The Big Bank Theory

[Serge_Tomiko]

No one found this yet?

http://bostonreview.net/BR35.1/baker.php

Wall Street bankers, along with the rest of the players in the financial industry, like to think of themselves as swashbuckling capitalists. They battle cutthroat competition with one hand and oppressive government bureaucracy with the other. In reality, the financial industry is deeply dependent on the government. Far from the rugged, go-it-alone types they wish they were, they are more like well-dressed, coddled adolescents. And this is true in good times and bad.

[iyamwutiam]

Re: The Big Bank Theory

Very well written article thanks for the share

[Master Shake]

Re: The Big Bank Theory

Excellent analysis.

[unlucky]

Re: The Big Bank Theory

A very good analysis. But the article does accept that we will stick with fractional reserve banking which is arguably the root of all the problems. Perhaps a pragmatic reality for now ... but only until the banks create a crisis big enough to destroy it.

[oddlots]

Yeah I love this piece. Nice find. Does anyone else get the feeling that the criticism is sort of building in clarity. I guess we shouldn't be surprised: any society that believes we were going to get rich in aggregate selling each other our houses was going to take a while to understand why that couldn't happen much less who it might benefit if they did believe it.

Linked this earlier but I think its a good companion piece to the Dean Baker piece:

http://www.newdeal20.org/?p=5330

Couple of great points to my mind:

• Corporate stock repurchases and grants of stock to officers have exceeded new capital raised by the U.S. capital markets this decade. That means that the capital markets decapitalize the real economy. Too often, they do so in order to enrich corrupt corporate insiders through accounting fraud or backdated stock options.

- Forty years ago, our real economy grew better with a financial sector that received one-twentieth as large a percentage of total profits (2%) than does the current financial sector (40%). The minimum measure of how much damage the bloated, grossly over-compensated finance sector causes to the real economy is this massive increase in the share of total national income wasted through the finance sector’s parasitism.

God's work indeed Mr Blankfein. (God how I hate these people.)

(Apologies to EJ if he made these points over the years which I suspect he did. I think I belong in the remedial class. Perhaps Metalman could teach it. He certainly knows the canon.)

And one final thing: Black makes a passing reference to this phenomenon:

Dead Peasant Insurance

This I think is the most f-ing outrageous thing I've ever read and absolutely the best symbol of this age I've ever come across. Also the best demonstration of my favourite quote regarding democratic politics:

"What's the point of having a constituency if you can't sell them out." Harold Wilson

(I'm extra pissed off tonight, so excuse the hyperbole. I made the mistake of hitting those links to the Beck and Palin show some joker posted. Not funny. Not funny at all.)

[Serge_Tomiko]

Re: The Big Bank Theory

A very good analysis. But the article does accept that we will stick with fractional reserve banking which is arguably the root of all the problems. Perhaps a pragmatic reality for now ... but only until the banks create a crisis big enough to destroy it.

There has been a lot of doom and gloom on here lately (I've certainly relished in it as well). I thought it presented an interesting, yet pragmatic view of the situation that was still sternly dismissive of Wall Street.

[unlucky]

Re: The Big Bank Theory

There has been a lot of doom and gloom on here lately (I've certainly relished in it as well). I thought it presented an interesting, yet pragmatic view of the situation that was still sternly dismissive of Wall Street.

Oh, I agree. One of the best discussions I've seen coming from a non doom-and-gloom source