The Bank Bailout Scam

Thomas H. Greco, Jr.

What can you expect when a fox is appointed to manage the hen house? Our current Treasury secretary, Henry Paulson, was formerly the CEO of Goldman Sachs, one of the most powerful financial institutions in the world. His appointment to that post was clearly intended to enable a continuation of the long trend of greater concentration of power and wealth in elite hands.

Recent moves by the U.S. Treasury make that ever more obvious. In an article in Saturday's (Oct. 25) New York Times, Times economic columnist, Joe Nocera, reveals what he calls "the dirty little secret of the banking industry"--namely, that "it has no intention of using the [government bailout] money to make new loans."

Nocera explains that the Paulson plan to hand over $250 billion [in money borrowed into existence by the government] to the biggest banks, in exchange for non-voting stock, was never really intended to get them to resume lending to businesses and consumers, as was stated. That was just window dressing. The real purpose of the bailout is to engineer a rapid consolidation of the banking industry by enabling at public expense a wave of takeovers of smaller financial firms by the most powerful privileged banks. Examples, so far:

JPMorgan's recent government-backed acquisition of two large competitors, Bear Stearns and Washington Mutual; the takeover of Merrill Lynch by Bank of America, Wachovia by Wells Fargo and, National City by PNC.

There's more to come, and by deciding which banks get handouts and which don't the entire consolidation process is being orchestrated from the top.

Thomas H. Greco, Jr.

(extract from an email, October 28-29, 2008)