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It's important to point out the vastness of the vast banks, but I am
uncomfortable with this specific comparison - of bank assets on the
one hand, to the US total production per year on the other. One is
measured per unit of time, the other isn't.<br>
<br>
I'd be happier with a comparison of bank assets ($8.5 trillion,
yikes) to the total accumulated US gov't debt (around $14
trillion). Or better yet, with total US household net worth, around
$57 trillion as of 2010.<br>
<br>
Or maybe better, with total US household net worth of the bottom
99%. Cutting off that top 1% of the people removes around 37% of
the total household worth, leaving $36 trillion. (Those figures
from <a
href="http://en.wikipedia.org/wiki/Wealth_in_the_United_States">http://en.wikipedia.org/wiki/Wealth_in_the_United_States</a>,
and through it, <a
href="http://www2.ucsc.edu/whorulesamerica/power/wealth.html">http://www2.ucsc.edu/whorulesamerica/power/wealth.html</a>
and <a href="http://www.levyinstitute.org/pubs/wp_589.pdf">http://www.levyinstitute.org/pubs/wp_589.pdf</a>
(~:)).<br>
<a href="http://www2.ucsc.edu/whorulesamerica/power/wealth.html"></a><br>
<font face="Arial" size="2"><br>
<big>> If the crisis is acute enough the state will nationalize
the banks.</big></font><big><br>
<br>
I surely hope so, but wasn't it acute enough last time? Won't the
next collapse just be blamed on the current Administration,
saying, We didn't adequately follow free market principles?
(Sorry, but I'm in a cranky mood and that comment ticks me off.)<br>
</big><br>
<br>
On 4/20/12 7:32 PM, David Johnson wrote:
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<h2 class="date-header"><span>Friday, April
20, 2012</span></h2>
<div class="date-posts">
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itemscope="itemscope"><a
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<h3 class="post-title entry-title"
itemprop="name">Five US banks hold
56% of the US economy </h3>
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id="post-body-4327308307335642176"
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CLEAR: both" class="separator"><a
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style="MARGIN-BOTTOM: 1em;
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MARGIN-RIGHT: 1em"
href="http://4.bp.blogspot.com/-iiWMTQmePd8/T5HGfDpJw8I/AAAAAAAACoY/vfmaH6aOS4s/s1600/pol_banks17_inline4051.jpg"
imageanchor="1"><img
src="cid:part6.05030600.07020402@illinois.edu"
border="0" height="400"
width="323"></a></div>
Public money sure helped the <i>"Big
Five" </i>and I'm not talking
about the sports retailer.
According to the Federal Reserve, JP
Morgan Chase, B of A, Citigroup and
Well s Fargo collectively held $8.5
trillion in assets as 2011 entered
the history books. That's equal to
56% of the US economy up from 43%
before the crisis hit. As Rahm
Emmanuel said, a good crisis is a
terrible thing to waste and the 1%
have come out of this one very well
off indeed.<br>
<br>
These five banks are about double
the size they were 10 years ago <a
moz-do-not-send="true"
href="http://www.businessweek.com/articles/2012-04-19/big-banks-now-even-too-bigger-to-fail">Bloomberg
Business Week </a>tells us and
some sections of the capitalist
class are concerned about five
financial institutions holding such
a concentration of society's assets.
These banks backed up by what BW
calls an <i>"an invisible
government umbrella"</i> pose a "<i>clear
and present danger to the US
economy"</i> a report from the
Dallas Federal Reserve stated last
month.<br>
<br>
<br>
The Dodd-Frank legislation was
supposed to curb the power of the
largest financial institutions,
prevent fiurther consolidation and
impose capital requirements on banks
as well as increase the government's
powers to take over any large
financial institution facing
failure. The banks are boasting that
the increase in assets and improved
balance sheets are proof that they
are stronger now and could weather
the next storm so public finds
won't have to rescue capitalism from
the edge of the abyss as we did this
time. In accordance with Dodd-Frank,
the banks are supposed to come up
with their plans for preventing a
meltdown like 2007 by July of this
year.<br>
<br>
But BW reports that the ratings
agencies are not convinced and that
the state will step in again with
poublic fiunds to rescue any one of
these behemoths that lookls like its
going under. The state is, as Marx
pointed out, the executive committee
for the capitalist class as a whole
and will not allow the system to
collapse. No ruling elite commits
class suicide.<br>
<br>
Some, including right wing workers
and small business types who suffer
under the weight of the giant
corporations argue that the only
solution is to break up the big
banks but capitalism inherently
drives to monopoly. Bigger is
better, more powerful, more
aggressive. The big fish always eats
the little fish in their world no
matter how much legislation is
passed. <br>
<br>
If the crisis is acute enough the
state will nationalize the banks.
They tend to use the term <i>"conservatorship"</i>
here in the US as it sounds less
socialistic. It is in the cards
that there will be further crisis in
this sector and the economy as a
whole. The US banking and financial
system is not immune from the EU's
sovereign debt crisis which
continues to worsen. But for some,
the crisis is a great opportunity
just like 911 was for the defense
industry.<br>
<br>
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<div class="post-footer">
<div class="post-footer-line
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class="post-author vcard">Posted
by <span class="fn"><a
moz-do-not-send="true"
title="author profile"
href="http://www.blogger.com/profile/00997976754939725087"
rel="author"
itemprop="author">Richard
Mellor </a></span></span><span
class="post-timestamp">at <a
moz-do-not-send="true"
class="timestamp-link"
title="permanent link"
href="http://weknowwhatsup.blogspot.com/2012/04/five-us-banks-hold-56-of-us-economy.html"
rel="bookmark" itemprop="url"><abbr
class="published"
title="2012-04-20T13:29:00-07:00"
itemprop="datePublished">1:29
PM</abbr></a> </span></div>
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