I can't see how this is a surprise to anyone ...
In a recently released study from the Congressional Research Service we learn that the nation's largest banks profited off of our nation's financial crisis-era programs by borrowing cash for almost-zero percent interest. Then they lent it back to the federal government at substantially higher interest rates.
Yeah, that's right, deliberately low interest rate programs - designed and justified with the idea of getting money into the hands of ordinary middle-class Americans - were hijacked by banks who borrowed cheap money from Uncle Sam (a.k.a. the American taxpayer). They then showed their appreciation by hoarding it (for their rainy days).
And when it suited their interests they lent it back to Uncle Sam and the American taxpayer at higher rates.
Let's see, where I have seen this before ...
Oh, yeah. I've been writing about these dynamics for years now. So have others, like one of my favorites, Barry Ritholtz.
The worst part is that trillions - perhaps as much as $9 trillion - was spent, lent, credited, or guaranteed ("encumbered") by the Federal Reserve over the past years, but no one really knew where the money was going. Yeah, that's right, the people who are supposed to be following and tracking where our money goes are about as clueless as Chief Wiggins.
But nobody pays attention to this stuff because getting people to take a look at how America's economy really works (especially with Maiden Lane, TALF, and other trillion dollar corporate welfare giveaways) is akin to getting Americans to line up for a root canal. It might be good for them, but they simply won't do it.
So, we continue to live a lie, believing in the myth that the banks do the right thing and that "free markets work best."
Sigh ...
- Mark
In a recently released study from the Congressional Research Service we learn that the nation's largest banks profited off of our nation's financial crisis-era programs by borrowing cash for almost-zero percent interest. Then they lent it back to the federal government at substantially higher interest rates.
And when it suited their interests they lent it back to Uncle Sam and the American taxpayer at higher rates.
Let's see, where I have seen this before ...
Oh, yeah. I've been writing about these dynamics for years now. So have others, like one of my favorites, Barry Ritholtz.
The worst part is that trillions - perhaps as much as $9 trillion - was spent, lent, credited, or guaranteed ("encumbered") by the Federal Reserve over the past years, but no one really knew where the money was going. Yeah, that's right, the people who are supposed to be following and tracking where our money goes are about as clueless as Chief Wiggins.
But nobody pays attention to this stuff because getting people to take a look at how America's economy really works (especially with Maiden Lane, TALF, and other trillion dollar corporate welfare giveaways) is akin to getting Americans to line up for a root canal. It might be good for them, but they simply won't do it.
So, we continue to live a lie, believing in the myth that the banks do the right thing and that "free markets work best."
Sigh ...
- Mark
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