Hopefully you've all seen/read the Bloomberg News story by now, of how the Federal Reserve secretly channeled over $7.77 TRILLION dollars into the large banking institutions via virtually interest-free (0.01%) loans during the financial crisis of 2007-2009. That's right, folks: $7.77 TRILLION with a T. It makes the meager $700B TARP bailout look like pocket change by comparison. And if it weren't for a disclosure lawsuit, argued all the way to the highest court in the land, you and I still wouldn't know about it.
Making Money on Our Money
Here's where it gets really good. So the banks got $7.77 TRILLION in FREE (0.01% interest is basically free) money from us – money we don't have, and representing about half of our GDP – and then they got to turn it into $13 BILLION in profits, too! How? Sure, some of it was via traditional lending (you know – charging you & me interest and fees), but they earned a lot of that profit by investing in US treasuries. Yep, that's right. The government, as the Federal Reserve, gave money at 0.01% to the big banks; then, as the Treasury, turned around and paid the banks around 3.3% on US treasury bonds that they invested in. WHAT THE FUCK?
Feeding the Rich, Starving the Poor
Enter the draconian cuts. Unless you've been living under a rock, I'm sure you've noticed all the deficit/debt cutting talk that's been going on in Washington this year. "We're in fiscal crisis! We must cut everything!" Of course, the proposed cuts from the right side of the aisle always come to programs like education, Medicare and Social Security. Sadly, many on the left have joined in on the talk, saying "it's necessary to compromise."
Social Security is currently operating at a fairly long-term, $22 TRILLION surplus! Yet, we're giving away trillions to the banks and demanding that Social Security recipients make a sacrifice? That's fucked up.
Let's say the Federal Reserve got back every penny of the money they loaned to these institutions. Do you think that keeps us in the black, that it was a prudent investment? Remember that the US Treasury paid out over 3% interest on the bonds the banks bought with their free money; so even if we got all money back on the Reserve side of the chain, we lost it on the Treasury side. Banks win, we lose.
Total Secrecy
Of course, our idiots in Congress might not have been arguing for cuts to the working man had they known what was going on, and that's the kicker – they didn't know! How on god's green earth can our Federal Reserve Bank have so much power that it can move around nearly $8 TRILLION without anyone in Congress knowing? Do you think Congress would have voted for TARP if they had known that nearly $8T had already been basically given to the banks for free? In fact, if it weren't for a Freedom of Information Act lawsuit filed to open up the documents surrounding this, we still wouldn't know! It's unfathomable to me that we can have this level of gambling going on with taxpayer money, yet we're not allowed to know anything about it.
Creating Jobs
One talking point many of the big banks have been eager to trot out, first during the TARP bailout, and more recently during the Occupy Wall Street protests, is that much of that money was used to loan money to small businesses to create jobs. Hear that? They're altruists! Did you know that many of those same banks are off-shoring greater and great percentages of their own staff (particularly IT) to places like India, Hong Kong, Taiwan, etc.; that they're often laying off their American workers in order to replace them with cheaper counterparts overseas? Wanna give 'em some more free money now?
Where's the Media?
Of course, you're probably bored reading this piece about the situation because you've been so inundated with stories about it by the mainstream media, right? Ha! Fat chance! Since Bloomberg broke the story last week, I've seen or heard very little of this. The leading national news shows might have given it a quick mention the night after it broke, but little else. In fact if you go to MSNBC's, the New York Times' or FOX News' websites right now, you won't see anything on their front pages about this. Why not?!!! This should the lead story on every newspaper, website and TV news show EVERY DAY until people are fired and real regulations are passed. This shouldn't be allowed to pass, and our journalism industry should be the ones holding feet to the fire. Where are they?
Fire Geithner NOW
Many of us have been calling for Geithner's head for years. Before this story broke, we already knew that he was a Wall Street insider who helped facilitate the mess that led to TARP. I think that was enough for most of us to be pretty displeased when Obama tapped him to be his Treasury Secretary. Now that we know TARP was only the tip of the iceberg, I don't think we should even have to be asking anymore; Obama should just have the sense to fire him. Apparently he doesn't, though, so let's start SHOUTING the message.
Occupy Wall Street
Are you beginning to see why the Occupy Wall Street protests exist, why they're growing and why people are pissed? As a result of the big banks' misdealings that led to our financial crisis, millions of Americans have lost their homes. Many more have lost their jobs. How many of them do you think are getting bailed out? "Oh no, we couldn't afford that!" But we can afford giving the big banks $7.77T in interest-free money that we didn't even have, then turn around and PAY THEM interest on that money when they buy our bonds? REALLY? And then watch these fat cats make record profits and turn around and start paying themselves record bonuses again? REALLY? The question isn't why are all the Occupy folks protesting, but why aren't the rest of us all joining them and demanding some real change (as well as some heads)?
Demand Accountability
This story will die only if we allow it to die, and that's why it is dying right now. The media, and the government via the media, carry a lot of power in controlling what message reaches your eyes and ears. However, it's a brave, new (ok, not so new anymore) digital world out there, and we have the power to circumvent the message that's chosen for us. Do you want accountability? Well, if you're reading this, chances are you also have a blog, Facebook account, or some sort of online presence that allows you to disseminate your message, what you feel is important. If you don't, you probably at least have email. SPREAD THE WORD. Let's get our outrage over this so spread out, so pervasive, that the powers that be can't ignore us anymore. This is one we can't let slide, kids. If this little gamble had failed, we would have been – pardon my French – fucked beyond belief. That's not what I want for my children. We need to do better, and we can do better. That means taking our government back, once again making it "by the people, for the people." That means no secrecy, and not letting the corporations control all our money (and all the politicians and appointees that control that money).