The Selling Of America

Photo Source: MorgueFile

I just can't help it. I look at the mess with the banks and how we bailed them out and I realize what suckers we have been played for. There is a documentary called “Inside Job” that really explains what happened on a level that we can all understand and if you look at it, you will be so disgusted with the government that you will leave with the feeling that all our lawmakers right up to the President of the United States are working for the banking industry. No it doesn't matter what party they are from. This is easily proved because President Obama has reappointed the exact same people that were involved in the banking disaster that cost us taxpayers a fortune. How can this be? Well lets look at what is really going on. The bank lobby has FIVE lobbyists for EVERY legislator in Washington. Yes FIVE. They spend BILLIONS of dollars lobbying their cause. What do we have? Almost nothing. You can see this by the plight of the common person and the fabulous fortunes made in the financial industry. I saw a statistic for one of the giant financial investment institutions and their average pay per year per employee was $600,000.00 in 2009, The average income for an American male over 25 years old is $43,317.

So how did we get to this point? It is interesting to note that before the big financial bubble, some traders were only making about $40,000 and were working two jobs. When the financial bubble came along, some of these same people were making millions of dollars per year. It is hard to imagine that things could turn around this much for them. How could this happen? It began when economists began to issue reports stating how rosy everything was and how the financial practices that were taking place were good for the economy. What we didn't know at the time was that all these economists were hired by financial institutions to write these reports and were making hundreds of thousands of dollars for doing it. An example of how this could ruin countries took place first in Iceland. The government wanted to sell the banks in Iceland to private companies, no doubt the politicians were getting something out of it. They hired economists to write reports that praised the practice. The banks were sold to large financial institutions that quickly ran up their dept to $100 billion dollars. This is in a small country that had only an 8 billion a year gross national product. The people of Iceland lost almost everything when THEY were held responsible for paying back everything. The banks had loaned out in some cases, over 30 times their assets.

One of the problems is that there is a huge amounts of conflicts of interest with many of the economists. Most of them never disclosed that they had been paid to write reports by the same people that were pushing for bank purchase. The same thing happened in this country with economists, they wrote all sorts of glowing reports praising the methods being used to make money for the financial institutions and stating that this was good for the country and that there was nothing to worry about. After the bubble burst we had to bail out these financial institutions. The first bailout was for $700 billion US Treasury Secretary Paulson had told us there was nothing to worry about and a day or two later you know what hit the fan.

One of the problems was the creation of derivatives. A derivative is a financial instrument that combines other financial instruments into one package. The financial industry figured out how to scam investors. What they did was give mortgages to anyone. Many of these were sub-prime The buyers hadn't put any money into the property so they didn't care about it and didn't care if they lost it eventually, they were living for free for years after they defaulted. The lending institution didn't care because they sold the mortgages to investment houses, who then bundled many of these risky mortgages into a derivative and had the rating agencies give them a AAA rating. These are the same mortgages that individually were junk mortgages.

The investment houses told their customers that since these were investments were rated AAA, they were a great investment. What the customers didn't know was that AIG the huge insurance company sold a type of insurance against these derivatives failing and the investment houses bought it, because they knew that they would fail and they were laughing at the people that were buying them and in internal memos and on telephone calls to each other they were talking about how these investment were shi*.

The investment houses were making money on both ends. They would sell the derivative to some poor sap and get the money for it, then they would collect on the AIG policy when it failed. That is what bankrupted AIG. AIG was the 29th biggest company in the world. All while this was going on the DA and later governor of New York Eliot Spitzer was telling the federal authorities that this should be investigated. According to the documentary drug use and prostitution were also rampant and ran right to the top of these companies. No one would listen to him. The same was being told to the treasury secretary by Dominique Strauss-Kahn, the head of the International Monetary Fund. Not one financial executive was prosecuted and none were touched for their other crimes. I am talking about the big guys here, not the small fry companies. Both Spitzer and Strauss-Kahn were disgraced and lost their positions. Was this just a coincidence? What do you think?

All the while deregulation of the financial industry in this country was taking place and it still is. These people have been give a license to steal and they are doing a superb job.