So the burger flipper at McDonald's chooses to give the wealth of his labor to investors? The worker at McDonald's chooses to work for the wage he is given. If he doesn't like it, he has other choices. Did you know I worked at McDonald's when I was young? I quickly realized that I hated it and decided I would do everything in my power to not make that kind of work a permanent career. So I studied and I studied harder than everyone around me until I eventually ended up with two Master's degrees. That education paid off. It was hard as hell and I went into massive debt to get it done, but I did it. I started my first job with a massively negative net worth. But I overcame and I'm proud to report that now not only do I not work at McDonald's, but I also don't ever eat at McDonald's. That worker had choices to make and he made them. If you don't like the wage, then do something about it, but don't ask our government to steal from others so you can live above your means as a worker at McDonald's. The thing you are missing is that his labor simply is NOT WORTH much, because he's not very educated. He's done nothing to make himself more valuable. If he did, like I did, then he would be worth more to people and they would be willing to pay him a larger wage, as they did with me. Money has to be earned, not given to people.
Your bank analogy is also flawed. If banks received only money from deposits you might have a case, though flimsy. The bank also has investment income from the stock market (taking money from workers without their consent). Those banks have far less money to give you a loan since they didn't make any investment income over the past 3 1/2 months. They also get money from credit cards etc. so again, they don't depend on one source of income as you suggest. But it's much worse. Many banks like JPMorgan report falling income from loans (down over $300 million in the last quarter). Their investment income was also down $4.4 billion and this was before the recent market crash. Where are they going to get their money to loan you? I have no idea. Not quite, although there is some truth in your statement. My banking description is true in Capitalism, when it is working well. But as I've said, we do not really have Capitalism in the US. Banking in the US has been completely deformed and has become a monster, primarily because of the Federal Reserve, but also because of Congress irresponsible actions such as repealing Glass-Steagel, and our regulatory bodies being underfunded and falling behind the times, as well as being intellectually unable to keep up with the big banks and financial fire power and brain power. Do you think graduates from Harvard, MIT, etc. go into government first or to Wall Street first to make their millions, then do the revolving door back and forth between the SEC, the Treasury, the Fed, and Wall Street? The whole industry is so darned corrupt, it stinks to high heaven. Systemic fraud and white collar crime has become a way of doing business with getting caught simply a part of the financial model for these big banks. No executive goes to jail anymore, so they have no incentive to reign in the fraud, because they take big risks with other people's money and get bailed out by the government when they fail, and they themselves get to keep their ill-gotten gains, because the slap on the wrist payments to their buddies at the SEC are small to begin with, but shareholders have to pay the tab anyway. The whole banking sector in Wall Street is corrupt from top to bottom. JPM, GS, Wells Fargo, etc....they are all corrupt.
As for where do these banks get their money? Here's one form of Socialism for the Big Banks. The Fed keeps rates very low, which they then loan the big banks, instructing them to buy Treasuries and MBS. The big banks make money on the higher rates of return on Treasuries and MBS over the cost of the loan from the Fed, which has been minimal. The money from the Fed is created out of thin air and the big banks were recapitalized using this method of Quantitative Easing. They even used a name for it, QE, that obscures the facts of what they are doing. So was this a free benefit to the American people and did we need the Fed to be our saviors? No, absolutely not. The profit to those big banks came at the cost of adding massive liquidity to the markets from money printing out of thin air, which drove up the prices of EVERYTHING, not just assets like investments in stocks and bonds. Purchasing power has come down, as prices on subsistence goods like food, transportation, housing, and healthcare have continued to sky rocket. These Fed and banking policies have enriched the 1% at the expense of the 99%, so egregiously and so opaquely, that it is infuriating to anyone who truly understands what is going on. Socialism, cronyism, and central planning, as well as the financialization of our economy by the big banks literally BUYING our Congress and corrupting the regulatory bodies, has destroyed and deformed our natural banking functions, which when functioning without corruption perform critical functions for Capitalism. So once again, it is not Capitalism at fault, but Socialism, Cronyism, and Communist-style Central Planning via the Fed that has destroyed a Capitalist function and turned our biggest banks into criminal enterprises that engage in predatory business practices and are run like hedge funds with mafiosa style executives. It is a breathtaking and disgusting thing to behold. If you ever want to know too much, the guy that explains it best is Michael Lewis. |
