Simon Johnson, co-author of “13 Bankers” describes the rise of concentrated financial power and the threat it poses to economic well-being. He explains that over the past three decades, a handful of banks became spectacularly large and profitable and used their power and prestige to reshape the political landscape. He argues that the largest banks have become more powerful and more emphatically “too big to fail,” with no incentive to change their behavior in the future. Is this setting the stage for another financial crisis, another government bailout, and another increase in our national debt? [5/2011] [Show ID: 20776]
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The Wall Street Takeover and the Next Financial Meltdown
The financial world is once again on the brink of a major upheaval, with the looming specter of a Wall Street takeover and the potential for another devastating financial meltdown. As the global economy continues to struggle with the fallout from the COVID-19 pandemic, there are growing concerns that a series of high-stakes mergers and acquisitions could push the fragile system over the edge.
The recent flurry of activity on Wall Street has been characterized by a wave of consolidation and mega-mergers, as major financial institutions seek to solidify their positions and increase their market share. This trend has raised questions about the potential for monopolistic behavior and the creation of too-big-to-fail entities that could pose a systemic risk to the economy.
One of the most concerning developments is the proposed merger between two of the largest investment banks in the world, which could create a financial juggernaut with unprecedented power and influence. This consolidation of power has raised fears that the newly formed entity would wield excessive control over the markets, with the potential to manipulate prices and distort the functioning of the financial system.
Furthermore, the growing trend of private equity firms and hedge funds taking over distressed companies has raised concerns about the impact of financial engineering on the stability of the economy. These firms have been accused of prioritizing short-term gains over long-term stability, leading to the hollowing out of once-thriving companies and industries.
The potential consequences of this wave of consolidation and financial engineering are deeply concerning, as the concentration of power and the pursuit of short-term profits could sow the seeds of another financial meltdown. The lessons of the 2008 financial crisis, which was caused in part by the reckless behavior of too-big-to-fail financial institutions, seem to have been forgotten in the pursuit of short-term gains.
In the face of these developments, it is imperative that regulators and policymakers take action to prevent the potential for another financial meltdown. This could involve increased oversight of mergers and acquisitions, stricter regulations on the behavior of financial institutions and a renewed focus on the protection of consumers and the wider economy.
Additionally, there is also a need for greater transparency and accountability in the financial sector, to ensure that the actions of major institutions are in the best interests of the economy as a whole. This could involve increased disclosure requirements for mergers and acquisitions, as well as the implementation of measures to prevent anti-competitive behavior and market manipulation.
The stakes could not be higher, as the potential for a Wall Street takeover and another financial meltdown looms large. It is crucial that action is taken to prevent the pursuit of short-term profits from jeopardizing the stability of the global economy. Only through careful oversight and regulation can we hope to prevent history from repeating itself and avoid another devastating financial crisis.
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Sovereign nations that have the authority to issue their own currency can never become insolvent.
"The Government is not like a household. A government is like a bank. And a government running a balanced budget is like a bank that simply lends back as much as it gets in repayments, therefore the money supply never grows and without that, you don't have a growing economy.
It's one of two ways to create money, and if you don't let government create money by spending more than they take back in taxation (fiscal policy), you have to rely on the private banking system to create the money in the form of credit (monetary policy) and you therefore get private debt bubbles." ~ Prof. Steve Keen
Who will plan economies: Financial managers, or democratic governments?
Bonnie Faulkner: If there were pressures to create a New International Economic Order in the 1970s, what was this new order looking to achieve?
Michael Hudson: Other countries wanted to do for their economies what the United States has long done for its own economy: to use their governments’ deficit spending to build up their infrastructure, raise living standards, create housing and promote progressive taxation that would prevent a rentier class, a landlord and financial class from taking over economic management.
In the financial field, they wanted governments to create their own money, to promote their own development, just like the United States does. The role of neoliberalism was the opposite: it was to promote the financial and real estate sector and monopolies to take economic management away from government.
So the real question from the 1980s on was about who would be the basic planning center of society. Would it be the financial sector – the banks and bondholders, whose interest is really the One Percent that own most of the banks’ bonds and stocks?
Or, is it going to be governments trying to subsidize the economy to help the 99 Percent grow and prosper? That was the social democratic view opposed by Thatcherism and Reaganism.
http://www.unz.com/mhudson/de-dollarizing-the-american-financial-empire/
Former New York Times journalist Chris Hedges has described what is going on here and, as you probably have already guessed, it has nothing to do with beating Trump:
"Politicians like the Clintons, Pelosi and Schumer are creations of Wall Street. That is why they are so virulent about pushing back against the Sanders wing of the Democratic Party. Without Wall Street money, they would not hold political power.
The Democratic Party doesn’t actually function as a political party. It’s about perpetual mass mobilization and a hyperventilating public relations arm, all paid for by corporate donors.
The base of the party has no real say in the leadership or the policies of the party, as Bernie Sanders and his followers found out. They are props in the sterile political theater.
These party elites, consumed by greed, myopia and a deep cynicism, have a death grip on the political process. They’re not going to let it go, even if it all implodes."
Brilliant video, but leave the comedy to the professionals. CRINGE DAD HUMOUR
but when the World Currency is the Dollar, then neither the banks nor the Government can ever fail. This is the real reason why America remains the #1 superpower even though it purports to have a multi trillion dollar "debt" a trillion dollar student loan "debt" yet continues to spend more money and grow year after year. Our foreign policy is guided by 2 things: keeping the Dollar #1 and controlling who has nuclear weapons. The Federal Reserve is the Government's cash cow. The National "Debt" is a political tool which supposedly keeps track of how much the Federal Reserve gives the Government (in the form of computer numbers) but it's not a debt it's simply free, fiat currency MMT style and will never be paid back and yes the number will just keep going up and up and up with impunity.
Clintons eh? There happens to be another one that is getting a major biased of positive press to get her elected. Even google suggested search is biased O_O type up Hilary Clinton and see what is suggested. Then type up Donald trump and see what the suggested results are.
The American Government in partnership with the Bank Scamsters / Corporations are doing a Coup De Tat on its people through consumerism & creating a perpetually INDEBTED population. This ingenuous scheme is put in place in order to gain TOTAL CONTROL over the people. They need no armies or well equipped police force to do so it is that simple. The more we are asleep at the steering wheel we will ultimately crash into oblivion.
Recovery?! What recovery?! Where?!
Does anyone know if anything has been done since 2011, with people like Joseph Stiglitz, Robert Reich and Simon Johnson, telling us that we, the taxpayers bailed out the Wall Street banksters and they haven't changed a thing, only their soaring profits.
i like what i'm hearing!
The constitution of the United States was written by people who owned slaves. If you were black, women and those who did not own property could not vote.
You're wrong Simon, The banks need to take all the responsibility and falures of their risk assessments and not states of the world. If the bank fails, it's history.
banks must be nationalised, nothing seams more obvious that hyman minsky was correct to suggest that the history of banking shows they don't work without state support so as they are in the business of taking public money and making them selves rich on the back of that if we nationalised them teh profit motive would go and they could do what they are supposed to do, help finance private business and lend to their members/customers without the horrific inefficiencies of share holders bonuses and ludicrously high salaries
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As much as what Simon Johnson says is certainly true, he joins most (but not all) analysts by not giving sufficient attention to the role land markets play in all of this. The best explanation of the dynamics involved is found in the writing of economics professor Mason Gaffney (emeritus, U of California at Riverside). And, more recently, Gaffney's analysis has been picked up by Joseph Stiglitz. What they tell us is that ours is a society (one of many) dominated by a system of law and taxation that rewards rent-seeking over actually producing goods and providing services. The so-called capital gains tax is one means by which this preference is accomplished. Actual capital — i.e., capital goods — do not increase in value over time; they depreciate. To promote the creation of capital goods, the appropriate rate of taxation thereon is zero. Conversely, the value of land is an outgrowth of aggregate demand and the aggregate public and private investment in societal infrastructure that gives locational value advantage to some land over other land. This advantage appears in the economy as "rent," which Gaffney, Stiglitz and others declare should be collected as the primary source of revenue to pay for public goods and services.
YES, … AUDIT The FED indeed is a MUST Realistically.
Actually they can fail and will.
The GDP of the United States is now $21 trillion and it's debt is $17.8 trillion after the bailout and increases in entitlement payments which is now $2.5 trillion. You add in that the largest banks that now have holding company status today. They don't take the money from central banks but rather return it to the central bank at what .8% interest, basically zero % and use that to balance their sheets. Now if interest rates rise 1% you would be adding $1 trillion to the national US debt. So if the central banks can't raise interest rates to cut off cheap credit and they can't get inflation to take hold to offset the debt. Then you have no choice but to have a managed bankruptcy. Let the weak fail and restructure the good ones with good physical policy. That way the American people are not having to fit the bill for the whole $8 trillion in bailout. I would also remove government backed loans till the banks are no longer both investment banks and lender. If they choose not to breakup they don't get US tax payer backed status.
And do away with government backed mortgage loans and college. Let them get loans the normal way. As I don't see why someone else should be liable for another persons debt! I don't get the benefit of the house or education if they fail to pay it either. So why be stuck paying the bill!
Virtuous "something for nothing" scam. Print legal counterfeit currency. People work for free. Children are free slaves. The world is enslaved. We all work for free as free slaves. Government approves of our slavery with very few winners, mostly on Wall Street. It's a money bubble. If banks get 4%, on a 10:1 fractional system, THEY GET 40% interest. This is why banks are so rich growing to 40% of the economy. It's fraud, intended to be a fraud, planned as a fraud, for unlimited free currency. We have no money. We are bankrupt. The banks robbed the United States in 2008. Wall Street and DC rob Main Street. Children, families, renters, and employees lose. Bankers, brokers, owners, and government employees win. It's a rigged game. We have no free markets. I have to protect myself with gold and silver ( limited to 20% of net worth). Protect yourself. No one else can or will.
Iti s a Frankenstein type monster not so difficult to create, but because of its power very difficult to dismantle-
Of course you can afford to save the too big to fails, Its just a matter of debt. Extended time of debt. Effectively leasing the world for the next 100 200, 2000 years . How long in time cant a debt be ?
Why cant normal ownership rules apply to public money. ? Take over the bailed out Bank,and reform it.
Too big to fail = too big and dangerous to exist!
"To big to Save" – Very good way to describe the real problem.
Because the issue of the video in my journal is related to money, one should ask what's right accordingly for balance when coming to terms. Will you want save the people while you see what is unjust? How will you save them from the issue without justice?
BITCOIN!!!!!! Sadly we human are to greedy to be fare and a Currency like Bitcoin is the solution!
Get your money out of the banks. We need to use a currency that the bankers don't control. The only currency I know of that they don't control is crypto currencies like Bitcoin / Litecoin.
We either take control back or they keep doing this. It's up to us to change the currency we use or we continue to be banker's bitch's.
A nation is not an economy, it is a people with an identity.
AFRICA FOR THE AFRICANS, ASIA FOR THE ASIANS, WHITE COUNTRIES FOR EVERYBODY??
Racism is only racism when it is the people of the country trying to defend their ethnic interests, not when their anti-white ‘leaders’ defend theirs.
Anti-whites expect an entire race to disappear from the face of the earth without even mentioning, not even whispering about it.
Nobody's flooding Africa with Non-Africans and giving them free health care, affirmative action and special privileges.
Only White Countries are doing it, only White children are affected, and only White politicians are allowing it.
Anti-racist is a code word for anti-white. Diversity
We tried many systems. Monarchy,democracy,communism and the things inbeween. What it allways all boiled down to was a small elite controlling the rest. Humans are supposed to be smart. Would someone smarter than the rest of us please work out something that works for all of us?
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Wait a minute. I am stupid. I talk about political systems while I should be talking about monetary systems. They remained the same for centuries. There's your problem.
the world should look at how iceland dealt with the greedy criminal bankers they threw them in jail
13 dislikes from the 13 bankers.
Printing…type-o sorry.
Goverment needs the prinying presses NOT the shysters.