and the heightened trade and commerce, Netherlands attracted even more coin and bullion. These concepts of
"fractional-reserve banking" (which is used today) and these payment systems went on and spread to England and elsewhere.
The London Royal Exchange was established in 1565. At that time moneychangers were already called bankers, though the term
"bank" usually referred to their offices.
By the end of the 16th century and during the 17th, the traditional banking functions of accepting deposits,
money-lending, money changing, and transferring funds were combined with the issuance of bank debt that served as a substitute for gold and silver coins.
By the end of the 17th century, banking was also becoming important for the funding requirements of the relatively new and combative
European states. This would lead on to government regulations and the first Central
Banks.
The main developers of banking in London were the goldsmiths, who became depositories of gold and silver holdings. The goldsmiths
soon found themselves with money for which they had no immediate use, and they began to lend the money out at interest to both
the merchants and the government. Finding substantial profit in this business, they began to solicit deposits and pay interest on
them. The goldsmiths eventually discovered that the deposit receipts they provided were being passed on from one person to another
in lieu of payment in coin, which prompted them to begin lending paper receipts rather than coins. By promoting acceptance of the
receipts as a means of payment, the goldsmiths discovered they could lend more than the gold and silver coin they had on hand, a
practice that became known as fractional-reserve banking.
These practices created a new kind of "money" that was actually debt, that is, goldsmiths' debt rather than silver or gold coin, a
commodity that had been regulated and controlled by the monarchy. This development required the acceptance in trade of the
goldsmiths' promissory notes, payable on demand. Acceptance in turn required a general belief that coin would be available; and a
fractional reserve normally served this purpose. Acceptance also required that the holders of debt be able legally to enforce an
unconditional right to payment; it required that the notes (as well as drafts) be negotiable instruments. The concept was well
developed by the 17th century.
Meanwhile, the credit of the British Crown had been diminished in 1672. The monarchy's urgent need for funds at rates lower than
those charged by the goldsmiths led in 1694 to the establishment of the Bank of England. In 18th-century London the Bank of
England had a monopoly over corporate banking, and even large partnerships were prohibited. But private banks, though relatively
small personal enterprises, continued to find profitable business in discounting merchants' bills. In the latter half of the century small
banks in country towns grew rapidly in number and needed "correspondent" banks in London with which they could deposit and invest
funds. The London banks in turn settled accounts in Bank of England notes, and by the end of the century many kept their own
deposit accounts with the Bank of England. A structure that led to the development of the concept of a
Central Bank.
In 1690, the Massachusetts Bay Colony became the first to issue paper money
in what would become the United States, but soon others began printing their own
money as well. The first attempt at a national currency was during the American
Revolutionary War in 1775. The Continental Congress began issuing its own paper
currency, calling its bills "Continentals". In 1791, which was after
the U.S. Constitution was ratified, the government granted the First Bank of
the United States a charter to operate as the U.S. central bank until 1811.
The Second Bank of the United States was established in 1816, and lost
its authority to be the central bank of the U.S. twenty years later under
President Jackson when its charter expired. Both banks were based upon the Bank
of England. (Ultimately, a third national bank, known as the Federal
Reserve, was established in 1913 and still exists to this day.)
Jews were founders and leaders of many of the important early European banks, as well as significant banks in the
newly formed United States. Several Jewish bankers became extremely influential, successfully competing with non-Jewish banking houses in the floating of
government loans.
Mayer Amschel Rothschild (23 February 1744 – 19 September 1812) was the founder of
the Rothschild family international banking dynasty that became the most successful business family in history.
The Rothschild family (known as The House of Rothschild, or more simply as the Rothschilds) is a European family of German Jewish origin that established European banking and finance houses starting in the late 18th century. Five lines of the Austrian branch of the family have been elevated to Austrian nobility being given hereditary baronies of the Habsburg Empire by Emperor Francis II in 1816. The British branch of the family was elevated to British nobility at the request of Queen
Victoria. It has been argued that during the 19th century, the family possessed by far the largest private fortune in the world as well as by far the largest fortune in modern world history.
The Japanese government approached the London and Paris Rothschild families for funding during the Russo-Japanese War.The
Rothschild family is highly secretive: "They were Jews, and were
particularly concerned that details could be used to promote
anti-Semitism." The Rothschild family banking businesses pioneered international high finance during the
industrialization of Europe, and they were instrumental in supporting railway systems across the world and in complex government financing for projects such as the
Suez Canal. (In 2005, Forbes magazine referred to Mayer Amschel Rothschild
as a "founding father of international finance".)
Mayer Amschel Bauer (founder of the Rothschild family): "Give me control of a nation's money and I care not who makes the laws."
Lord Rothschild: "Governments do not govern, but merely control the machinery of government, being themselves controlled by the
hidden hand. The world is governed by very different personages from what is imagined by those who are not behind the scenes".
Nathan Mayer Rothschild: "I care not what puppet is placed upon the throne of England to rule the Empire on which the sun never
sets. The man who controls Britain's money supply controls the British Empire, and I control the British money supply."
The Rothschild banking family, a financial dynasty of German Jewish origin, is a dynasty without a country.
In the 19th century, the rise of trade and industry in the U.S. led to powerful new private merchant
banks. Citigroup dates back to the founding of: the City Bank of New
York (later Citibank) in 1812; Bank Handlowy in 1870; Smith
Barney in 1873, Banamex in 1884; Salomon Brothers in 1910.
In 1824 the Chemical Bank of New York was first chartered, and through
a series of takeovers and mergers, eventually culminated into the J.P. Morgan
& Co. of today. In 1892 John Pierpont Morgan arranged the merger of Edison General Electric and Thomson-Houston Electric Company to form
General Electric. In 1901 J.P. Morgan and Andrew Carnegie began
investing in steel mills together. J.P. Morgan & Co opened in 1935. Chase Manhattan Bank was formed by the merger of the Chase National Bank and the Bank of the Manhattan Company in 1955.
Chase Manhattan Bank merged with J.P. Morgan & Co. in 2000.
In 1852 Henry Wells and William Fargo founded Wells, Fargo & Co in the
gold rush port of San Francisco. In 1858, Wells Fargo
helped start the Overland Mail Company. In 1861, Wells
Fargo also took over operations of the western leg of the famed, but
short-lived, Pony Express. In 1866, Wells Fargo
combined all the major western stage lines. Stagecoaches bearing the name Wells,
Fargo & Co. rolled over 3,000 miles of territory.
PNC Financial Services traces its history to the Pittsburgh Trust
and Savings Company which was founded in Pittsburgh, Pennsylvania, in 1852. U.S.
Bank traces some of its earliest roots to 1853 when Farmers and Millers
Bank in Milwaukee first opened its doors.
Goldman Sachs was founded in 1869 by Marcus Goldman who came from an Ashkenazi
Jewish family in Germany. Goldman immigrated to New York City and hung out a
shingle on Pine Street in lower Manhattan, with the legend Marcus Goldman
& Co., setting himself up as a broker of IOUs. In 1882, Marcus Goldman
invited his son-in-law Samuel Sachs to join him in the business and changed the
firm's name to M. Goldman and Sachs. On December 4, 1928, it launched the
Goldman Sachs Trading Corp. During the 20th century the financial world began incorporating and
corporations came to dominate the banking business. Goldman's famous philosophy
was being "long-term greedy", which implied that as long as money is
made over the long term, trading losses in the short term were not to be worried
about.
The Federal Reserve and Modern Banks
The
Federal Reserve System (also known as the Federal Reserve, and
informally as the Fed) is the central banking system of the United States. It
was created on December 23, 1913. The Federal Reserve System's structure is
composed of the presidentialy appointed Board of Governors* (or Federal Reserve
Board), the Federal Open Market Committee (FOMC), twelve regional Federal
Reserve Banks located in major cities throughout the nation, numerous privately
owned U.S. member banks and various advisory councils.
* According to the Board of Governors, the Federal Reserve
is independent within government in that "its
monetary policy decisions do not have to be approved by the President or
anyone else in the executive or legislative branches of government."
(WTF?) However, its authority is "derived" from the U.S.
Congress and is "subject" to congressional
"oversight". See the
Federal Reserve Act - See Who
owns the Federal Reserve(More links below about the Fed in
2011 at the end of this article.)
"Since I entered politics, I have chiefly had men's views confided to me privately. Some of the biggest men in the United States, in the
field of commerce and manufacture, are afraid of somebody, are afraid of something. They know that there is a power somewhere so
organized, so subtle, so watchful, so interlocked, so complete, so pervasive, that they had better not speak above their breath when
they speak in condemnation of it." - Woodrow Wilson, 28th President of the United States (1913-1921).
"I am a most unhappy man. I have unwittingly ruined my country. A great industrial nation is controlled by its system of credit. Our
system of credit is concentrated. The growth of the nation, therefore, and all our activities are in the hands of a few men. We have
come to be one of the worst ruled, one of the most completely controlled and dominated Governments in the civilized world, no longer
a Government by free opinion, no longer a Government by conviction and the vote of the majority, but a Government by the opinion and
duress of a small group of dominant men." - Woodrow Wilson, 28th President of the U.S. on his death bed for passing the Federal Reserve System.
Bank of America's history dates back to 1904, when Amadeo Giannini
founded the Bank of Italy in San Francisco to cater to immigrants who
were denied service from other banks. In 1922, Giannini established Bank of
America and Italy in Italy by buying Banca dell'Italia Meridionale,
itself only established in 1918. On March 7, 1927, Giannini consolidated his Bank
of Italy with the newly formed Liberty Bank of America to form the Bank
of Italy National Trust & Savings Association. In 1928, A. P. Giannini
merged with Bank of America, Los Angeles and consolidated it with his
other bank holdings to create what would become the largest banking institution
in the country. He renamed the Bank of Italy on November 3, 1930, calling
it Bank of America.
In the U.S. during the Great Depression, after so many banks had failed, the
Securities and Exchange Commission was established in 1933 and the Glass–Steagall Act was passed which would separate investment banking and commercial banking. This was to try
and avoid the more risky investment banking activities from causing bank failures for commercial banks ever again.
FDR: "The real truth of the matter is, as you and I know, that a financial element in the larger centers has owned the Government ever
since the days of Andrew Jackson."
Morgan Stanley was founded during this time in 1935. Some of the
employees of J.P. Morgan & Co., most notably Henry S. Morgan and
Harold Stanley, left J.P. Morgan & Co. and joined some others to form Morgan
Stanley.
Joseph Kennedy: "Fifty men have run America, and that's a high figure."
Henry Ford: "It is well enough that people of the nation do not understand our banking and monetary system, for if they did, I believe
there would be a revolution before tomorrow morning."
During the post World War II period two organizations were created: the International Monetary Fund
(IMF) and the World Bank. Encouraged by these institutions, commercial banks started to lend to sovereign states in the third world. This was at the same time
as inflation started to rise in the west. The Gold Standard was eventually abandoned in 1971 and a number of the banks were caught
out and became bankrupt due to third world country debt defaults.
Modern Banking
In the 1960 the first Automated Teller Machines (ATM) were developed and the first machines started to appear by
the end of the decade; and by the 1970s the first electronic payment systems had emerged. These included debit cards, credit cards, electronic funds transfers,
direct credits, direct debits, internet banking and e-commerce payment systems.
Global banking and capital market services proliferated during the 1980s after deregulation of financial markets in a number of
countries. The 1986 'Big Bang' in London allowing banks to access capital markets in new ways, which led to significant changes to
the way banks operated and accessed capital. It also started a trend where retail banks started to acquire investment banks and
stock brokers creating universal banks that offered a wide range of banking services. The trend also spread to the
U.S. after much of the Glass–Steagall Act was repealed in the 1980s.
This saw U.S. retail banks embark on big rounds of mergers and acquisitions and also engage in
"investment banking activities". Universal banks were created and participated in many kinds of banking activities and is both a commercial bank and an investment
bank. The regulatory barrier to the combination of investment banks and commercial banks had largely been removed.
George Carlin: "You have owners - they own you - and they own all the big media companies so they control just about all the
information you get to hear. They’ve got you by the balls. They spend billions of dollars every year lobbying, lobbying to get what they
want. Well we know what they want: they want more for themselves and less for everybody else."
The consolidation was accomplished through acquisitions which grow in size over this period, and there were many of them. By the
end of 2000, a record level of financial services transactions with a market value of $10.5 trillion occurred, and the top ten banks
commanded a market share of more than 80%.
The Last Banking Crisis
The 2008 financial crisis caused significant stress on banks around the world. The failure of a large number of major banks resulted in
government bail-outs. The collapse and fire sale of Bear Stearns to JP Morgan Chase in March 2008 and the collapse of
Lehman Brothers in September that same year led to a credit crunch and global banking crises.
In response, governments around the world bailed-out, nationalized, or arranged
"fire sales" for a large number of major banks. These events spawned the term
"too big to fail"...and today, they still are.
The banks that got the most government help in late 2008 and early 2009 also
invested the most to influence members of Congress, the White House, the Federal
Reserve, Treasury Department and a long list of federal agencies as new rules
were enacted governing Wall Street.
JPMorgan Chase & Co., Citigroup Inc., and Goldman Sachs Group Inc. declined to comment on their lobbying spending, which went toward hiring advocates to discuss the legislation with lawmakers and regulators. Bank of America
Corp., Wells Fargo & Co., PNC Bank, US Bancorp, Capital One Financial Corp., Regions Financial Corp., and the American Bankers Association all lobbied
heavily.
On April 14, 2011, the United States Senate’s Permanent Subcommittee on
Investigations released a 635-page report that alleged that Goldman Sachs
may have misled investors and profited from the collapse of the mortgage market
at the expense of its clients. Senator Carl Levin (D-Michigan), Chairman of the
Subcommittee, said he would refer the report to the Department of Justice for
further investigation.
On June 2, 2011, following an "exploratory" meeting with the
Manhattan district attorney, Goldman was subpoenaed for relevant information. Goldman
is expected to accept a deferred-prosecution agreement if charges are
filed. A deferred-prosecution is when a prosecutor agrees to grant
amnesty in exchange for something. (A bribe maybe?)
Conclusion
Some strong words in the video below from Elizabeth Warren about why Wall Street is to blame.
The PBS documentary from Bill Still called the "The Money
Masters" is maybe the best documentary ever made on the subject of the
history of banking. The
U.S. Federal Reserve is a privately owned bank, and it's name is a complete deception to trick the American citizens and to enslave
them - just as England did since the founding of the Bank of England. The Rothschild family banking dynasty is probably the most
major player - they almost own the Federal Reserve and the Bank of England. Yet, the Rothschild's try to stay out of the public light
and work through their many henchman (i.e. the politicians and media contacts.)
The bottom line is...the banks weren't "failing" at all. Taxpayers
in the United States (and around the world) were forced to pay quick profits to
all the banks. All the bank's losses were incurred by taxpayers. Society, as we
know it, could completely break down, and total anarchy could prevail throughout
the entire world, but the bankers would have the least to fear for their very
survival. They have always survived through the centuries of their financed
wars, disease, and man-made famines. It was only the masses that perished.
Today we have Herman Cain running for President of the United States of America,
and what does he want? Besides being in a "prestigious" position, he
also wants more of the same.
Now we have a movement called Occupy Wall Street...and the rest, as they say, is history.
(Rankings and market caps fluctuate and
vary with
asset values, market caps, and stock prices.)
BNP Paribas is the largest bank of the world with assets of $2.846 Trillion. The bank has headquarters in Paris, France with second global headquarters in
London. (Founded early 1820s)
The second largest bank of the world with $2.715 Trillion of assets is Deutsche
Bank (est.1870).
The bank has headquarters in Frankfurt, Germany.
The Mitsubishi UFJ Financial Group is the third largest bank of the world with assets of $2.481
Trillion (est.1880).
It is one of the main companies of Mitsubishi Group and has headquarters in Tokyo, Japan.
With the total assets of $2.465 Trillion, French based Credit Agricole is the fourth largest bank of the world.
(est.1861)
Credit Agricole has headquarters in Paris, France.
The fifth largest bank of the world with $2.454 Trillion of assets is HSBC
Holdings, located in London, United Kingdom. The origins of the
bank lie in Hong Kong and Shanghai, where branches were first opened
in 1865
Barclays is the sixth largest bank of the world with total assets of $2.388 Trillion.
This bank traces its origins back to 1690
when John Freame and Thomas Gould started trading as goldsmith bankers
in Lombard Street, London. The bank’s headquarter One Churchill Palace is located in
London, United Kingdom.
The seventh largest bank of the world is one of the oldest banks of the
world (1727), Royal Bank of Scotland with the assets of $2.328 Trillion. The bank has headquarters in Edinburgh,
Scotland.
Bank of America has $2.264 Trillion of assets which makes it the eighth largest bank of the world. HQ Charlotte North Carolina.
With assets of $2.118 Trillion, JPMorgan Chase & Co. is the ninth largest bank of the world. HQ New York City.
The New York City based Citigroup is tenth largest bank of the world with assets of $1.913 Trillion.
* PROPOSAL: The financial system can't just be "reformed", the
entire banking system of the United States would have to be totally restructured
and nationalized, using the Armed Services for enforcement if necessary. It
would be a government bank (like a community bank) owned by the people. Two
elected boards would be put in place, one for domestic banking and one for
international finance and investment. There would only be one central bank, with
thousands of branch offices throughout the country, with one set rate of
interest for borrowing for each category: with all interest earned from
personal, auto, and home loans being paid into the U.S. Treasury, instead to
privately-held commercial banks. The money supply would no longer be hoarded by
the top 1%, but would be circulated and redistributed among the 99%. All
military and law enforcement agencies would be working for the people, not for
the banks. The 1% would be put in prison if they resist, or they can work for
the government (us). Details later.
And then there is the Pope: "The Papal bankers were the most successful of the Western world and has been operating ever since."
Report shows Federal Reserve boards filled with business and financial
executives. The law requires that workers and consumers be represented.
(By Nicolas Mendoza | 10.21.11)
With Republicans in Congress unwilling to pass President Obama’s jobs bill,
many believe that the Federal Reserve is the only institution left that can lift
the economy out of its seemingly perpetual slump.
That has led to the normally quite secretive Federal Reserve, the nation’s
most important economic institution, coming under increased scrutiny. This in
turn means that the question of who leads the Fed is growing more important.
A new report has revealed that an overwhelming majority of the Fed’s
leadership is made up of executives from banks and private corporations,
confirming previous American Independent reporting. The
report, from the Government Accountability Office (GAO),looked at the
membership of the boards of directors of the 12 regional Federal Reserve banks.
Using a voluntary survey of the currently serving directors, the GAO found
that over three-quarters of the regional Federal Reserve directors are the
president or CEO of the company they work for. Of the directors that have served
from 2006 through 2010, only six represented labor and five represented
consumers, while 56 represented commerce or industry interests, and 73
represented banking interests.
The report recommends extending director recruitment efforts beyond the
senior executive level: “To the extent that director searches are limited to
chief-level executives, the Reserve Banks not only limit the diversity of the
pool of potential candidates but also risk limiting the perspectives shared
about the economy in the formation of monetary policy.”
Federal Reserve Chair Ben Bernanke said in an official response to the report
that the Fed has “has already broadened the pool of candidates for these
positions to consider qualified candidates who are not chief executives.”
Sen. Bernie Sanders (I-Vt.), who requested the report as part of the
Dodd-Frank financial regulatory reform law, called the financial sector’s
influence over Fed leadership “unacceptable.”
“Not only do they run the banks,” said Sanders in a statement, “They
run the institutions that regulate the banks.”
“Recruiting consumer and labor representatives is a challenge”
The Federal Reserve System is comprised of the central bank in Washington,
D.C. and 12 regional Federal Reserve banks. These are charged with carrying out
policy dictated by the Federal Reserve guiding committee, the Federal Open
Market Committee (FOMC), which in turn is required by Congress to craft policy
keeping unemployment low and prices stable. The presidents of the regional Feds,
which are selected by the boards of directors, also rotate through five of the
twelve voting seats on the FOMC.
Each board consists of nine members: six members are selected by the member
banks of the Federal Reserve, and three are selected by the national Federal
Reserve Board in Washington. “Class A” members of the regional Fed boards
are selected by banks that participate in the Federal Reserve to represent their
interests, and are usually commercial bank officials.
The Federal Reserve Act requires that the other 6 directors of each board, 3
“Class B” members appointed by the member banks and 3 Class C members
appointed by the national Board, “represent the public” and be “elected
with due but not exclusive consideration to the interests of agriculture,
commerce, industry, services, labor, and consumers.”
But Fed officials told the GAO that “they generally focus their search on
senior executives… usually CEOs or presidents.” Officials also told the
GAO that “having senior executives on the board of directors helps elevate the
stature of the board” and that senior executives “may have a broader view of
how their industry is being affected by the economy.”
Despite the fact that Class B and Class C directors aren’t allowed to have
ties to the banking industry while serving on the board, the GAO report found
that “at least 56 percent [of the surveyed directors] have had some financial
industry experience.”
The GAO cited a 2010 memo from the Federal Reserve Board that said recruiting
representatives of organized labor and consumers to serve on the regional Fed
boards was a “high priority.” But two Fed officials told the GAO that
“recruiting consumer and labor representatives is a challenge because many of
them are politically active,” and the Board’s policy restricts a
director’s political activity.
It’s unclear how the national Board defines “political activity”.
TAI’s previous reporting has shown many of the directors have donated
generously to political campaigns. And the political activities of at least
one director, JPMorgan CEO Jamie
Dimon, are regularly the target of speculation by the national media, given
his close relationship with the Obama administration and his recent meetings
with Republican candidate former Massachusetts Gov. Mitt Romney.
Using data from the Equal Opportunity Employment Commission, the GAO compared
the demographics of the Fed board directors with the demographics of
“executive and senior level officials and managers” of firms with more than
100 employees, and found that they were quite similar.
Women and racial minorities are extremely underrepresented on the boards: In
2010, 15 of the 108 directors were minorities, and 18 were women. Despite
officials telling the GAO that “Class B and Class C directors are a source of
demographic diversity on Reserve Bank boards,” only 32 of the 202 Class B and
C directors since 2006 have been women, and 23 have been minorities.
The education level of the directors is also unrepresentative: An
“overwhelmingly majority” of the directors have a bachelors’ degree, and
at least 55 percent have some type of advanced degree.
The GAO found that the selection process relies heavily on personal
networking, with many directors selected after a personal recommendation from a
current or previously serving director. 86 out of the 91 surveyed directors in
2010 serve on some other board of a for-profit or non-profit company.
One official told the GAO that “they look for candidates in a variety of
industry lists such as a Forbes’ magazine list of the most powerful women in
business,” while other directors have pursued the job by reaching out to the
Fed staff themselves.
“The appearance of conflict of interest”
Fed watchers have noted that regional Fed presidents, selected by the boards
of directors, tend to have the most conservative voting records on the FOMC when
considering whether to use extraordinary measures to reduce unemployment.
Reuters recently rated
FOMC members and Fed presidents on their aversion to further stimulating the
economy, and found that the most hawkish or anti-stimulus members of the
Committee were all regional Fed presidents.
The importance of diversity in the country’s most important economic
institution can be seen in the unemployment statistics: While the unemployment
rate for people with at least a bachelor’s degree was 4.2 percent in
September, for those with only a high school diploma it was 9.7 percent. For
whites, the unemployment rate is 8 percent, but for Hispanics it’s 11.3
percent and for African-Americans it’s 16 percent.
Rep. Barney Frank (D-Mass.), the Ranking Member of the U.S. House Financial
Services Committee, has proposed eliminating
the voting power of the regional presidents. Frank says that all of the
voting members of the FOMC should be directly appointed by the president and
confirmed by Congress, rather than selected by boards made up of business
leaders.
The GAO appears to agree, at least in part, with Frank: “The statutory
requirement for three classes of directors was intended to provide
representation of both stockholding banks and the public… However, the
existence of Class A and to a lesser extent Class B directors on the boards
creates an appearance of a conflict of interest,particularly in matters
involving supervision and regulation.”
This became especially apparent during the recent financial crisis, when the
Fed created multiple emergency programs that provided direct financial support
to the country’s largest banks.
The report found no instance of a director being directly involved with the
supervision of a program that benefited his or her banking institution.
Nevertheless, the GAO recommended that any waivers granted to directors in the
event of a conflict of interest be made public.
In the real-life game of "Monopoly", the banks have won. According to the official Monopoly®
game rules, the object of the game is to become the wealthiest player through
the buying, renting and selling of property. The first player to go bankrupt retires from play. (That happened a long time ago.)
When the second bankruptcy occurs, the game ends. Play immediately ceases, the
game is over, with the bankrupt players turning over to there
creditor all that they have of value, including buildings and any other properties. This happens whether the creditor is a rival player or
The Bank.
I think this has happened already. 10 CEOs, 10 board-of-directors, 10 corporations
own 77% of our collective asses...their tentacles are inside every nook and
cranny of our lives.
In 2002, the top ten banks controlled 55% of all U.S. banking assets. Now in 2011
ten Banks own 77% of all banking
assets*. The “big six” U.S. banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) now possess
assets equivalent to approximately 60% of America’s gross national product.
* What a bank owns, including loans, reserves, investment securities, and
physical assets. The largest asset category of most bank is loans, which
generates interest revenue. A critical asset category used to maintain the
safety of deposits is reserves (vault cash and Federal Reserve deposits).
Sadly, smaller banks continue to fail in large numbers and the big banks just keep growing and getting more power.
What makes things even worse is that these big banks often pay next to nothing in
taxes. For example, between 2008 and 2010, Wells Fargo made a total profit of 49.37 billion dollars. Over that same time period, their tax bill was negative 681 million
dollars. Wells Fargo actually got 681 million dollars back from the U.S. government.
It's no wonder the we're "occupying" Wall Street (and now the
world) because the bankers are so disconnected from the average American...and they fail to see
(or care about) our struggles and suffering.
A recent study shows that over 70% of Americans derive their monthly income from an actual W-2 job while
42% of America's
financial wealth is controlled by the top 1 percent. If we break the data down further we will find that 93% of all financial wealth is
controlled by the top 10% of the country.
We ended up bailing out the worst performing and troubled companies, thus keeping alive companies that should have completely
failed. Did we bail out Google? Or Proctor and Gamble? Of course not. These companies actually produce something that people
want...not the banks.
The bottom 90% of the population have been saddled like slaves with 73% of all debt, but of investment assets, the bottom 90% of Americans
only owned 12.2%. We would need to go back to the Great Depression to see such lopsided data.
We now have 21 million unemployed
Americans and 30
million Americans that are under-employed, struggling with part-time and
low-paying jobs to earn a living wage to support themselves and their
families.
Last year in 2010, about 48
million people, ages 18 to 64, did not work even one week out of the
year.. We also have 46
million Americans who need food stamps just to eat, and Medicaid for
healthcare. And 50
million Americans are still living without any healthcare insurance at
all.
We have 46
million Americans living below the ridiculously low "official"
poverty line. This is the highest number in 52 years. The government
defines poverty as a
single person earning below $10,890 a year (that's $907 a month for rent,
heat, clothing, medical, and food) or a family of 4 trying to survive on
$22,350 a year.
Imagine how the elderly struggle on a fixed Social Security incomes (who've
had no
cost-of-living increases for 3 years) must feel - - - because the government doesn't
include housing, energy, and food in the cost-of-living inflation index. The
very three basic necessities that people actually need to "live"
And
congress is harping about cuts to Social Security and Medicare
too. Meanwhile Bank of America is again reporting
meg-profits this quarter, but yet is still charging their customers $5 a
month to use their ATM card.
Bank Run > Under fractional-reserve banking, the type of banking currently used in developed countries, banks retain only a fraction of their
demand deposits as cash. The remainder is invested in securities and loans, whose terms are typically longer than the demand
deposits, resulting in an asset liability mismatch. No bank has enough reserves on hand to cope with all deposits being taken out at
once.
If many depositors withdraw all at once, the bank itself (as opposed to individual investors) may run short of liquidity, and depositors
will rush to withdraw their money, forcing the bank to liquidate many of its assets at a loss, and eventually to fail.
A bank can temporarily suspend withdrawals to stop a run; this is called suspension of convertibility. In many cases the threat of
suspension prevents the run, which means the threat need not be carried out.
Banking panics began in October 1930, one year after the stock market crash. Much of the Depression's economic damage was
caused directly by bank runs, and institutions that were put into place after the Depression have prevented runs on U.S. commercial
banks since the 1930s, even under conditions such as the U.S. savings and loan crisis of the 1980s and 1990s.
The global financial crisis that began in 2007 was centered around market-liquidity failures that were comparable to a bank run. The
crisis contained a wave of bank nationalizations, including those associated with Northern Rock of the UK and IndyMac of the U.S.
This crisis was caused by low real interest rates stimulating an asset price bubble fueled by new financial products that were not
stress tested and that failed in the downturn.
IndyMac Bank's parent corporation was IndyMac Bancorp. IndyMac Bank was founded as Countrywide Mortgage Investment in 1985
as a means of collateralizing Countrywide Financial loans too big to be sold to Freddie Mac and Fannie Mae. In 1997, Countrywide
spun off IndyMac as an independent company run by Mike Perry, who remained its CEO until the downfall of the bank in July of 2008.
With $32 billion in assets, IndyMac Bank is one of the largest bank failures in American history. The F.B.I. accurately described what
happened as early as 2004 as "an epidemic of mortgage fraud.”
Charles Keating Jr. was most known for his role in the savings and loan scandal. In the 1980s, Keating ran American Continental
Corporation and the Lincoln Savings and Loan Association, and took advantage of loosened restrictions on banking investments. His
enterprises began to suffer financial problems and were investigated by federal regulators. His association with, and financial
contributions to, five U.S. senators to argue for preferential treatment from the regulators led to them being dubbed the Keating Five. In
the early 1990s, Keating was convicted in both federal and state courts of many counts of fraud, racketeering, and conspiracy. He
served four and a half years in prison before those convictions were overturned in 1996. In 1999, he pleaded
guilty to a more limited set of wire fraud and bankruptcy fraud counts, and was sentenced to the time he had already served.
Disclaimer:I believe in democracy and capitalism, but our system
of government and our economy is flawed, and needs some serious tweaking, so that it
might work more fairly for the other 99%.
UPDATE to the UPDATE - Again, all my videos from 2021 were also deleted by another account I started at the same company in late December 2020, this time because I used the phrase "election fraud" in my video descriptions of a congressional hearing with the FBI director Chris Wray from March 2, 2021. All that hard work, gone, with the click of a mouse. "Do no evil". UPDATE All my videos prior to 2020 in this blog were deleted by Youtube because of a copyright claim by Herring Networks Inc — Robert and Charles Herring, owner of One America News Network.
In 2016 I transitioned from Bernie Sanders (who was running as a Democrat) to Donald Trump (who ran as a Republican), so many of my previous posts will contradict my opinions now. I've evolved as I've enlightened myself. I'm anti-Marxist and pro-America First.
In 2016 I transitioned from Bernie Sanders (who was running as a Democrat) to Donald Trump (who ran as a Republican), so many of my previous posts will contradict my opinions now. I've evolved as I've enlightened myself. I'm anti-Marxist and pro-America First.
