The other day I saw a video of Dennis Kucinich, an American Congressman, reviewing a scandal which I thought was years old. It was actually breaking news with important new information. Just when you thought Wall Street’s scandals couldn’t get much worse, details have come to light this week thanks to persistent investigative journalists who’ve revealed that the Federal Reserve gave $7.7 T R I L L I O N (Trillion, with a ‘t’) dollars to banks since 2008, interest free, to bail them out, on top of the TARP money of $800 Billion. If your mind, and sense of rage haven’t both blown up, you’ve either run out of steam or haven’t yet realized how much this has hurt you.
Occupy Wall Street exists in large part due to the people who cooked up this secret Fed loan (which has since been repaid, at no profit to the public, but with plenty of profit to private bankers estimated at $13 Billion). Canadian banks snuggled up to the secret trough too, even though they like to claim they never needed any bailout money. TD Canada Trust, Royal, Scotia, and many other banks all made hundreds of millions of dollars in profit from the American public’s money, in secret, revealed only due to investigative journalism. Congress was deceived (and if it was not, and was secretly in on the scam, then the public has a lot more to worry about).
Americans may be furious that Canadian and world banks made billions from their money, while there are literally millions of Americans living without healthcare that the rest of us take for granted. I expect people to go to jail for this kind of deception. Given what I’ve seen so far, I don’t expect even trials for the criminals who perpetrated this fraud that makes Bernie Madoff look like a schoolyard bully.
So what do we do about it? Support your local Occupy Wall Street movement. If you have unresolvable differences with the organizers in your city, start your own chapter! Then with your group, push for these ideas to happen.
First: Demand a hearing where the bank executives have to answer questions—under oath—about the actual negotiations, or lack thereof, that led to these loans; about the actual condition of each of the borrowing banks and whether that condition differed from the public statements made by the banks at the time.
Second: Require the recipient banks to use this previously undisclosed gift—the profit they made by investing this almost interest-free money—to write down the value of mortgages of those who are underwater. The loans to the banks were meant to solve a short-term liquidity problem, not be a source of profits to fund bonuses. Take back the profits and put them to apublic use.
Third: Require the government officials responsible for authorizing these loans to explain why there was no effort made to condition these loans on changes in policy that would protect the public going forward.
Fourth: Ask congress to examine every filing and statement made to Congress by the banks about their financial condition and their indebtedness to see if any misrepresentations were made in an effort to hide these trillions of dollars of loans. Misleading Congress can be a felony, and willful deception of the Congress to hide the magnitude of the public bailouts should not go unprosecuted.
Finally: Demand that politicians return all contributions made by the institutions that got hidden loans. Pressure the politicians who continue to feed from the trough of Wall Street, even as they know all too well how the banks and others have gamed the system and the public.
And in Canada, the complicit banks ought to repay the American taxpayer with interest. As a compromise, I’d accept it if they all sent a letter to each of their account holders explaining where they got some of their money for profits from, so all Canadians realize that we were “bailed out” too. We were bailed out by the Americans, and the American 99% didn’t even know it either to gloat or fume about it. Now they may know.
ADDED: As of April 2011 it was known that foreign (to America) banks had used TARP money.
Now the scandal is so much bigger it’s mind boggling. Inflation is about to get severe (over the next few years) in the United States. I expect the Canadian tourism industry will take a huge hit, if our dollar doesn’t plunge with theirs.
ADDED: As part of TARP, this money would have had conditions. But it wasn’t TARP, and the destinations of the loans were secret. This link explains why Bloomberg knew to dig for this 7.7 Trillion, but no one in the public knew, not even Congress supposedly, where it had gone. You’d have thought Congressmen might have worried about $7.7T though?
Consider if there were 250,000,000 tax paying Americans. At $7.7T every one of those Americans gave a loan of $30800 to banks like RBC and TD. Tax paying Americans made no money from this loan, they simply delayed doom. The Fed created that $7.7T out of thin air, so it will depress the value of dollars already in Americans’ pockets.