One of the strokes of genius in the Occupy Wall Street movement was to push forward with nebulous complaints about rich people and just assume there are enough pissed off people, enough mindless sheep, and enough liberal journalists that the cause would take off.
They were right and now there are pissed off people occupying everywhere, except gainful employment or a classroom apparently.
Matt Taibbi, a Rolling Stone writer and self-important
douchebag jerk of colossal proportions, did the OWS movement a favor with what was an astonishingly lucid explanation of Occupy’s beef.
That would be great, except maybe 1% of the so-called 99% down at Liberty Plaza or any other ‘Occupy’ movement have any idea about what the banks are doing.
I wonder if he was actually even there.
I saw anti-capitalist sentiments there, not anti-bank. I saw pro-left signs and anti-Republican signs, but nothing about the Federal Reserve.
Taibbi is (gulp) right when he talks about the absolute absurdity of a system that lowers interest rates on lenders (sometimes even 0% rate) so they can lend that money to the government at a profit.
Ordinary people have to borrow their money at market rates. Lloyd Blankfein and Jamie Dimon get billions of dollars for free, from the Federal Reserve. They borrow at zero and lend the same money back to the government at two or three percent, a valuable public service otherwise known as “standing in the middle and taking a gigantic cut when the government decides to lend money to itself.”
You read that right. The banks are getting free money from the Federal Reserve (the government) that they give to the government who pays them for it.
Banks can borrow money from the Federal Reserve at low or no interest, and then buy Treasury Bills (the government debt from spending) and the government will pay interest on the T-Bills.
Yet, these lenders can’t seem to stay solvent.
That’s where the greed comes in. They take the money they make and more, then make more risky investments (anything is riskier than getting money for free and lending it at a profit).
Without question, the banks are screwing this up for everyone. Furthermore, as I’ve explained, the low interest rates help banks, they don’t help you and me.
Those things need to change, but Republicans and Democrats alike agree those rules need to change.
Taxing the rich doesn’t stop banks from taking advantage of these systems, it only encourages to take further advantage of them to maintain their profit shares.
Fix the broken system, but don’t punish those who aren’t a part of that system.
Why should someone like Steve Jobs (may he rest in peace) have to be punished when he’s advancing technology and bettering society?
That doesn’t just mean fixing this odd banking system. Remember, this is a market function put in place by our government. The government has to be more accountable to the way it handles money.
It ought to be clear by now that the spending of government has gotten out of hand, which means the government should be borrowing less, paying less in interest costs (for its own bleeping money!), and spending less.
It doesn’t make sense to blame the banks for this. If I told you I’d give you $100, then asked you to borrow that same $100 only I’d give you $102 back for it, you’d say yes right? You have to pay the original hundred back but that’s $2 for free.
Think about that with a bank and $100 million. At two or three percent that’s $2 million in profit from a U.S. Treasury bill when they got a bond from the federal bank.
The Federal Reserve is different than the U.S. Treasury, but the U.S. Treasury keeps the Fed’s profit.
Two million in free dollars is great, but over five years that is nothing to Goldman or the other big lenders. They don’t want two percent over five years, they want 20% this year.
That’s why they lend money to you and me at 6% or on credit cards at 18%.
It’s ironic that the Democrats want to take more money from the people their system has made rich, the same people who run the lending companies from whom the government is already borrowing to pay its bills.
It’s an incoherent position Taibbi asserts when he complains about free market failures thanks to government bail-outs and credit backing programs that allow these banks to screw up without consequence (Ummm…Matt, that’s not the free market then chief)
To be fair to him, he was probably too busy admiring himself in the mirror to realize.
If the banks couldn’t rely on the government to leverage their own lending, they would likely be more responsible with the way they lend.
Likewise, since the government can just arbitrarily raise its own revenue stream (you and I call that “taxes”), there is no accountability for how that money is invested (you and I call that spending).
Government can spend and spend because it can borrow and borrow, plus just plain take money from you and I to pay its bills.
Attacking capitalism doesn’t do anything to address the problem of out of control spending by government and irresponsible lending by both the government and the big banks.
There’s nothing wrong with the guy who opens a deli or the construction company developing a new McDonald’s down the street from it.
That drives any economy.
What’s wrong is the left pointing fingers at business when the finger should be squarely facing their own direction. There were plenty of Republicans who didn’t want the massive bail-out to banks just like there are myriad conservatives like Paul Ryan who want to change the way government is funded.
There’s a problem with the system. Let’s fix it and make sure businesses can’t cheat the system as Taibbi puts it.
But punishing everyone is cheating the people who are playing by the rules, the people who made the American economy the standard by which all others are measured.