I was watching RT News today and they mentioned a couple of key things:
1. The Koch Brothers pulled out their billions out of MF Global in early October after a decades long relationship. While the average investor had their funds frozen to maintain banking liquidity, the Koch brothers were provided special provisions to pull out their funds in order to maintain a respect born out of a long term investor-bank relationship. Meanwhile, bankers are continuing to collect bonuses.
2. Richard Branson was allowed to buy the “good part” of Northern Rock for half the initial value that the average shareholders had put in. The bank is to be split into 2 parts - the good part where assets are less risky and the bad part where assets worth approximately 21 billion euros are very risky and are almost a 100% procured using the average shareholder’s pooled money. This part of the bank has been speculated to default.
There have been a few articles on Huffington Post by enraged market analysts. Information that is supposedly transparent is made utilitarian for the wealthy. Meanwhile this widely available information seems to be available for the average investor for window shopping purposes. It seems we are entering an era where the oligarchs’ supposedly dystopian system has finally enraged people and the so called middle class with peasant like privileges is ready to revolt. The “Occupy Wall St” rally is a testament to that.
No plan is easy because there are several factors at play: voter confidence, systemic stability, policy integrity, party consensus etc. Socialism is certainly not the answer. These wall street criminals enjoy a less severe form of punishment because their crimes are not laced with intent, malice or obvious suffering.
We need to institute new rules (I know some of these rules are too idealistic and may never find a way for implementation, but maybe purely venting them maybe the initial step to bring an impossible plan into fruition)
1. Cap Bonuses permanently
2. Shareholders need to get their money back first. I understand that a balance needs to be maintained in systemic liquidity and printing more money cannot be the solution. Otherwise we would be perpetuating a Ponzi scheme.
3. All capital injections need to find themselves back into the hands of the public i.e. they have to be used to create credit and maintain liquidity rather than for self investment/ creating more complex products
Let’s not forget that the problem lies not only with the creator, but with the perpetuator as well. The sub prime crisis is a testament to that. We can blame banks all we want, but the average citizen has to bear the burden of some of the blame. Just because an option is available, doesnt mean you avail it. Qualify yourself before you decide to get qualified externally.
I guess, in the end, we have to figure where does the status quo lie - who bears what portion of the burden? The wealthy have worked for their money and feel entitled; all the citizens do not have to be penalized for the actions of a few and the main street needs to find a policy that engages all strata of society. Lets create a meritocracy that evaluates people on how much they have worked for their wealth and reward them accordingly. This way, if you have truly worked for it, you deserve it. One thing is for certain - the bankers will get screwed in the process.