Are The Banks The New Big Brother?

Steve Dibert

I have been rereading Frank Herbert’s science fiction masterpiece, Children of Dune and I came across this interesting passage from the Bene Gesserit Sisterhood:

“Governments, if they endure, always tend increasingly toward aristocratic forms. No government in history has been known to evade the pattern. And as the aristocracy develops, government tends more and more to act exclusively in the interests of the ruling class – whether that class be hereditary royalty, oligarchs of financial empires, or entrenched bureaucracy.”

For obvious reasons this quote stuck out like Rush Limbaugh at an NAACP meeting and I began to wonder are we, the American people at the mercy of the new financial aristocracy that apparently runs the land of the free and home of the brave?  Where are we going now that we know “Too big to fail” was actually a secret code for “Too big to control”?

The oligarchs that run these financial empires not only exploited the dysfunctional partisanship in Washington but played the American people to pure Machiavellian artistry.

At the beginning no one cared because everyone was making money.  Then while everyone was basking in and distracted by their financial hedonism, Banking Executives got sloppy, became greedy, made some really dumb decisions and made promises they knew they couldn’t keep especially to other banks and foreign governments in order to keep the keep their pockets stuffed with the Benjamins.  They forgot what Uncle Ben Parker once told young Peter Parker after he was bitten by the radioactive spider, “With great power comes great responsibility.”

These banks used their power to create and to enrich themselves with a multi-trillion dollar Ponzi scheme that made Bernie Madoff’s Ponzi scheme look like a kindergarten production of the movie Wall Street.

So when this pyramid scheme…oh, we can’t call it that. Pyramid schemes are illegal.  We’ll call it a Trapezoid Scheme since there is more than one group at the top and Trapezoid Schemes as far as I know are not illegal.   So when this Trapezoid scheme finally began to fall, the U.S. Government was forced to step in and bail these banks out.

Many critics of TARP have griped that the government had no business bailing out these banks based on the theory that in violated the spirit of free enterprise and that social Darwinism dictated someone would come along and pick up the pieces. In the end no matter how long it took everything would be right in the world of free enterprise.  The same people who opposed TARP also supported “Too Big to Control”.

What these critics of TARP fail to realize are several major issues.   The first is, the FDIC did not have enough cash on hand to cover the projected losses of these banks nor did they have the manpower to oversee a FDIC takeover of these banks.  Second, both Treasury and the Federal Reserve were concerned about bank runs and the possibility of a cascade effect to smaller regional and community banks that rely on the five major banks.  Third, there were the geo-political realities of international banking to consider.  Many foreign governments had funds tied to the major U.S. banks.  Many of those like Russia, India, and Pakistan have nuclear weapons.  What would happen if Islamic fundamentalists took control of the government in Pakistan?

Even now, with a different political party in control of congress and the nation being in the worst economic crisis since the Great Depression, the Banking Lobby is still writing legislation and still dictating banking policy in this country.   All this shows how entrenched they have become in the fabric of our lives.  It’s not Big Government we need to fear turning into Big Brother, it’s the Banks.

This article originally appeared on www.bankinghorrorstories.com

Steve Dibert is currently the owner of MFI-Miami, LLC.  A mortgage fraud investigation company that specializes in investigating compliance and mortgage backed securities related issues.

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