The Presidents sequester offer slashes non-defense spending by $830 billion over the next ten years. That happens to be the precise amount were implicitly giving Wall Streets biggest banks over the same time period.
Were collecting nothing from the big banks in return for our generosity. Instead were demanding sacrifice from the elderly, the disabled, the poor, the young, the middle class pretty much everybody, in fact, who isnt too big to fail.
Thats injustice on a medieval scale, served up with a medieval caste-privilege flavor. The only difference is that nowadays injustices are presented with spreadsheets and PowerPoints, rather than with scrolls and trumpets and kingly proclamations.
And remember: The White House represents the liberal side of these negotiations.
The $83 billion subsidy for Americas ten biggest banks first appeared in an editorial from Bloomberg News which, as the creation of New Yorks billionaire mayor Michael Bloomberg, is hardly a lefty outfit. That editorial drew upon sound economic analyses to estimate the value of the US governments implicit promise to bail these banks out.
Then it showed that, without that advantage, these banks would not be making a profit at all.
That means that all of those banks CEOs, men (theyre all men) who preen and strut before the cameras and lecture Washington on its profligacy, would not only have lost their jobs and fortunes in 2008 because of their incompetence they would probably lose their jobs again today.
Tell that to Jamie Dimon of JPMorgan Chase, or Lloyd Blankfein of Goldman Sachs, both of whom have told us its imperative that we cut social programs for the elderly and disabled to save our economy. The elderly and disabled have paid for those programs just as they paid to rescue Jamie Dimon and Lloyd Blankfein, and just as they implicitly continue to pay for that rescue today.
Dimon, Blankfein and their peers are like the grandees of imperial Spain and Portugal. Theyve been given great wealth and great power over others, not through native ability but by the largesse of the Throne.
Lords of Disorder
Just yesterday, in a rare burst of candor, Dimon said this to investors on a quarterly earnings call: This bank is anti-fragile, we actually benefit from downturns.
Its true, of course. Other corporations in fact, everybody else has to survive or fail in real-world conditions. But Dimon and his peers are wrapped in a protective force field which was created by the people, of the people, and for well, for Dimon and his peers.
The term antifragile was coined by maverick financier and analyst Nassim Taleb, whose book of the same name is subtitled Things That Gain From Disorder. Thats a good description of JPMorgan Chase and the nations other megabanks.
Dimons comment was another way of saying that his bank, and everything it represents, is The Shock Doctrine made manifest. The nations megabanks are arbitraging their own failures, and the economic crises that flow from those failures.
These institutions are designed to prey off economic misery. They suppress genuine market forces in order to thrive, and they couldnt do it without our ongoing help. The Treasury Department and the Federal Reserve are making it happen.
We who have made these banks antifragile have crowned their leaders our Lords of Disorder.
Once Dimon told reporters that he explained to his seven-year-old daughter what a financial crisis is something that happens every five to seven years, which we need to do a better job managing.
Thanks to fat political contributions, Dimon manages them well. So do his peers. Misery is the business model. And by Dimons reckoning another shocks coming any day now.
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