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BANK BAIL-OUTS: WHEW, THERE IS SOMETHING ROTTEN IN AMERICA!
BANK BAIL-OUTS: WHEW, THERE IS SOMETHING ROTTEN IN AMERICA!
THE PROBLEM
In my opinion: A government or an individual cannot to solve a problem by treating the effect of the problem alone, exclusive of discovering and eliminating its underlying cause. Americans are reaping the effects of a flawed financial system and flawed fiscal policies. For example: The U.S. government has told its citizens that the troubled, big banks are too big to fail, therefore they must be bailed out. This is absurd. These big banks are too big to succeed. They were and continue to be mismanaged as they have not properly accessed their investment risks and loaned out too much money to too many people who could not pay the money back. The government has and continues to reward the failure of these troubles, big banks by giving them billions of dollars (federal reserve notes) so that they can go right on, losing yet more billions of dollars. These bail-outs will not solve the problems that caused the bank's loses in the first place. They will only act as a bandaid, treating the effect of the problem, while ignoring its underlying cause, thus prolonging our downward economic spiral and delay any kind of economic recovery.
We are experiencing a total corruption of capitalism. For instance, have you noticed that there is no transparency by the Federal Reserve as to who they gave trillions of dollars to, and that bank regulators are not allowed to review the books of these big banks? Where there is no transparency, there can be no trust. Also, did you notice the double standard and preferential treatment that was revealed through congressional testimony as Congress did not require scrutiny of the books, business plans and investments of these troubled, big banks before giving them huge sums of bail-out money, as they did with the "Big Three" automobile manufacturers? And there were, and are, no conditions upon which these huge bank bail-outs are given. This is it a huge ruse in order to steal untold billions of dollars from the American taxpayers or is it that these troubled, big banks are all bankrupt and are not allowing their true financial conditions to be known because if the bank regulators confirmed this fact, the banks would be forced to shut down, file bankruptcy and be liquidated all assets. Or perhaps it is both; either way, it is wrong. The major owners/stock holders of these troubled, big banks are apparently powerful enough to coerce the Federal Reserve, Congress and the bank regulators to remain silent regarding this scheme. To state that there are too many men, in positions of power, making poor fiscal decisions, would be an understatement. One thing is certain: The Treasury Department/Federal Reserve gave, and the troubled, big banks took, these huge bail-outs without due process, and their cohorts, at the top levels of our government, approved it. In effect, this is deceit, betrayal and theft.
THE SOLUTION
The Government should take action immediately. Double standards and preferential treatment must stop, and full transparency must begin. All bail-outs must be accountable and no more blank checks be written. If the troubled, big banks are indeed bankrupt, they should be allowed to fail and file bankruptcy just as any other business must do when it fails. The government should then take over and sell the company's assets to the highest bidders, just as was done by the Resolution Trust Corporation (RTC) in the 1990's. However, all American assets should be sold to verifiable, American citizens only.
What can American citizens do? Well, we surely should not reward such behavior. Until our government requires these big banks to come clean by requiring bank regulators to legitimately review their books and make determinations of financial condition for all to see, concerned Americans may want to consider taking the following action: Speak out against this unacceptable behavior. Write the banks involved and your representatives at all levels of government, expressing your concerns. Stop doing business with these banks, i.e., stop making deposits, stop using their credit cards, stop buying their investment instruments, stop investing in their stocks and bonds, and withdraw your money from these banks, and let the banks know why you are doing this. The troubled, big banks may fail anyway, regardless of all the money thrown at them, therefore, it may be prudent to find a healthy, regional bank of high ethical character and a good financial history, with which to do business.
List of nine largest banks/corps. which have been bailed out as of January 2009:
American International Group (AIG), Bank of America, Citigroup, Fifth Third Bank, Goldman Sachs, J.P. Morgan Chase, Merril Lynch, Morgan Stanley, New York Mellon Bank, Wells Fargo.