[Peace-discuss] Big Five Banks vs US economy (or vs other measures)

Sat Apr 21 01:43:39 UTC 2012

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.

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.

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 
http://en.wikipedia.org/wiki/Wealth_in_the_United_States, and through 
it, http://www2.ucsc.edu/whorulesamerica/power/wealth.html and 
http://www.levyinstitute.org/pubs/wp_589.pdf (~:)).
<http://www2.ucsc.edu/whorulesamerica/power/wealth.html>

 > If the crisis is acute enough the state will nationalize the banks.

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.)

On 4/20/12 7:32 PM, David Johnson wrote:
>
>
>     Friday, April 20, 2012
>
>
>       Five US banks hold 56% of the US economy
>
> <http://4.bp.blogspot.com/-iiWMTQmePd8/T5HGfDpJw8I/AAAAAAAACoY/vfmaH6aOS4s/s1600/pol_banks17_inline4051.jpg>
> Public money sure helped the /"Big Five" /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.
>
> These five banks are about double the size they were 10 years ago 
> Bloomberg Business Week 
> <http://www.businessweek.com/articles/2012-04-19/big-banks-now-even-too-bigger-to-fail>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 /"an invisible 
> government umbrella"/ pose a "/clear and present danger to the US 
> economy"/ a report from the Dallas Federal Reserve stated last month.
>
>
> 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.
>
> 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.
>
> 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.
>
> If the crisis is acute enough the state will nationalize the banks.  
> They tend to use the term /"conservatorship"/ 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.
>
> Posted by Richard Mellor 
> <http://www.blogger.com/profile/00997976754939725087>at 1:29 PM 
> <http://weknowwhatsup.blogspot.com/2012/04/five-us-banks-hold-56-of-us-economy.html> 
>
>
>
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