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Yesterday I sat at my sewing machine trying to work out an intricate method of quilting. My mind usually wonders as I supervise the work of the machine, guiding when necessary, changing the tension when necessary, turning the material etc., this repetitive work becomes automatic after a while so I am able to multitask while doing this. I started thinking about TOO BIG TO FAIL…that term irks me to no end. When I start thinking about this issue I think back to an article I read last year, I’ll place a paragraph from it here and also the link for those who might be interested in reading it:

Not only have the world’s richest been the biggest beneficiaries of the monetary and fiscal policies since 2009, with the current 2170 global billionaires representing a 60% increase since 2009 according to UBS, but their consolidated net worth has more than doubled from $3.1 trillion in 2009 to $6.5 trillion now. At the same time, the net worth of the “bottom 90%” of the world’s not so lucky population has declined. Yet, somehow, the Fed is still revered.

http://www.zerohedge.com/news/2013-11-23/worlds-2170-billionaires-control-33-trillion-net-worth-double-us-gdp

Too big to fail? Does that mean for instance if I personally have billions of dollars like Bill Gates, Carlos Slim Heu and Family, Warren Buffet, Amanico Ortega, the Koch Family, the Walton Family and others I am too big to fail?

Capitalism is apparently a continuous merry go round of bubbles and then burst where the economy is concerned, but the too big to fail are actually bailed out by the too poor and too insignificant to matter when it comes to returning the economy to its former self, or at least attempting to do so through the use of the Central Banks. Why has the planet decided to allow this to happen with very little outrage?

Naturally, as in global financial conspiracies, the question arises: Is it possible that instead of representing the interests of the general population, what the central banks simply do is follow the instructions of a far smaller cabal, that of the world’s uber wealthy? I wonder…

A couple of days ago I watched a program on one of my favorite networks, Free Speech TV. I enjoy watching and listening to Democracy Now which is a news program featured on the network. An eye opening interview got my attention. Matt Taibbi and a whistle blower that worked for J.P. Morgan Chase were featured. I personally felt this information should be viewed by the members of PlanetPOV so I am placing it here for your viewing enjoyment/Enlightenment.

We worry about our elections; we wonder why our election results are what they are and what we can do to get better candidates into office so that we can stop the unequal, unjust society we live in. Will we ever be able to do this as long as we have laws that and a justice system that literally lets some in our nation get away with confiscating the wealth of others while incarcerating others for something as simple as stealing a loaf of bread? I say, as long as we allow things of this nature to take place in our nation. As long as we continue to elect politicians that are turning a blind eye to this type of activity or only administering a slap on the wrist after these things happen, we really don’t have much hope.

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RSGmusic
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RSGmusic

Monica
This is just logic no links and sighting cases or people.

WOW too big to fail???? Again this is not natural at all for all things in nature and financial, If it get to big it dies or in business becomes to corrupt.

Here is the Key to why these people do not get put in Jail (CEO , bankers, politicians and billionaires) .

It is called cascading Goals.
( the magic words saying we the top executives are above the Law )

These people just say our companies will act with in the law. Then other goals are stated etc ,etc.to pass down the levels of employees. Well Now, every employees is responsible to do and must operate by the law. Well not matter what you charge them with. The bank CEO , gov official or billionaire you have to get thru every single layer of the company or political stooges before you can get to them. Well Some one will have broken the law before them and he gets sued or arrested. If there are non guilty the top just bribes one person to fall on the sword. Eccentrically They bank, CEO , gov official or billionaires are above the law.

Simple correction in law to solve some of the problems but not all.
Make the law state that if anything illegal or laws broken by accidents or actions involved. the bank, CEO , gov official or billionaire are the first person to prosecute and put in jail.

Then go after the lower levels of employees who broke the law.

For all things have a time under nature and when your time runs out. look back and see all the good in your life before eternal darkness envelopes you.

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kesmarn
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choicelady and monica, thanks for a wonderful article and comment. I wonder what both of you think of this article that appeared not too long ago in Mother Jones:

http://www.motherjones.com/politics/2014/07/eugene-scalia-court-antonin-financial-reform-dodd-frank

The gist of it seems to be that Eugene Scalia (yes, the son of that Scalia) is engaged in trying to destroy Dodd-Frank by way of a sort of “Death By 1000 Cuts” process. Do you think this tactic will work?

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choicelady
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Hi kes – I subscribe, but it’s on my ‘guilt pile’ of unread everything, so I appreciate your reminding me to read it!

This is my largest worry – the grinding away at really good legislation, bit by bit. As long as there is a veto pen, much of the large cuts won’t happen, but yes, this IS their game plan, and it’s already working.

If I have one criticism of our president it is that he believed that the GOP were not stupid enough to kill democracy by putting the nation on the brink of economic catastrophe in government shut down to GET sequestration and thus cuts to non-protected programs. He was wrong. They are.

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Nirek
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Kes, lawyers (pronounced liars) will be the scourge of America. I often wonder if they have a conscience?

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kesmarn
Admin

In this case, Nirek and monica, the (rotten) apple sure didn’t fall far from the tree.

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choicelady
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Well, that should have worried us all in the 1990s when in law after law, we took down the barriers between us, the public, and the rapacious financial corporations in our nation. There was absolutely NO excuse for this march toward chaos since we’d just weathered the Savings & Loan disaster based on deregulation of that sector.

Some new things – derivatives, hedge funds, real estate investment trusts (REITs)etc. – were considered outside the financial sector and were allowed to grow and flourish with no regulation from the beginning. We caved under Clinton to the mantra under the GOP- deregulation encourages competition: competition brings wealth to all.

Uh huh.

When the crash came in 2008 (some of it started in 2007 but was ignored by the Bush administration) it came from ANOTHER unregulated sector, the mortgage brokers. It was they, not banks, that wrote the horrid subprime mortgages. Over 55% of the people shoved into subprimes actually qualified for prime rates, but they were new customers who were preyed upon by the brokers. What the banks MOSTLY did was buy these mortgages, but unlike the old days when they bought YOUR mortgage, they bought ‘bundles’- sort as if all our mortgages were shredded, and they bought strips of many bundled together. One mortgage could be owned, in “strips” by several different banks.

Banks – freed from protecting OUR money by Depression Era Glass-Steagall (named for two dead Senators) could use our SAVINGS and CDs etc. for their insecure gains. THAT is why they were ‘too big to fail’ – it would take down our money just as in 1929. That exceeded the capacity of the Federal Deposit Insurance Corporation to cover.

The bail out was meant by Bush and Paulsen to be without strings. Then came the 2008 election – and all this has changed.

First, the president had Tim Geitner (who seriously knew the way the system worked but used that knowledge to curtail the excesses at the president’s direction) monitor all federal loans WITH STRINGS that prevented payouts to CEOs and other executives until the loan was repaid. And they WERE repaid with interest in record time. No CEO bonus? Highly motivating!

Second, Dodd-Frank was written putting far more capital requirement for the solvency of any bank, and it permits – ready for this? – the government to NATIONALIZE any failing bank. In Dec, 2013, the Volcker Rule went into effect, restoring the firewall between bank money and OUR money. That is the firewall that Glass-Steagall had provided. It is now restored.

Here is a very good column on how it’s working:
http://www.nytimes.com/2014/08/04/opinion/paul-krugman-dodd-frank-financial-reform-is-working.html?_r=0

Banks and bankers were NOT prosecuted because while even progressive slept thru the 90s, they made sure what they did became perfectly legal. That is NOT true for mortgage brokers who, across the country, have been prosecuted for fraud by US Attorneys in almost every US District Court.

Other parts of the free-wheeling excesses of corporate finance capital have been reined in by the Consumer Protection agency and its oversight – this is what Elizabeth Warren was hired to run though she was never confirmed by the Senate. She went ahead and set it all up – and it is running without her or any other ‘official’ and doing just fine.

This is a lesson for us as consumers and voters – we cannot ever go to sleep and think all will be well. Every day predators who lobby on K Street for Wall Street will try to change laws that benefit us for those that benefit themselves. Democracy is not a spectator sport. We now have a VERY solid floor under us, we have made banks NOT too big too fail or even be nationalized, but with this new Congress, every day they will try to undermine what is just reclaimed. It is entirely up to us to stop them.

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Sabreen60
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Sabreen60

CL, IMO, no one explains this stuff better than you and Spandan. It’s amazing to me how you’re able to put all this in layman’s language so that even I can understand it. As you stated, if the banks and especially AIG had been allowed to fail, we would talking about The Great Depression 2.0. And I doubt if the economy would be any where close to the recovery we’ve seen.

People like to talk about throwing the bankers in jail, but thanks to Clinton and Bush, much of what they did was legal. Sure I would have loved to see CEOs and board members wearing stripes, but as you said what they did was legal. Now, they will at least not be able to take down the whole economy again.

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choicelady
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This is the real problem – we were not watching closely enough, and we thought the existing laws would protect us. We didn’t pay enough attention to the fact many new instruments – derivatives, hedge fund transactions, etc. – were never regulated and that GLB shattered the most fundamental protection of all. We can’t let that happen again!

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Nirek
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CL, when the banks were bailed out it would have been better not to. Instead we should have given the homeowners enough money to catch up and some to help them get ahead and allow them to refinance at a lower interest rate. Doing that would have cost us less and kept the banks going, too.
Hindsight, pretty good from my perspective.

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choicelady
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Remember this happened under Bush – it was left to PBO to organize it in the best way possible, and he was able to get some major mortgage relief programs for people in trouble during the next two years.

He inherited the bailout – and I think the bailout per se was essential lest the banks fold. That would have utterly destroyed most of us on Main Street because it would have taken down all our savings as happened in 1929.

As it stands now, this can’t happen again. Unless we once again pay no attention and allow the law to be gutted.

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Nirek
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CL, if the bailout had been of the home owners it would have save the banks, too.
By bailing out the banks there were many homes repossessed and some of those are now abandoned.

This was done in the trickle down theory instead of my theory of trickle up!

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choicelady
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I don’t disagree, but we’re talking largely about your SAVINGS here – and the face amount vastly exceeded FDIC reserves. People would have lost everything. That is different from the homeowner mortgages – those should have been rewritten. The bailout did not focus on that but on the assets of banks, and Bush plus Paulsen took this course of action, and PBO made it stronger. Yes, we should have provided far stronger protection for mortgage rewrites – the laws exist after 2009 but were not well implemented.

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choicelady
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Have to reply here.

This is so muddy I can’t totally unpack it, but your assertion about short term borrowing is not accurate. Credit unions and community banks can and have offered short term loans at low rates.

What you miss is that preferential rates for huge financial institutions is the system, always has been. That is NOT new. That is why CDFI and related non-banking institutions are growing by leaps and bounds with the aid of this administration’s policies FAVORING smaller institutions and systems for alternative banking. In Fruitvale, Oakland, an amazingly innovate “payday” lender and check cashing operation is bringing people in to offer loans at low rates then link them to better options such as credit unions. They do financial counseling for loans of larger size to people with really poor credit ratings.

All of this has been the outgrowth of the system we FINALLY paid attention to in 2007-08. But it would not be going so fast and strong without the NEW policies aimed at Main Street instead of Wall Street that enable these operations.

Critique without options is not getting us anywhere. We need to unpack what was from what can be and is happening – and then DAMNED WELL protect these advances. You’re rehashing policies from the Bush and Reagan era that are, slowly because of GOP pushback, changing things for the good and holding back the floodgates against the rapacious capitalists who want their old privileges back.

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choicelady
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monicangela – they were NOT interest free loans! They were also quickly repaid because of the restrictions PBO put on bonuses. They have now all been paid back WITH interest.

The lunacy is in the banks’ capacity to deduct FINES from their income taxes. That is something never passed by Congress because the supermajority in the Senate lasted a whipping 6 months (Franken in, Ted Kennedy and Byrd out) so changes were blocked by the GOP.

But the loans were NOT interest free.

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Nirek
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Obviously we think alike, Monica. Raygun had the trickle down theory which amounts to us little people getting pissed on. Corporations and businesses can’t earn a cent without customers. Banks would not be without people taking loans and writing checks and such. It all starts with the regular citizen buying a house or some product. That is why I call it trickle up.

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Nirek
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WOW Monica! You hit on a subject I care very much about.
When the corporations deemed “too big to fail” were bailed out, I was pissed off! Let them fail, put the execs who drove the corporation into failure in jail and confiscate all their misbegotten wealth to be distributed to the people they hurt!

Do this just once and watch how the execs of other corporations act. They will make better decisions with investors money!

The only thing that is too big to fail is the USA, in my opinion.

Well done with your article! Great subject and the link and video are excellent as well.

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Beatlex
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Beatlex

I saw them interviewed Monica.I too am appalled by that phrase.They should be allowed to fail,and some of them in charge should be thrown in jail.Maybe then some fairness can be brought back and the middle class rejuvenated.It is the decline of the middle class that cost the Democrats the mid terms IMO.Corporations are making out like bandits while average Americans have seen their wages stagnate.
Good post

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choicelady
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Beatlex – there is not one damned thing the government can do about wages other than raise the bottom. Period. We are NOT a socialist state – and even socialist states such as Sweden and Germany have no control over that. In European controls, they may specify the RATE of increase to slow things down but cannot increase wages at all.

Too big to fail was structured to be LEGAL so wanting bankers arrested? Exercise in futility.

It will be so much up to us over the next years to watch these GOP corporatists like hawks. We have to be sure of our ground on what laws and regulations they are trying to change – and protest loudly when they undermine US in favor of THEM.

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