Bill Moyers Program on the Bank Follies and Jamie Dimon

Watchcat is concerned about big banks getting $76 billion in U.S. taxpayer dollars. Photo credit: Alert Musubi by Chika on flickr cc

The Rude Awakening that Bankers are Acting Like the Mafia

Bill Moyers interviewed Matt Taibbi, contributing editor of “Rolling Stone” and Yves Smith, creator of the finance and economics blog, Naked Capitalism, about what is really going on with big banks like JP Morgan Chase, Wall Street and Government.

Yves Smith wrote, ECONned: How Unenlightened Self Interest Undermined Democracy and Corrupted Capitalism. Matt Taibbi recently authored, “The Scam Wall Street Learned from the Mafia.”

Matt Taibbi and Yves Smith on Banks, Government and Jamie Dimon’s Testimony

Bill Moyers pointed out that a recent article by Bloomberg News, “Dear Mr. Dimon Is Your Bank Getting Corporate Welfare?” revealed that

“JP Morgan Chase receives a government subsidy worth about $14 billion dollars a year [of U.S. taxpayer funds] according to research published by the International Monetary Fund and our own analysis of bank balance sheets.

The money helps the bank pay big salaries and bonuses. More important, it distorts markets, fueling crises such as the recent subprime-lending disaster and the sovereign-debt debacle that is now threatening to destroy the euro and sink the global economy.”

Demos’ Nomi Prins on Jamie Dimon’s Testimony Before Congress: Dimon’s Role in the $2 Billion plus loss at JP Morgan Chase

The banks are the biggest drain on government resources yet they turn around and fleece the taxpayers who keep them afloat. While big banks get 0.0% interest from the Federal Reserve, the banks like Citicard and JP Morgan Chase turn around and charge their customers 5% to 30% interest for credit cards, loans and other financial instruments. Why should banks get away with this scam at the expense to taxpayers? Who do these people think they are?

Senator Bernie Sanders Discusses CEO of JP Morgan Chase, Jamie Dimon’s, Testimony Before Congress

The Bloomberg article continues:

“To estimate the dollar value of the subsidy in the U.S., we multiplied it by the debt and deposits of 18 of the country’s largest banks, including JPMorgan, Bank of America Corp. and Citigroup Inc. The result: about $76 billion a year. The number is roughly equivalent to the banks’ total profits over the past 12 months, or more than the federal government spends every year on education.

JPMorgan’s share of the subsidy is $14 billion a year, or about 77 percent of its net income for the past four quarters. In other words, U.S. taxpayers helped foot the bill for the multibillion-dollar trading loss that is the focus of today’s hearing.”

The Wall Street Casino

The System is Broken and It Needs to Be Restructured

Wall Street and the big banks have profited from the recession while average people are struggling with increases in their credit cards, no interest on their savings, and tremendous job losses due primarily to the major banks dealing in highly exotic and risky derivatives and other financial instruments.

Jamie Dimon continues to tell Congress that the banks can regulate themselves, but it is clear that the $2 billion dollar loss Chase recently admitted and is still counting is the tip of the iceberg regarding the large banks abuse of their client’s money. It seems the large banks are worse than any casino because the money at their fingertips is far greater than any casino’s bank. However, the banks frequently engage in ridiculously risky trades that could drive down the entire economy with the domino effects as we have seen from the mortgage backed securities scandals.

It is time to reign in the wild wild west abuses of the large banks and to pass meaningful financial reforms that will put our economic system back in balance so that the divide between rich and poor narrows to benefit more people instead of only the top 1%.