Usury, tax evasion, golden parachutes -- bankers go scot free
Bankers steal from the public until the government stops them
| Political parties are too close to corporations and regulators lack teeth to curb banks. We trim two 2008 articles and append some American history. (1) From Truthdig, posted on AlterNet (Jan 23) “Who Will Stop the Banks?” by Robert Scheer, co-author of The Five Biggest Lies Bush Told Us About Iraq. (2) From the UK’s Guardian’s web version (Feb 15), “Holding back the banks” by Prem Sikka, professor at the University of Essex. |
by Jeffery J. Smith
February, 2008
Scheer: Democrats lamely attempted to deal with the dire consequences of the banking meltdown without confronting the banks. Bankers are crooks who will steal from the public unless the government holds them accountable.
Kucinich would have said that. When he was mayor of Cleveland, the banks foreclosed on his city after he refused to sell the public power plant. He was forced out of office, but thanks to the public power alternative he refused to sacrifice, Cleveland had cheap power, and he was elected to the Ohio Legislature and then to Congress.
It is stupid to argue about whether the Democrats or Republicans would spend more on needed domestic programs, because the money for those programs will not be available. Kucinich was willing to do what Rep. Ron Paul has in the Republican debates -- challenge the phony patriotism of war-fighting expenditures, leaving us less secure.
Both political parties have refused to place any serious restraints on the interest charged by banks. Ezekiel 22:12 of the King James Bible: " ... Thou hast taken usury and increase, and thou hast greedily gained of thy neighbours by extortion, and hast forgotten me, saith the Lord God.”
Not being overly familiar with Scripture, I am grateful to Kucinich, a product of a stern Catholic upbringing, for having informed me, more than a quarter of a century ago, that the bankers, and the politicians who service them, are courting the wrath of God -- even if they fool the voters.
Sikka: Despite the sub-prime crisis, possibly a recession, and the depreciation of people's savings, pensions, and investments, banks are set to make record profits and their executives will be collecting bumper salaries and bonuses.
Banks indulge in insider trading, exploit charity laws, and have sold suspect payment protection insurance policies. As usual, their annual financial reports are opaque to their antisocial practices.
In 2003, the US Senate Permanent Subcommittee on Investigations concluded (pdf) that the development and sale of potentially abusive and illegal tax shelters have become a lucrative business for accounting firms, banks, investment advisory firms and law firms. Banks use clever avoidance schemes, transfer pricing schemes, and offshore (pdf) entities, not only to avoid their own taxes but also to help their rich clients do the same.
Enron used complex corporate structures and transactions to avoid taxes in the US and other countries. Some of the complex schemes were devised by Bankers Trust, Chase Manhattan and Deutsche Bank; loans were provided by the Salomon Smith Barney unit of Citigroup and JP Morgan Chase & Co. This year, JP Morgan hired Tony Blair of zero banking experience but GB’s ex-prime minister.
A US Senate committee found major banks, such as Deutsche Bank, HVB, UBS, and NatWest, loaned billions of dollars essential to the orchestrated transactions which the banks knew were tax motivated, involved little or no credit risk, and facilitated potentially abusive or illegal tax shelters.
Deutsche Bank has been the subject of a US criminal investigation and in 2007 it reached an out-of-court settlement with several wealthy investors, who had been sold aggressive US tax shelters. Last year Deutsche Bank won an award for best service in Jersey, Guernsey, and Cayman Islands. These islands don't even require banks to publish basic accounts.
Without a thorough investigation of the banking industry, there is no chance of curbing any of its antisocial practices. This could be a popular public policy. However, major political parties are too close to the corporations dominating the financial sector and weak regulators lack the backbone necessary to tackle predatory practices.
“I believe that [private cartel] banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency… the banks will deprive the people of all property until their children wake up homeless on the continent their fathers conquered… The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of [private] lending institutions and moneyed incorporations.” -- President Thomas Jefferson (3rd president on predatory monopolist power - 1743-1826)
“The inability of the colonists to get the power to issue their own money, permanently, out of the hands of George III and the international [cartel] bankers was the prime reason for the revolutionary war.” -- Benjamin Franklin (American founder on the chief enemy of American Independence. 1706-1790)
JJS: Could banks keep their power if people instead saved with credit unions and issued new money via community clearing houses? For more info, google ethical expert Tom Greco.
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Jeffery J. Smith runs the Forum on Geonomics.
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Also see: Part III, The Trouble With Money and its Cure
IMF and Other Bailouts are Welfare for the Rich
Reinventing Money, Restoring the Earth, Reweaving the Web of Life |
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