Editor’s note: This article was first published in December 2010, in the aftermath of the 2008 financial crisis and the bank bailouts; its prediction that banks would become the biggest real estate company on the planet within a few years dates from that time.
The banking deception: to what extent did the people running the financial system know that selling subprime would bring down the market? And if they did know, why did they carry on? Before the world went into recession, a 68-year-old man told me that the capitalists were coming up with a strategy to put the middle class in its place (poverty).
At that gathering a lot of people dismissed him as a “killjoy”, a communist, a madman and so on, but he wasn’t far off the mark. We have seen how the middle class and the poor let their guard down and took on debts they will never be able to pay.
It is said that lenders granted credit to people who had to meet one particular “requirement”: they were people who would fall behind on their payments or simply stop paying, taking on a lifelong debt with the lender. That way, instead of charging 8% interest, the lender could charge up to 30% for late payment, so the credit card or the personal loan would become a lifelong source of income for it.
This man also said that they want to fool us into believing that a bank has no interest in keeping your home, when the reality is that within a few years the banks will be the biggest real estate company on the planet, and sooner or later that turns into profits.
Not to mention that the banking sector works just like any other company, with one difference: they did something that, had any other company done it, would have put people in jail. But because it was the banks, they got a bailout from governments and it was as if nothing had happened.
The banks put the global economy at risk, and instead of being held to account and seeing “heads roll”, they go on making profits in the millions and getting support from governments. If “usury” weren’t a criminal term that can’t be applied to the banks, I would dare to use it; but since that isn’t allowed, we won’t say they are usurers.
On another note, many people who rent out flats know how hard it is to evict tenants who don’t pay when they have young children. Quite simply, social services won’t let you put them out on the street. Where are social services when the one doing the dispossessing is the bank?
This is how the banking system works, and this is what makes me ashamed of it. I’ll say it again: there are people in jail for far less than the business strategies of the banking system, where anything goes as long as a bank is doing it, and where, precisely when money is involved, there is a complete lack of humanity.
To sum up: the banks got rich in the good times and sold all kinds of financial products. And we take it for granted that if any old man knew about the crash that was coming, then, I imagine, I’d like to think, I deduce… the people running the banking system knew it too. They were aware that they would bring down the market, and that when that happened they would not lose out but end up much richer. So they have laughed at the whole world, and we have let them.
Further reading
- Investment funds: don’t let the bank take you for a ride
- Being turned down for a loan isn’t the end of your business
Featured image: The Truth About, CC BY-SA 2.0, via Wikimedia Commons.
