Friday, July 31, 2009

U.S. Banks and their DISCONNECT with US

Do you have any kind of business with Bank of America, Citigroup, Merrill Lynch, Goldman Sachs, JP Morgan-Chase, Wells Fargo or any other national banking institution? Do you have, checking/savings accounts, investments, loans or credit cards with these banks? Well, the great majority of US do.

In the Fall of 2008, in the midst of the global economic crash, U.S. Government (virtually no-strings attached) 'TARP' funds bailed these banks out of their so-called financial doldrums. Here is what these banks did with some of that money:

On July 30, 2009, New York State Attorney General Andrew Cuomo released his well studied report on the nations banking institutions. The highlights:

Combined, Merrill Lynch and Citigroup lost 54 billion dollars last year, yet they were among nine major banks that together doled out more than 32 billion dollars in bonuses to their highest paid employees, even as they received 175 billion dollars of taxpayer 'TARP' money. Nearly 5,000 people received bonuses of $1 million or more. The Attorney General's report states: "When the banks did well, their employees were well paid. And when the banks did poorly, their employees were paid well. And when the banks did very poorly, they were bailed out by the taxpayers and their employees were still paid well."

Cuomo's report goes on to say that Citigroup and Merrill Lynch each paid out nearly $9 billion in employee bonuses despite huge losses. Citigroup, now one-third owned by OUR government as a result of it's $45 billion bailout, gave 738 of it's employees bonuses of at least $1 million each for 2008. Bank of America also received $45 billion in federal aid and paid $3.3 billion in bonuses, with 172 employees each receiving at least $1 million.

The Goldman Sachs Group has the highest average annual pay at $160,000. per employee and the top 200 earners took home almost $1 billion collectively. The top 14 people received more than $143 million, and 212 employees received $3 million each or more.

Had enough? Not yet?

JP Morgan Chase gave 1626 employees at least $1 million and paid more than 200 employees in excess of $3 million, each. And there's a lot more to come.

The temerity of these banking moguls is only exceeded by their greed. And the U.S. tax payers paid for it. The DISCONNECT between our banking system and the people is complete.

What can we do about it? One answer is to regulate the banking system. REGULATE the banking system! Certain moves in Washington are being made to do that as I write.......Firm, clear and ENFORCED LAW is needed right now. Contact your federal legislators to this end. And then contact them again and again until there are some assurances that this outrage does not happen again. Regulate Wall Street executive salaries and bonuses when any public money is involved. And, still don't trust the U.S. banking system ever again, else it's greed will do it again.

There is a long history behind how the banking system got to the present state. Little will be said here about that history. But suffice to say certain, effective regulations that were in place from the 1930's worked until those regulations were dismantled through banking lobbyists and by bought and paid for politicians. From 1994 through 1999, these regulations were chopped away to the place where the so-called 'free market' became the 'rip-off' market we now experience.

Beware of those politicians who say 'government has no place in the free market, the market will take care of itself'. Well, the market certainly did take care of itself when it came to salaries and bonuses (Senator DeMint). And the 'free market' money just became 'free' money. OURS! Also beware of those economic, money managers and pundits writing and telling us similar things, only they denigrate government ability to 'manage' a free market system through regulation (Bob Brinker and the ideologue star ship money talk). Even after the cold hard facts are in, some people continue to argue for a status quo banking system.

Some statistical parts of this article were extracted from Press Democrat News Services.

John

No comments:

Post a Comment