The Washington-based Center for Economic and Policy Research calculated that the below-market rates offered by the Federal Reserve to JPMorgan Chase — and 17 other large banks — accounted for 41 percent of the profits at Dimon’s banks.
They accounted for 47 percent of the profit at Bank of America, the group said.
A report by the CEPR compared the rates the Fed charged large banks to the rates it charged smaller banks.
The difference amounted to $300 for each of the 120 million families in the country — or roughly $34 billion.
“Most people, if you asked them what do you want to do with $300, I doubt the answer would be, ‘Why don’t we subsidize the large banks?’” said Dean Baker, the group’s co-director. “A lot of things we think are important cost much less — $30 billion annually would go a long way to subsidizing health care [costs for American families].”
Financial experts blasted the subsidy as corporate welfare.
“It rewards their irresponsible behavior in the past and encourages them to do the same thing again in the future,” said Simon Johnson, a professor at MIT’s Sloan School of Management.
If a company fails it goes bankrupt. But if a corporation fails it gets a bailout. What are the benefits to taxpayers if any?
When corporations form by buying up large amounts of small companies they should be made clear that if ever in the future they fail, they ought to sell off the smaller entities before begging for bailouts. And guess what, this is EXACTLY what happening now (in Europe) after the public’s outrage.
#1 by aidsstar on April 4, 2008 - 1:30 pm
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What you’re talking about doesn’t really have anything to do with Capitalism. In a truly Capitalist economic system there is no Government involvement in the Free Market, and it’s the Government involvements that creates all of these problems you’re talking about. In a real Capitalist system business that have poor practices like the banks, automakers and airline that lead to the eventual business collapse need to fail in order for the system to work. There have to be both positive consequences for operating a business correctly (profit), and negative consequences for operating a business incorrectly (failure/loss of capital). By not allowing these large companies to fail due to their size they are in effect saying that as long as you grow your company to a certain level you no longer have to worry about running it correctly because the Government will always step in and help you out when you fail. This is the exact opposite of Capitalism, and it’s this blending of radically different economic models that causes all of the problems in our society. If we moved to a Laissez Faire style free market economy it would force these companies to run themselves more efficiently and effectively.
#2 by Silenced1 on April 7, 2008 - 10:18 pm
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Capitalism is wrong but it is natural. It is as natural as the stronger sheep in a herd working their way to the center because they know the sheep on the outside will get victimized first.
Who do you think controls the Federal Reserve Bank and the United States of America (The corporation)? Answer: those families that have always worked their way to the center of the herd or have been the sheep herders for hundreds of years. The little capitalism that the little people enjoy is for the crumbs that fall from their table.
Pimping ain’t easy.
#3 by joey on April 10, 2008 - 12:54 am
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Capitalism, for that matter any social system, is not to be viewed in isolation for a few benefits it may shower on a group of people but has to be assessed for the overall benefits it brings to the people living under that system. If you take Russia, people had to be kept under lock and key with guards with guns, so that they may not escape the worker’s heaven. China was worse with people living in pre-industrial poverty chained by medieval traditions taboos and customs. in both places people were kept without even any means of communicating with the outside world, even though China is a military superpower the majority of the population is living in poverty and slavery, much like what was happening in Russia before the perestroika.
Communism assumes that if the state owns all the resources and it is held as common stock and a few enlightened people control the resources they will equitably distribute the resources controlled by them. For that we have to assume that the people entrusted with the responsibility to control the resources will by some magic become as capable as Gods and will somehow understand and foresee the requirements of every individual and weigh it with unerring judgment and distribute the resources in proportion to each individuals need in proportion to the total individual needs and the available resources, and also that each person regardless of the pay he is doled out will somehow rise up to the ideals and work to his full potential without needing any coercion. The power amassed by the party bosses will eventually enslave the people who are turned into vassals of the party bosses much like in the feudal system.
Socialism is a watered down avatar of communism which do not per se advocate full ownership of resources, but calls for arbitrary intervention and control of all economic and social activity by the elite ruling group at their whim who give the benefits to the people they favor.
Fascism is derived from the Italian word fascio, which means bundle or union, and is a dictatorship of a group that holds all the resources and the land and distributes them to whomever it pleases within the group in total exclusion of all people outside the group.
Capitalism rightly assumes that no man is God and that the only person who can assess your requirements is Only You and that only by mutual consent can and should people relate with one another. Capitalism requires the individual, when he associates with any group, to assert his will over that of the group in all matters, and associate with the group only on specific issues and not based on abject surrender of his mind, his will, to the group ethos. Each individual is equal before law whether he is rich or poor or black or white or man or woman or a leader or a follower. It requires you to retain control of your mind, and reject surrender, of any of the controls of our life, to any group formed in the name of whatsoever entity or intent. Pure capitalism does not permit even a democratically elected government to steal or limit an individual’s right or to enslave him except legally, when it is proved beyond doubt that he has committed a crime. It does not grant any sort of privilege to any person whatever be his status in life.
Under capitalism no one is prevented from doing any business nor is anyone given the sole right to do any business unlike in socialism and fascism where people are arbitrarily regulated by the leadership as to what they can do or cannot do.
There is no protection, nor is there any bailouts, efficient businesses thrive and inefficient ones die off just like people die.
Wherever capitalism is adopted as the system of governance, there is affluence, where communist, socialist or any other repressive systems prevail poverty and slavery are the results.
What you have described in it’s gory detail is the working modality of socialism and/or fascism.