The old saying goes that the definition of insanity is “doing the same thing again and again expecting different results.” There is talk now of more money needed to keep the big banks afloat. It has become apparent that Bank of America “needs” billions of dollars more (roughly $34 billion, with a B). If it didn’t work the first time, why should it now?
As we shake our heads in disbelief from that news, I should also mention the updated regarding the audacious bonuses that insurance giant AIG paid out after the government bailouts. Turns out AIG’s estimates of the bonuses paid were off by a little – by a factor of FOUR!!!
The total number is believe the be around $450 million in bonuses, given (for incredibly poor behavior) as “retention bonuses.” Seems to me their employees are not going to find jobs elsewhere, so a retention bonus is superfluous at best and deceptive at worst. That is nearly half a billion in taxpayer money given to greedy CEOs already worth more than the average American will make in their lifetime.
We already own AIG, now the news of the other big banks need more just creates yet another situation where the American taxpayers will own the largest amount of the companies. We’ve already paid out $45 billion to the bloated Bank of America, why not another $34? (BoA isn’t the only bank, either, as the nation’s “stress test” reported)
American politicians are afraid of nationalizing banks because it will cause political hurdles; yet that is essentially what we’re doing here. The only difference is the bailouts are considered “non-voting” stock – or essentially a big free check, ownership without decision rights. Nationalization of our banks is a much cleaner, simpler solution that will create a more stable, sustainable banking system and return the sovereignty of our monetary system to the people.
We can continue to bailout with billions of dollars of taxpayer money, but it is no better than using a bucket on a barn fire. This ship is going down, the system is broken. I will say in until I’m blue in the face, a steady state economy is the only sustainable solution. David Korten said it well in a recent article in Yes! Magazine:
“That amounts to trying to revive an economic system that has failed in every dimension: financial, social, and environmental. Rather than prop up a failed system, we should use the current financial crisis as the opportunity to create a system that works. Trying to solve the crisis with the same tools that caused it is the definition of insanity…
Money is merely an accounting chit with no intrinsic value—it is useless until we exchange it for something of real value. Wall Street’s specialty is creating money for rich people without the exertion of producing anything of corresponding real value. They increase their claims against real wealth without increasing the supply of goods, making it harder for the rest of us to meet our needs.
We have been in thrall to a pervasive cultural story, continuously reinforced by academics, government officials, and corporate media, which led us to believe our economy was functioning splendidly even when it was quite literally killing us…
The logical conclusion from this story is that the faster we convert useful resources to toxic garbage, the richer we are. The only true beneficiaries of this obviously stupid idea are a few very rich people who reap financial gains from every economic transaction—whether the transaction cures a disease or clearcuts a rainforest. It is a system that deifies money and dilutes wealth…
Let Wall Street corporations and their phantom wealth machine slip into the abyss of their own making. Devote our public resources to building and strengthening Main Street businesses and financial institutions devoted to creating real wealth in service to their local communities.”