by Jerry Alatalo
ow many have watched the credit card advertisements which promise “2% cash back” on all purchases without considering interest rates on the cards of 10%, 20% – or more if payments are late? According to those appearing in the short documentary film “Tales From the City”, these types of advertisements are analogous to tales told by corporate “storytellers” – lobbyists, marketers, and public relations firms – working for pharmaceutical, banking/financial services, auto, etc. corporations.
Those who earn their living promoting wealthy individuals/business entities’ interests have a strong propensity to, like messengers of inspirational thinking, “accentuate the positive, eliminate the negative”. Before the global economic crisis of 2007-8, they were the ones who repeated the mantra of “light touch regulation”, while Britain’s Financial Services Authority (FSA) and America’s Securities and Exchange Commission (SEC) almost completely relaxed carrying out their authorities to regulate and prevent the crisis.
The “storytellers” somehow became successful in convincing a lot of people wealth inequality was a good thing and “the right thing to do”. Of course, “greasing the skids” with campaign contributions doesn’t hurt the efforts of the storytellers in getting legislation passed which benefits their wealthy employers. As one man in the film plainly points out: “money is not given to politicians without expectation of something in return”.
This simple process, turbo-charged with the Supreme Court’s decision in Citizens United allowing unlimited spending on campaigns, explains how a few weeks ago Citigroup bankers dealing in derivatives slipped in their language to repeal important Dodd-Frank legislation; in effect putting American taxpayers back on the hook for certain potentially enormous derivatives bets/transactions losses. Despite strong objection and calls to consider the Citigroup provision separately led by Senator Elizabeth Warren of Massachusetts and others, the derivatives provision passed along with the must-pass ‘Cromnibus” spending bill to which it became attached.
While hundreds of top banking managers/executives became prosecuted and sentenced to prison after the Savings and Loan scandal of the 1980’s – a scandal which cost taxpayers 1/70th the losses in 2007-8, exactly zero executives are in jail. This despite overwhelming evidence of massive fraud safely described as “epidemic”. HSBC, the current poster boy for white-collar crime in the financial sector, is now surrounded by one more in a line of scandals resulting in nobody going to jail.
The disturbing thing about HSBC’s current scandal resulting from the release of leaked information about the bank’s facilitating large-scale tax evasion for its wealthy clients is that it took investigative journalists, not government tax authorities, to blow open the case/story. The woman nominated by President Barack Obama to replace Eric Holder as United States Attorney General – Loretta Lynch – has gotten into hot water for her earlier legal efforts in New York to protect HSBC top managers from doing time; settling for fines instead.
The fines never come from the pockets of accountable executives but from the banking institutions who come out far ahead when comparing illegal profits to penalties levied/paid. Often executives of financial institutions which have paid billions in fines end up with increased pay. Eric Holder’s time as head of the Department of Justice has seen zero banking executives convicted and jailed for financial fraud.
Instead of directing trillions of dollars of “quantitative easing” to American citizens to stimulate the economy, the Federal Reserve “bailed out” financial institutions by buying their toxic mortgage-backed securities/derivatives, the cause of the crisis in 2007-8, and executives used that money to buy-back their corporation’s own stock, thereby raising the price on the stock and increasing bonuses and pay for themselves. This explains the record-setting levels on the stock exchange, but the quantitative easing funds rarely become loaned to “main street” businesses for expansion, startups, or continuing operations which grow the real economy and create jobs. Europe is close to emulating America’s quantitative easing model.
So, politicians have become “bought and paid for” then push legislation with actions toward benefitting the corporations and individuals who provide campaign donations. If those actions and laws come in the form of “structural adjustment”, “sequestration” or the commonly known term austerity, so be it. If austerity results in downward-spiraling economic contraction, lower tax revenues, public employee layoffs, higher unemployment, poverty, desperation and suicide, public service cutbacks, privatization and selling off of public utilities/assets, and intensification of those economic problems as time passes, so be it.
If it means inaction on the decades-old, global, trillion-dollar per year tax evasion industry, facilitated by the world’s largest accounting and legal firms, so be it. On the other hand, the people of Greece may leave the Euro zone, take back monetary power through creation of a public utility central bank issuing pre-euro Greek drachma currency, and arrange their economy to serve the people instead of elites who use “storytellers” to advance their interests at the expense of the 99%.
Perhaps soon a completely new, inspirational meaning will come to mind when a man or woman anywhere on Earth uses the term “so be it”.
(Thank you to Press TV Documentaries at YouTube)