Because America does matter, too big to fail, and too big to prosecute. Banking system as a criminal enterprise, Glass- Steagall Act, Gramm-Leach-Bliley Act, AIG, Latin America Debt Crisis, Asian Tigers Collapse, Welcome to Wall Street.
Usury, the “practice of making unethical or immoral monetary loans” forbidden by all major faiths including Judaism, Islam, Christianity and Buddhism, condemned by prophets and philosophers like Moses, Jesus, Mohamed, Plato, Aristotle, Cato, Cicero and Aquinas, with Cato concluding “ and what do you think of usury- what you think of murder”.
However a series of legislation and Supreme Court ruling such as “Marquette Nat. Bank of Minneapolis V. First Omaha Service Corp” of 1978 overrode all state usury laws coupled with 1980 Congressional Act “ Depository Institution Deregulation and Monetary Control Act “ exempted installment plans from state control, adding insults to injury the Supreme Court overrode in the 1996 case of “Smiley V. Citibank” state powers to regulate credit cards fees and extending the reach of Marquette decision and held that the word “interest” used in the 1963 banking laws include fees which states could not regulate. There is an absolute collusion between the financial/banking industry, Congress and the Supreme Court.
With that in mind, do not wonder why your credit cards have high rates and certain fees allowing credit cards companies to charge 25% to 35% interest rate as fees, and without warning to consumer, allow credit cards companies to increase credit card rates to card holder after only one default or late payments. It allows all other credit cards companies to increase their respective rates even though a consumer was late on one credit card but not others.
Perhaps one of the biggest crimes committed by the administration, Federal government and the Feds is the bailing out of the banking system and financial institutions using tax dollars to save these so called “ too big to fail” from bankruptcy. There was no “compelling citizenship case” to save these banks and financial institutions while exempting their criminal management from prosecution, perhaps because “ if they are too big to fail, they are too big to prosecute. The American banking and financial system is nothing but a criminal enterprise and should be subject to RICO ( Racketeer Influenced and Corrupt Organization Act).
Our government does not step in and bail out a small Ohio factory because it fell behind on its bank loans due to “illegal dumping “ of steel from China or India, and it does not bail out a small manufacturing company when through fraud it made misleading representations and for sure the chief executive will see jail time. Yet our government did precisely the opposite bailing out Wall Street banks when in fact these banks did not fail because of “market conditions” but failed because management engaged in criminal activities and fraud selling “financial instruments” that were worthless and they knew it.
Imagine if the more than $ 800 Billions used to bail out banks because of systematic fraud, lies, greed went into and capitalize a series of national regional banks like cooperative banks in Sweden (JAK Members Bank) owned by the citizens, in cooperative form, it would have saved millions of homes from foreclosure, saved tens of millions of jobs. Yet our tax dollars went into bailing out these financial institutions that are nothing more than a racketeering criminal enterprises.
Just think of the different ways we could have solved the housing crises, the unemployment that ensued, the pensions lost. Instead, tax dollars, your’s and mine went to save these too big to fail managed by professional crooks.
The American financial system collapsed and failed not because of market conditions, or economic cycles, it failed because there was reckless and criminal management system in place covered and immune from prosecution by absence of airtight statutes and regulations. A small altercation with a policeman over traffic ticket can end you in jail for 15 years, yet, these banking managers can lie their way into hundreds of billions and continue to have the respect from their partners in Washington. None of the top banking and executive officers and board members went to jail for the $800 Billions bust.
AIG alone costs the taxpayers over $182 Billions to bail out and for what? Because the management was issuing policies it knew it could not cover in event of actual call, it booked profits on books before they are realized few years later, dispensed large multimillion bonuses to executive for booking deals years before income and profits are realized, and yet, we the citizens are called on to bail out these damn incompetent multimillion dollars crooks.
Economic booms and bust simply do not happen out of the blue so economic cycles are not natural conditions. There is no such thing as of “free market economies” it is a lie and big lie at that. Free market economy is when the rich fleece the poor.
In the same way God and nature regulates atmospheric phenomena such as hurricanes, tornadoes, floods, man mainly economists, government regulators and bankers manipulate the economies and shape market conditions, determining the supply of money (money central banks print and circulate), determine interests rate, determines rate of inflation, determine economic growth, unemployment etc.
American banks in colluding with the Feds are notorious for the ills, the misery, and the harms they have been inflecting on this nation and around the world. The Latin America financial crisis was made in America, with hundreds of millions of people in Argentina, Brazil, Chile among other nations lost their jobs, their homes, their savings, and hundreds if not thousands of factories closed as a result of financial and banking policies and decisions cooked on Wall Streets, supported by the Feds, the White House, blessed and legitimized by the World Bank and the IMF.
In Latin America in what is termed as the Lost Decades (1970-1980), American banks such as Citibank, Chemical Bank, Chase Manhattan awash with tens of billions of excess petro-dollars went on a lending spree lending tens of billions of dollars to Latin American countries for questionable “industrialization projects “ White Elephants” and infrastructures with Latin American debt to commercial banks soared at an accumulative rate of 20% going from $75 Billions in 1975 to $315 Billions in 1983 reaching almost 50% of the total GDP.
With such heavy debt add this to bureaucratic failings, corruptions, the economies stalled, business and factories closed, unemployment soared, real wages dropped almost 40% and inflation soared, with numbers over 211 millions classified as poor in 1980. This kind of economic planning (not free economy) was highly encouraged by both the World Bank and the IMF.
If we look at the source of not so intelligent economies we find financial planners, economists, ministers, central bankers are alumnus of US business schools such as Chicago, Harvard and Stanford or alumnus of Goldman Sachs in counties such as Argentina, Brazil, Chile and Mexico facing bankruptcy, and more recently Spain, Portugal and Greece.
The American administrations desperate to save Wall Streets from financial bankruptcy ordered both World Bank and IMF to step in and provide the necessary bridge loans to help float the economies in Argentina, Brazil, Mexico and Chile adding more debts to struggling economies.
With countries heavily indebted these not so smart guys pushed for free markets, privatizations, deregulation, and free trade all of which contributed to the collapse of their nation economies and the misery they created. Such reckless policies rendered government with no effective control over their own economies and Latin America fell into recessions, devaluations and collapsed currencies, and in countries like Brazil, inflation peaked at 5,000% per year. It took Latin America decades to recover from criminal racketeering of Wall Street.
Decade later, American bankers and financial gamblers turned their attention to the emerging economies of South East Asia or (Tiger economies) countries like Korea, Malaysia, Singapore, Thailand, and the Philippines. The financial crisis of South East Asia is yet another crisis made in America.
While most countries had sound fiscal policies, high interest rates attracted those seeking high return on investments. Tens of billions were injected in short term notices, stocks and currency, with foreign debts soaring to almost 100% of the GDP in some countries.
Large inflow of money, fetching high rate of return could not last too long. At the first sound of cracks, large investors mainly US hedge funds sought to cash in and get out and with that there was a run on banks, local currencies almost collapsed and economies were left in ruins. This was no accident since the American Feds in the US decided to raise the interest rates and hedge funds and money managers simply shifted the tens of billions they had in South East Asian market diverting it into the US. All of a sudden these countries found themselves in deep trouble with failing economies and recessions that took years to recover.
But this is not the whole story. We have to go back and return to our basic premise that banks and bankers are natural crooks and gangsters.
Consider this. JPMorgan settled for $ 700 millions the so called “ London Whale” scandal when the bank lost $6 Billions in fraudulent trade, The chief executive officer paid the fine but never was criminally charged at least with reckless disregard of investors money.
In France, a loan trader caused Societe Generale a loss of $4.9 billions with top executives forced to resign but not going to jail. Nicholas Leeson a trader at Baring Bank in Singapore caused the loss of $ 1. 3 billions in speculative trading and yet none of the top brass going to jail. Those who suppose to supervise him and manage the investor’s funds.
Credit Swiss was charged with alleged inflating of US sub-prime mortgage bonds was ordered to pay $2.65 billions but no jail times. One would think that such acts are criminal acts calling for jail times.
In England, Barclay Bank was charged with rigging the inter-bank Libor causing tens of billions of extra charges to consumers, the chief executive Bob Diamond was forced to resign laughing all the way the bank collecting a severance package of $30-40 millions.
Because banks are run by crooks and gangsters they paid since the financial crisis over $103 Billions ($ 103,000,000,000) in legal fees defending themselves against civil and criminal charges yet, we did not see big time investments bankers going to jail. True, insider trading does take executive to jail, but not criminal reckless management.
Of course banks pay the fines, since it is not their money but investors and shareholder and no one cared least the department of justice. The banks facing charges such as” misleading buyers, rigged interest rates used to price loans world wide, manipulating markets for credit derivatives and commodities” crimes that will see average citizens going to jail for life, yet, non of the top guys are on their way to jail. I guess in America there are laws for the rich and laws for the poor.
While we the tax payers got stuck holding the bag with millions of homes in foreclosures and millions having lost their homes and jobs, both CitiGroup and Wells Fargo between June 2008 and June 2012 paid over $98.6 Billions in dividends for common and preferred stocks. Not bad for banks that were saved by tax dollars. While we saved the banks, the banks did not save us from bankruptcy, loss of homes and loss of jobs.
I leave you with this to ponder and wonder what is wrong with our financial system? A so called bank in Florida borrows money from the Feds at almost ( ZERO) % yet turn around and lend it through its network of payday loans at 30% even 50%. And why our central bank is the only one in the world owned and managed by members bank and not the people or the state? Time to bring this mafia under control and time to recall Congress.
Sami, a Palestinian-American and a US Army Veteran (66-68), recipient of the “soldier of the month award and leadership award from the 6th Army NCO Academy, is an international legal and business consultant with over 40 years of international experience, in construction, hospitality services, conservation, and defense, in the Middle East, Europe, and North Africa. Sami is a holder of BA, MPA in Public and Environmental Affairs, Jurist Doctor from Indiana University. While at IU he was elected class president, student government president and chairman of the Indiana Students Association,
Active in peace movement as a co-author of the pre-amble for the One State for All of its people and voluntary service program SalamNation. A frequent contributor on national and international affairs. He resides in the United States.