Labor Power
Sunday, May 18, 2014
For the People Owning the Too-Big-To-Fail Corporations
By Charlie Brown
It is important to point out that the Too-big-to-fail banks and corporations did in fact fail back in 2008; even though they were bailed out. The demand the Wall Street rulers made to Washington for a bailout was a confession that the whole financial system was insolvent. The USA's, We the People's, bailout brought
the finance system back from the dead. Capitalism does not add up.
After 500 years, it ends up that capitalism is bankrupt and insolvent by its own generally accepted accounting principles.
The shadowy finance ministers who ordered President Bush to bailout Wall Street, said that certain financial institutions are "too big to fail". If they fail they will destroy the
financial system, and so the federal government must save them in order to avoid total economic disaster for America and the world.
So, they were given trillions of dollars of what amounted to semi-gifts ( sort of "pay it back if you can at your own pace"; would that we could get such terms in loans from these same banks) , and the concept of "too-big-to-fail corporations" gained wide public awareness.
Although, there was not total collapse , the bank failures that did
occur triggered the so-called Great Recession. We, the 99%, suffered and suffer still enormously from that recession as it resulted in all around economic distress for tens of millions of Americans over the last six years. These failures of the leading private institutions of our Economy, led to an excruciating economic Depression for the Many. Large swathes of the middle and "lower" classes suffer poverty, foreclosure, unemployment, and the many ways of misery, premature deaths, disease, divorce, crime, etc, that are generated by economic downturn , especially in a jobless recovery only for corporate profits and exploitation by the 1%
It is objectively true that this would have been worse for the 99% if the Too-big-to-fails had not been bailed out. So, it is not the case that these corporations should not have been bailed out, but that their Creditor, The People, should get more for their bailout money than they did: ownership of the big debtors.
To reiterate,_circa_ 2008, with the insolvency of financial institutions designated Too-big-to-fails by our nation's highest financial ministers ( in other words straight from the horse's mouth), We, the People, learned of or were reminded of a category of economic life that had not been so explicit in the national discourse. These Big Banks were bailed out and avoided bankruptcy with guarantees or assurances of anywhere from $16 to 29 trillion by the United States of America, because the national unelected , financial ministers declared that their failure would bring down the entire financial industry of the US and perhaps "the West". In other words, the insolvency of the Too-Big-To-Fail corporations was in fact the insolvency of the whole financial system. It was a confession that capitalism doesn't add up; it fundamentally cannot meet its own standard of moral hazard. Wall Street's debts exceeded its assets by a dozen or two trillion dollars, at that historic moment.
Any debtor of Wall Street creditors who reaches such a moment , must not be bailed out because of the danger of moral hazard. If we apply Wall Street's own standard to itself, the 2008 bailout represents the biggest moral hazard in history, pretty much. So, the principle of moral hazard is dead.
General Motors and Chrysler, two of our largest corporations, though evidently an order of magnitude smaller than the Wall Street Too-big-to-fails, were also bailed because they arer too big to fail without devastating economic impact. . The bailed out Too-big-to-fails, owned and controlled and expropriated by the 1%, continue to live in fabulous luxury greater than any ruling class in history,
There is a long history of government bailout of corporations; History of U.S. Gov't Bailouts http://www.propublica.org/special/government-bailouts
http://en.wikipedia.org/wiki/Too_big_to_fail)
The Great Recession caused many states ,including, California and Illinois, actual insolvency , though it was not declared; and they were bailed out of deficits by the Obama Stimulus plan.
What is to be done now so many years from The Financial Big Bang ?
Well, like the Big Bang, it is still affecting us.
We, the People, who bailed out the Economy, must have ownership and control of all Too-big-to-fail corporations. Private owners , who put private interests above public interests always, cannot be trusted with control and distribution of the products of the Economy's Too-big-to-fail Economic Units, because their failure does not impact the incomes of the 1% current owners, but only the lives of the masses of people. The failure of Too-big-to-fails is dumped on the 99%, and avoided by the 1% who own them now. The 99% must own them, therefore.
We must reverse the current circumstance in which , essentially, the Too-big-to-fails own The People, as demonstrated by their ordering the Presidents and Congress to give them dozens of Trillions of dollars without their giving up ownership of themselves in exchange as would occur in any such transaction in the "free" market. The Too-big-to-fails still owe the People for the Bailout. We, The Creditors, are coming to Collect.
Enact a .law :requiring the Federal Reserve to report and list quarterly on all too-big-to-fail corporations, and initiate proceedings to take them over. Use the same criterion as was used in the bailouts.
Enact a Law: One of the rationales for exploiting interests from debtors, recipients of loans, is that the creditor puts its money at risk. Since, the Too-Big-to-Fails will be bailed by the government if too many of their loans fail, their interest rates should be abated or negated, because they are not taking the risk they claim.
Reassert federal ownership of General Motors and Chrysler. Chrysler has been bailed out twice by the federal government.
Take Federal ownership of JP Morgan, Citibank, Wells Fargo, Goldman Sachs, AIG and all Wall Street, Too-big-to-fails. before they fail again.
Which side are you on in the struggle between the 99% and the 1% ?
Which Side Are You On Florence Reece Original
https://www.youtube.com/watch?v=Nzudto-FA5Y&feature=kp
http://peoplesworld.org/today-in-labor-history-remembering-florence-reece/
"Florence Reece (née Patton; born April 12, 1900, died August 3, 1986) was an American social activist, poet, and folksong writer. Born in Sharps Chapel, Tennessee, the daughter and wife of coal miners, she is best known for the song, "Which Side Are You On?" which, according to folklorist Alan Lomax who collected it from her in 1937, she wrote at age 12 when her father was out on strike. In 1931, during the Harlan County War strike by the United Mine Workers of America and the National Miners Union in which her husband, Sam Reece, was an organizer.[1] She wrote it out on a calendar, possibly updating it, and that's the version known today. Pete Seeger, collecting labor union songs, learned "Which Side Are You On" in 1940. The following year, it was recorded by the Almanac Singers in a version that gained a wide audience. More recently, Billy Bragg, Dropkick Murphys, Natalie Merchant, and Ani DiFranco each recorded their own interpretations of the song, DiFranco's being a complete rewrite. Alan Lomax, writing in the American Folk Song Book (1968), says "Florence Reece, a shy, towheaded Kentucky miner's daughter, composed this song at the age of 12 when her father was out on strike. She sang it me standing in front of the primitive hearth of a log cabin in the backwoods of Kentucky in 1937 and it has since become a national union song. The tune is an American variant of the English Jack Munro, "which side are you on" having been substituted for "lay the lily-o"."[citation needed] Reece appeared in the Academy Award-winning documentary film, Harlan County, USA, singing her anthem to rally the striking miners. Florence and Sam Reece were married for 64 years, until his death from pneumoconiosis (black lung) in 1978. After a lifetime of speaking out on behalf of unions and social welfare issues, Florence Reece died of a heart attack in 1986 at the age of 86 in Knoxville, Tennessee.[2]" http://en.wikipedia.org/wiki/Florence_Reece
PETE SEEGER - Which Side Are You On? (lyrics included)
https://www.youtube.com/watch?v=msEYGql0drc