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Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region ForumsExplosive Bloomberg Editorial: Bank Profits are "almost entirely" Taxpayer Money
Last edited Fri Feb 22, 2013, 11:02 AM - Edit history (1)
So what if we told you that, by our calculations, the largest U.S. banks arent really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?
Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, its tantamount to the government giving the banks about 3 cents of every tax dollar collected.
So three cents out of every tax dollar the government collects from you is pocketed by the 1%.
http://www.dailykos.com/story/2013/02/21/1188894/-Explosive-Bloomberg-Editorial-Bank-Profits-are-almost-entirely-Taxpayer-Money
http://www.bloomberg.com/news/2013-02-20/why-should-taxpayers-give-big-banks-83-billion-a-year-.html
gollygee
(22,336 posts)n2doc
(47,953 posts)What a racket. No 'welfare queen' or climate researcher could ever hope to match that.
AndyA
(16,993 posts)when they should be focusing on corporate welfare to banks, oil companies, etc., and doing away with tax loopholes that allow America's largest corporations to essentially pay zero taxes.
Of course, those corporations also pad the campaign funds of those in Congress. Talk about a huge conflict of interest! We have to take MONEY out of POLITICS with publicly-funded campaigns. Only then will we truly get the BEST people in Congress.
Maineman
(854 posts)Cosmocat
(14,565 posts)I hate people sponging off the welfare rolls as much as anyone, but it is so obvious that CORPORATE and other business interests raid the tax payer dollar on an INFINITELY bigger scale.
But, half the people you meet are in conniptions over all these people who collect welfare and drive BMWs.
Tsiyu
(18,186 posts)BANKS? Have you no compassion for people who have more money than kings and queens?
The poor, poor dear Too-Big-To-Give-A-Fuck-About-The-Economy Banks DESERVE taxpayer assistance! Everyone KNOWS it's the working poor, babies and the elderly who sponge all the taxpayer funds!
Jeez. Leave the rich banksters alone so they can keep cheating us all, and demonize teachers and unions and public employees instead - if you have an ounce of empathy.
How else do you expect the wealthy Bigwigs at the banks to make their perverse profits and live like royalty? It takes a lot of money to develop proper scorn for the masses..... of taxpayers!
Safetykitten
(5,162 posts)bhikkhu
(10,718 posts)Last edited Fri Feb 22, 2013, 12:15 PM - Edit history (1)
...its simply that large banks pay a lower interest rate on the money they borrow. Any money anyone borrows is risk-assessed and the risk determines the interest rate. The assumption is that a larger bank (with more assets, etc) is a better risk. I think this is a general (and perhaps inevitable) market assumption.
on edit - I suppose the article is fair enough and explains its points, but I'd be happier if the thrust was toward a simple overall fair and progressive tax policy. Just stoking up fear and hatred and then suggesting nothing practical to do about it is irresponsible. You can't legislatively end a subsidy, when it really isn't a subsidy, and its much more practical to raise taxes a bit on the top tier (as Obama and congress has done) than to run out with a "break up the big banks!" message.
Personally, I think breaking up Walmart would be a goal at least as good, looking at all they've done to depress wages and gut local economies in this country, and how much they cost the taxpayers in subsidies...but people just keep shopping there!
Jerry442
(1,265 posts)It's true these banks will not default on these loans and hypothetically that makes them a better risk than smaller institutions, but the reason these banks will not default, is that their continuing solvency (on paper anyway) is guaranteed by the government no matter how egregiously risky or destructive or illegal or just plain insane their behavior may be.
This is bass-ackwards nationalization. They get all the gold in the gold mine and the taxpayers just get the shaft.
Voice for Peace
(13,141 posts)GIVE IT BACK!!!!!!!!!!!!!!!
DireStrike
(6,452 posts)I love the guy whining about GM.
OnyxCollie
(9,958 posts)WillyT
(72,631 posts)Egalitarian Thug
(12,448 posts)The global banking and monetary system collapsed in 2008. It wasn't a narrowly diverted disaster, a correction, or an anomaly. There has been no recovery, no turn-around, and things are not getting better. It was the inevitable end of an unsustainable system built by an infinitesimal class to benefit no but themselves.
The citizens of the world and their decedents for generations to come have been robbed. We have been indentured to international criminals to cover up their crimes and build an illusion of solvency so that those criminals will not have to suffer the consequences of their actions.
And the saddest thing of all is that so many of the victims are completely happy about it because they don't want to deal with the reality of what happened and have avoided most of the pain inflicted on those weaker than themselves.
xtraxritical
(3,576 posts)mettamega
(81 posts)THANKS FOR POSTING
another_liberal
(8,821 posts)These thefts are publicly available data. Can you even begin to imagine the amounts they must rip-off from people on the sly?
Every mega-banker should be arrested immediately and tried for fraud, just on general principles.
marble falls
(57,099 posts)Berlum
(7,044 posts)and we know damn well the 1% Republican Banksters started and are funding their sick little party of pernicious delusion.
2naSalit
(86,643 posts)freshwest
(53,661 posts)I hear you. I am for nationalizing a whole bunch of things too. I think it's the only way we can survive as a people. There are too many in this country who drank way too much of the Raygun kool-aid who need to sober up and figure out that their (and our collective) asses are ablaze with napalm and something realistic and fair needs to happen immediately. A world population that is supposed to revolve around equality cannot be based on capitalism nor a petroleum based economy, especially with a world population of 7 billion+.
Demeter
(85,373 posts)Shut down the banks and jail the banksters. And as for Timmeh.....
jtuck004
(15,882 posts)a Depression. I have that from the highest authority, flag-draped people here who called me a Republican (I was agonized, I'm sure) on this board for suggesting that it was wrong to let 5 million people be yanked from their homes, to let the number of people on food stamps and the number of people we categorize as "working poor" increase to record levels, and let tens of millions of mid-wage jobs be replaced with millions of low-paid positions with no future, while we sent money to banksters so they could shower occupy protesters with McDonald's applications.
I keep expecting to have to call JPMorgan Chase & Co., or Citibank's phone system and hear "to reach the Democratic Party, press 7".
Egalitarian Thug
(12,448 posts)I say similar things and I'm a left-wing loony, pony wanting, Obama h8r.
jtuck004
(15,882 posts)actually afford a pony. Now I just kinda feel pity for people who don't know it's possible, though I sometimes try to help them see that dissent is is actually helpful. If the flag they are draped in isn't blocking their vision too badly, that is.
deminks
(11,014 posts)econoclast
(543 posts)Even Bloomberg can be stupid sometimes. Yes, banks that are perceived to be Too Big To Fail can borrow for less than would otherwise be the case. However, no funds are trransferred from the taxpayers to the banks. Other lenders charge them less than otherwise because those lenders BELIEVE that the banks are TBTF. So, the subsidy comes from the other lenders, not from Uncle Sam.
To the extent that the TBTF banks pay taxes on the extra profits they earn by being able to borrow on the cheap...the banks are subsidizing the government. Not the other way round.
Now, if the banks actually ARE bailled out by US .....THEN and only then do the taxpayers subsidize the TBTF banks.
Blanks
(4,835 posts)and if the FED loans banks $7.77 trillion dollars for a profit of $13 billion; which I'm sure is just added to the debt that we have to pay off: that seems an awful lot like we're subsidizing banks.
http://abcnews.go.com/m/blogEntry?id=15040869
I don't know how else to categorize it. If I remember correctly - the FED was loaning banks money practically interest free (0.01%) and then borrowing that money back from them at around 3%; just so the banks could make money. Then they could turn around and pay huge bonuses at the same time the Federal Government was implementing TARP.
I'm not sure how that makes Bloomburg look stupid?
Angry Dragon
(36,693 posts)Uncle Joe
(58,364 posts)Thanks for the thread, kpete.
Spitfire of ATJ
(32,723 posts)What's sad is you get the idea that Obama walked in and asked, "What can I do?" instead of "Here's what we are going to do."
bvar22
(39,909 posts)Ed Schultz announced yesterday that 50% of the American Work Force NOW works for Minimum Wage or Less.
[font size=3]Hold On to Your Memories, SUCKERS!
Because we're taking everything else,
and ain't NOBODY gonna stop us!
Hahahahahahahahaha![/font]
You will know them by their WORKS,
not by their rhetoric, promises, or excuses.
[font size=5 color=green]Solidarity99![/font][font size=2 color=green]
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Octafish
(55,745 posts)But, it's all happy times now, as that news is good for Wall Street, which is all that matters for those in government, at every level and in all three branches.
AnotherMcIntosh
(11,064 posts)to the banks, who helped support job-transferring "free-trade" agreements, and who helped impose endless debt-related obligations on ordinary Americans.
As just one example, they should thank the politicians who voted in favor in changing the bankruptcy laws so that former students and their families can never discharge government-promoted student-loan debts in bankruptcy.
It's all the Republicans' fault?
Octafish
(55,745 posts)Send us the bill. We like that.
Sherman A1
(38,958 posts)Thanks for posting.
cbrer
(1,831 posts)That Corporate Fascists and Federal politicians are becoming more brazen and uncamouflaged about their greed and immorality?
They don't give a shit if we know or not.
Berlum
(7,044 posts)Republicans stuff their pockets and gullets with our money, then whine and threaten if a homeless mother gets a crust of bread for her children.
Republican "values" are right out of the moral cesspool.
harun
(11,348 posts)Angry Dragon
(36,693 posts)Wednesdays
(17,380 posts)That's just in relationship to THIS matter. God knows how much they pocket overall!
DhhD
(4,695 posts)aquart
(69,014 posts)benld74
(9,904 posts)HEY DIMON! What do you think the effin position YOU put yourselves in with MORTGAGES on the global scale, DID to this country!?!> IT weakened its position in global finance!
FIX the FINANCE of the country AND you will be able to compete globally! You would KNOW this but you're to effin busy lieing and lining your pockets with OUR cash!
limpyhobbler
(8,244 posts)Fire Walk With Me
(38,893 posts)cilla4progress
(24,736 posts)As per Steven Brill's Time cover story on our screwed up health care / billing system: it's the "customers" who are funding the obscene CEO salaries, fancy buildings and capital "improvements," outrageous waste.
blkmusclmachine
(16,149 posts)woo me with science
(32,139 posts)fasttense
(17,301 posts)Instead of the government using the corporations to maintain power, the corporations use the American government to maintain their stolen wealth.
Mussolini had nothing on these banksters.
Benton D Struckcheon
(2,347 posts)Post 22, where he says what actually happens is they're charged less on loans because they are known to be TBTF.
Hyman Minsky, a Keynesian who wrote a biography of the man, and for whom the "Minsky Moment" is named, said the cycle runs like this, and is the reason each cycle is worse than the last:
1 - Banks invent some new way of making money.
2 - It blows up.
3 - The Fed steps in and guarantees the losses when the blow-up occurs.
4 - The new way of making money is now perceived as backed by the Fed, and so is now made use of even more recklessly, laying the foundation for the next blow-up to be even larger, since in the next blow-up both the way of making money that was ratified by the Fed in this cycle and the new one that pops up in the next need to be guaranteed to keep the whole thing from falling to pieces.
What happened this time is that not just the new way of making money, CDOs and CMOs in this cycle, but the banks (and AIG) who blew up as a result were guaranteed against loss. So now, the banks who were saved are perceived as being bulletproof along with the new ways of making money that were guaranteed by the Fed in 2008 and 09.
No one of course knows when the next big one will be, but one thing everyone knows, even if they don't say it in public: it'll be even worse than this one was.
This one was just the appetizer. The main course is coming.