Thanks are due, of course, for your share of the $700-billion bailout that we taxpayers provided for the giant banks after their greedy and reckless behavior imploded our nation’s financial system and crashed our economy. But bankers are also wallowing in a much bigger, much more lucrative bailout that has received practcially no media attention.
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This involves the low, low, low, extremely-low interest rates set by bankers who control America’s monetary policy through the Federal Reserve System. In a point-blank giveaway, big banks have been allowed to keep borrowing billions of dollars from the Fed, paying interest rates of a mere one-half of one percent. But that’s not the half of this flim flam. Having gotten these public funds practically for free, the banks can instantly, with a click of their computers, lend the money right back to the government at an interest rate of three percent or more.
Yes, this means they are handed a 2.5-percent profit for doing nothing! They take public money from the Fed, immediately zip it over to the treasury department, collect their windfall profit, and brag about how “they” have restored profitability to America’s banking system.
Anyone with the brainpower of a turnip and the gumption of a bank robber could make money doing this, but top executives at Bank of America, Chase, Wells Fargo, and others who are flipping federal funds for their own fun and profit are now hailing themselves as financial geniuses. Also, they’re treating themselves like royalty – the $140 billion that Wall Street executives paid themselves last year is the highest on record.
These “geniuses” are mooches – their profits and their paychecks come from you. You might want to send a note to them, saying: “You’re welcome.”
“Penny Saved, And Far From Earned,” The New York Times, April 16, 2010.