But hey, Democrats and Republicans are working tirelessly to cut Social Security and Medicare to \u201cstrengthen it for the future.\u201d (I\u2019m sure Orwell is turning over in his grave, or laughing hysterically, I can\u2019t decide which.) Clearly, in the hallowed halls of Congress, shoring up Jamie Dimon and Lloyd Blankfein\u2019s net worth takes precedence over shoring up the social safety nets that the majority of Americans rely on.<\/p>\n

On February 27, we watched as Elizabeth Warren grilled Ben Bernanke in a senate hearing. She repeated a\u00a0Bloomberg News <\/a>report that big banks (such as Citibank, JPMorgan Chase, Wells Fargo, Bank of America and Goldman Sachs) are subsidized to the tune of $83 billion dollars per year. We are as outraged as Warren\u2014a shocking figure, indeed. Big banks have $9 trillion in assets, more than half of the US economy. But, according to Bloomberg<\/a>, in the absence of taxpayer subsidies, they would just about break even. Chris Whalen<\/a>, one of the leading independent analysts of the US banking and financial system, says that figure is way off the mark. He estimates the subsidy is more like $780 billion per year<\/a>.<\/p>\n

John Aravosis at Americablog<\/a> makes an interesting point.<\/p>\n

What\u2019s particularly interesting about that figure, $780 billion, and something no one has yet noticed, is that it\u2019s almost the exact size of the fiscal stimulus that was passed in early 2009 to save the economy: $787 billion. \u00a0Except that the bankers\u2019 stimulus is being spent every single year again and again and again. \u00a0The Republicans, and some Democrats, never cease to talk about \u201chow much money\u201d we \u201cwasted\u201d on the supposedly \u201cfailed\u201d stimulus. \u00a0But you never hear them talking about the same amount of money that\u2019s been actually wasted on their bankster friends.<\/p><\/blockquote>\n

TBTF zombie queens<\/strong><\/p>\n

Whalen calls the big banks \u201cTBTF zombie queens,\u201d and for good reason. The members of the banking industry pretend to be profitable, risk-taking organizations operating in a free-market economy, but, in reality, they are government-sponsored private entities where all profits are subsidized and all losses are charged off to the taxpayer. He writes:<\/p>\n

By my conservative reckoning, the subsidies for the zombie banks total more than $3 annually for every dollar in income reported by the industry in profit. The industry reported $35 billion in profits in Q4 2012, so we\u2019ll call annual income about $150 billion annually.<\/p><\/blockquote>\n

Here\u2019s how Whalen adds up the $780 billion dollar yearly subsidy:<\/p>\n

\u25aa $360 billion in Federal Reserve subsidies, by creating an artificial, and guaranteed \u201cspread\u201d in interest rates where the banks borrow cheaper than any consumer can, and then lend the money back to the government at much higher interest rates. Whalen notes that in Q4 2012, the interest expense for the entire US banking sector was just $15 billion vs over $100 billion at the start of 2007.<\/p>\n

\u25aa $120 billion in federal deposit insurance (through the FDIC, backed by the Treasury).<\/p>\n

\u25aa At least $100 billion in government-guaranteed loans, especially mortgages.<\/p>\n

\u25aa At least $100 billion in monopolistic advantages in the secondary market for home mortgages.<\/p>\n

\u25aa More than $100 billion in fees in the over-the-counter (OTC) derivative market. Whalen explains:<\/p>\n

The lack of capital required in these transactions and other special dispensations from the Fed provide the zombie banks with unlimited leverage and almost no public scrutiny. The fact that OTC contracts are exempt from the automatic stay in bankruptcy is a huge subsidy.<\/p><\/blockquote>\n

A growing number of experts are calling for the break-up of giant banks<\/strong><\/p>\n

Top economists, including Joseph Stiglitz, Paul Krugman, and Nouriel Roubini, and even past Fed chairman Alan Greenspan and current Fed chairman Ben Bernanke say TBTF banks must be broken up.<\/a><\/p>\n

Why do TBTF zombie queen banks need to be broken up? In no particular order:<\/p>\n

\u2022 They engage in massive manipulation of the world\u2019s biggest markets. Their size allows them to rig the market.<\/p>\n

\u2022 They continue to engage in reckless behavior and risky speculation that could lead to another melt down plunging the economy into another recession<\/p>\n

\u2022 They are not contributing to the economic lives of the majority of Americans<\/p>\n

\u2022 They dominate the banking industry, and their questionable practices harm local, small banks.<\/p>\n

\u2022 \u201cToo big to fail\u201d has become \u201ctoo big to jail.\u201d The rule of law has been undermined and compromised by the symbiotic relationship between politicians, regulators and banks.<\/p>\n

\u2022 The corruption of the political process through the buying of influence in both parties is damaging the country and undermining democracy.<\/p>\n

\u2022 They are zombies, i.e. they are on public life support, yet they are enabled, year after year, by Democrats and Republicans, to wield tremendous power over the economy and political process.<\/p>\n

\u2022 Taxpayer money used to subsidize bank profits could and should be used to benefit the majority of Americans.<\/p>\n

\u2022 it’s time to end the “malignant, symbiotic relationship between big government and big corporations.”\u00a0<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

But hey, Democrats and Republicans are working tirelessly to cut Social Security and Medicare to \u201cstrengthen it for the future.\u201d (I\u2019m sure Orwell is<\/p>\n","protected":false},"author":4,"featured_media":23281,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"nf_dc_page":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1514,869,93,1815],"tags":[2508,2488,152],"yoast_head":"\n