On Wall Street the last affront to public confidence, nine lucky banks with $ 125 billion in taxpayer money to rescue troubled under the Asset Relief Program (TARP) was reported on July 30, 2009, payable Billions of dollars in bonuses to its executives. At least 4793 bankers and traders received more than $ 1 million each in bonus payments, despite the fact that Wall Street was one of worst years ever. After months of investigation by the bank compensation, New York, Attorney General Andrew Cuomo said, "The repeated explanation of the bank executives that the premiums are tied to performance in a manner designed to promote (the economy) growth does not appear be accurate. "
Saying that this is an understatement would be an understatement. Bonuses paid to executives not only were not linked to national economic growth, but were not even linked to some reasonable percentage of company profits. In fact, were generally higher than the net income of banks. Morgan Stanley, for example, $ 1.7 billion in revenue and paid $ 4.475 million in bonds. Goldman Sachs had $ 2.3 billion in revenue and paid $ 4.8 billion in bonds. JP Morgan Chase had $ 5.6 billion in revenue and paid $ 8.69 billion in bonds. JP Morgan 1626 shower executives involved generosity of your favorites and traders with bonuses of $ 1 million or more. For most people, a "bonus" is a few hundred dollars at Christmas time. One million dollars is what a lifetime of work to try to save, and few people reach that goal. Including Citigroup and Merrill Lynch, which have been called zombie banks, paid $ 5.33 million and $ 3.6 billion in bonuses, respectively – although it lost more than $ 27 million each in revenue. The merits of the bar is apparently so low that you are entitled to a bonus if your bank just keeps breathing zombie!
These blatantly inflated bonuses are just the latest in a litany of abuses committed by these banks debauchee that almost destroyed our economic system. If the derivatives of his books were "marked to market" (value of what they could obtain on the market), banks are bankrupt, and its employees will be a job. Instead, they have been allowed to increase the value of its "toxic" assets – and sell them to the U.S. government inflated in value. So they have taken the money they got from the government in these inflated prices and return the money they received TARP – as it allows them to inflate earnings and rewards of inflation with bonuses! Many people think that these bankers are thieves stealing from the public until we take a look at imprisonment. But who is there to end their parade of insults? Nobody in Congress, the White House or the media are called on the carpet for him. As Senator Dick Durbin said recently, Congress owns Wall Street and that is also true of the mainstream media.
We may be unable to stop them, but you can join them. We the people must play the game ourselves bankers. Even giant corporations like General Motors and WalMart have gotten into the game and banks are easing their credit problems by forming their own banks. U.S. the public sector is late to the party. States, counties, public universities could take the system for the lucrative private banking industry has created for itself and turn into productive use in the public interest.
MAINTENANCE OF BANKS WITH SOME HONEST public
Obama President in the week of July 17, reiterated his call for a public choice in health care, in order to "increase competition and keep insurance companies honest" and "end the worst practices of the insurance industry. " The same call has to be done for an option in the banking public. In some countries, public-owned banks have acted together to privately owned banks for decades, and in those countries, the present crisis has served to demonstrate that public banks generally do a better job of serving the people and protect their private interests than their counterparts.
In Canada, trends in banking, is the province of Alberta. Alberta’s publicly owned banking system, called the Alberta Treasury Branches or ATB, began during the Great Depression private banks provide a period for public money. According to a government publication, entitled "These are the facts: an authentic Alberta Register Progress, 1935-1948":
"The Treasury Branch system allows people to pool their financial resources and use these resources for mutual benefit, enabling them to gradually get rid of the oppression of the existing financial monopoly. These branches of the Treasury a ensuring effective competition for banks and banking services at a reasonable price. "
From 1929 to 1933, the average annual income in Alberta had fallen from $ 548 to $ 212, a staggering fall of 61 percent. Interest payments to farmers are still bleeding cash, and taxes have increased. In 1935, the province decided that he wanted a sweeping change and Alberta Social Credit Party in power. In 1938, the system of the Alberta Treasury Branches was created literally as a branch of the provincial government. The stated aim of the ATB was "providing people with alternative facilities for access to their credit." Bankers Alberta initially scoffed at the attempts to establish an economic system competing but Alberta had high hopes and rushed to put their meager savings to the Treasury of the branches. The government invested in the ATB at once, contributing $ 200,000 in 1938. That was all that was necessary because the system is self-funding after that. In 1946, the ATB was turning a profit of $ 65,000 annually. According to a brochure entitled "Investing in Alberta 1938-1998", 1998, the ATB had paid $ 68 million to the provincial government.
In India, public sector banks also operate in conjunction with the private sector banks. Privatization has made significant progress in the banking system of India, but 80 percent of banks are still owned by the Government. Before the current crisis, neoliberals criticized the banks of India because it is more oriented toward customer service that make a profit, but studies showed that the public sector banks out of the realization of private sector banks in terms customer satisfaction. Today, when the credit crisis has affected the aggressive particularly hard private international banks, customers are fleeing to the safety of India’s public sector banks, which have emerged largely unscathed from the debacle of credit. Public banks have been credited with maintaining the country’s robust financial industry at a time when the private sector international banks are suffering their worst crisis since the 1930s.
In China, the private banking sector has also made some progress, but state-owned banks still dominate. In June 2009 an article entitled "The Chinese puzzle: Why is China Growing exports when other power, right?" Sets Brad noted that almost all countries that depend heavily on exports for growth and have experienced large declines remain in stalemate – except for China. When markets fell outside of China, the government turned his machine into the interior of credit for domestic development. His state-owned banks involved in a huge increase in loans to local governments and state enterprises for loans to large scale. The result was the creation of a fiscal stimulus to the workers who put the work and got back the money circulating in the economy.
In the United States, the trend in banking, is the state of North Dakota, which has its own bank for nearly a century. North Dakota is one of only two states (along with Montana) currently faces no budget deficit. Since 1919, revenues from North Dakota have been deposited in the state-owned bank in North Dakota (BND). Under the "fractional reserve" lending scheme open to all banks, these deposits are available for the mobilization of many times in the form of loans. Other banks in the state do not see the BND as a threat, as partners with them and backstops, which acts as a sort of central bank for the state. BND loans are not insured by the Federal Deposit Insurance Corporation (FDIC), but are guaranteed by the State. North Dakota has a lot of money for student loans, makes low-interest loans to start farms, has the lowest unemployment rate in the country, and generally do not feel the pinch of the credit crisis at all .
THEORY AND PRACTICE: The proof is in the pudding
A bank letter brings the privilege of creating credit simply as an accountant on the books of the bank. The flaw in the system of private banking is that banks create the principal portion of their loans, but not the interest, which is continuously removed from the top as profit. New borrowers must continually be found to make new loans to create this additional benefit, the private banking effectively a pyramid scheme, like any pyramid scheme, has mathematical limits. Today, those limits appear to have been achieved. Personal and national debts have reached so large in relation to income which is no longer possible to maintain the fiction of solvency. Soon will not have the money to pay even the interest on our debt, much less to engage in new ones. Public banking does not suffer from that flaw, because the interest is not drawn outside the system, but it returned to government coffers. Banking service is therefore mathematically sound and sustainable.
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