For 66 years the Glass-Steagall act reduced the risks in the banking system. Eight years after the act was repealed, the banking system blew up threatening the international economy. US taxpayers were forced to come up with $750 billion dollars, a sum much larger than the Pentagon’s budget, in order to bail out the banks. This huge sum was insufficient to do the job. The Federal Reserve had to step in and expand its balance sheet by $4 trillion in order to protect the solvency of banks declared “too big to fail.”
In the 21st century Americans have been distracted by the hyper-expensive “war on terror.” Trillions of dollars have been added to the taxpayers’ burden and many billions of dollars in profits to the military/security complex in order to combat insignificant foreign “threats,” such as the Taliban, that remain undefeated after 15 years. All this time the financial system, working hand-in-hand with policymakers, has done more damage to Americans than terrorists could possibly inflict.
I, Michael Hudson, John Perkins, and a few others have reported the multi-pronged looting of peoples by Western economic institutions, principally the big New York Banks with the aid of the International Monetary Fund (IMF).
It is official. Detroit is bankrupt. Detroit is not only bankrupt they can now trash pensions owed to city workers. That is police, fire, hospital and a host of workers counting on those pensions for retirement. The U.S court ruling allows for a bankruptcy type for cities and towns, Chapter 9, to proceed and specifically puts pensions on the fair game bankruptcy chopping block.
JPMorgan Chase has settled with the DOJ for bundling up and selling toxic mortgages as derivatives to unsuspecting investors. The settlement is $13 billion. The news prompted another round of #AskJPM twitter mega sarcasm.
Tonight's documentary is Inside Job. Made in 2010, this is probably the best documentary on the financial crisis and it also won an Academy award. It should also make your blood boil and then bubble over considering business as usual is still going on. The conflicts of interest alone exposed in this film will stun you In short it's a must see and if you have watched it already, well, see it again.
Senator Elizabeth Warren appeared on CNBC's "Squawk Box" last Friday to discuss her proposed update of the Glass-Steagall Act and the big banks --- but the station's hosts didn't appear to be willing participants --- they almost sounded hostile.