Iceland’s economy was crushed by the failure of huge banks with heavy concentrations of on-line deposits at high interest rates from citizens of Britain and the Netherlands. Ireland’s banks failed too. Iceland responded by agreeing to guarantee the deposits of its citizens, but refusing to guarantee the deposits of foreigners. Ireland immediately guaranteed all deposits at its failed banks and promised that bonds held by investors in the banks would be paid in full. In both countries, unlike the US, the voters had a say in what happened next.
The President of Iceland refused to sign off on the guarantee of foreign deposits, forcing a referendum. The first deal cut by Iceland with the British and Dutch were rejected outright. It would have imposed huge burdens on the citizens of Iceland, amounting to about $65,000 per household.The second amounted to about $17,000 per household, but the numbers may not be comparable. The second deal was decisively rejected. The British and the Dutch, apparently unused to the idea of democracy, promised to sue. Good luck. Iceland also imposed currency controls, refusing to allow foreign deposits out of the country. That amounts to $4.1 billion, which may be counter-pressure for the suits.
There have been actual arrests, and there may be actual prosecutions in the collapse of at least one Iceland bank.
The Irish government imposed horrifying austerity measures, leading, as one would expect, to human misery and low growth. This led to the crushing defeat of the Irish government at the polls. At least there is an investigation into the banksters who caused the disaster, albeit slow.
Now look at the US. No prosecutions. No investigations. No votes. Nothing. Giant banks and the rich people who own and operate them are so firmly in charge here that Treasury Secretary Tim Geithner, then President of the New York Federal Reserve Bank, told the Attorney General of New York that aggressive prosecutions would wreck the financial system. The modest reforms of the Dodd-Frank financial regulation bill worry Ben Bernanke, the Chair of the Federal Reserve Bank. Jamie Dimon of JPMorgan Chase tells us that he and his friends won and it’s time to move on from all this ugly name-calling.
We had an election, and a big majority voted for change. We put “democrats” in charge of all three branches of government. All we got was this lousy tee-shirt, half-hearted financial regulation dominated by lobbyists for the failures who got us into the problem. The “change” administration and its wimpy prosecutors are not willing to hold anyone accountable. Apparently the careerists in the Justice Department are more concerned with future jobs and holding positions that give them a great resume than they are in actually doing something with those positions, like law enforcement.
It makes you weep with frustration. Electoral politics are a grotesque mockery. The news is dominated by public relations fairy tales. The bulk of the American people don’t understand why they have to pay, and no one is explaining it from a bully pulpit. It’s time to do something. Here are two suggestions.
1. Read my series explaining the steps to criminal prosecution of banksters for the sale of securities. This post contains links to the entire series. Then call your local district attorney and your state Attorney General and your state securities commissioner. Ask them why they haven’t prosecuted anyone for fraud in the sale of real estate mortgage-backed securities to the state pension fund. If you have a minute, you can look at the financial statements of those funds to see the kinds of losses they incurred from garbage securities. Here’s an example from Ohio. My e-mail is on this page. Let me know if I can help.
2. Find a demonstration, not one of those tie-dyed 60s reruns, but the new kind. Click on New Bottom Line. There are big and focused demonstrations at shareholders meetings for Citibank in New York, JPMorgan Chase in Columbus, Ohio, and Bank of America in Charlotte, NC. Look at this from the Wells Fargo Rally in San Francisco to get a flavor. Go. Participate. Make noise. Carry a sign demanding prosecutions. Make new friends, and do it again.
The frustration from sitting around and seething is bad for you. Walk it out.