Well, we saw this coming. Repeatedly we have reported on the growing anger the American people feel toward the banking system represented by the big banks. Many executives in high places are discussing the ramifications of millions of Americans simply walking away from the banking system of the giant banks. Private lending may be the future of finance in America because of this anger at banks.
"The bankers are making it even tougher,"Rep. Steve Cohen, D-Tenn., said referring to executive bonuses of bankers. "They are pigs at the trough."
Consider the many reasons for the anger toward big banks, they are numerous:
1. Bankers promoted variable rate mortgage loans by the thousands to people who could not qualify for repayment, thus setting the stage for the financial fiasco when rates began to rise.
2. Bankers lobbied for years for “Deregulation” (and continue to do so) so they could mix traditional financial banking services with broader services (such as dealings on Wall Street, and issuance of less than credible paper that would eventually lead to billions in defaults).
Bankers got their deregulation, and like children with no rules, they went amok.
3. Bankers took and continue to take, Federal Money, taxpayer money, when they got in liquidity problems, and yet, closed the faucets on lending when the American people needed it. Instead of using federal taxpayer money to lend to the American people and help the economy, they held it, and invested it in even more “commercial paper”. In the meantime, banks have made “underwriting criteria” so difficult than an average American simply can’t qualify for a loan of any kind. The bankers are making hundreds of millions on investments, while the American economy is starving for credit.
4. Bankers arrogantly gave, and some continue to give themselves huge bonus payments, vacations, fringe benefits while 10% of Americans went unemployed.
5. Bankers have raised credit card interest rates to 29% on millions of customers. This alone is enough to bring out the anger of the American people. The problem is, that the banks don't seem to care, and continue to raise rates and create more "hoops" for customers to jump through.
So it is no wonder that the Obama Administration is taking steps to punish bankers, or at least make them accountable. His announcement Thursday for taxing about 50 big banks and major financial institutions for at least the next decade to recoup all taxpayer losses from the bailout of Wall Street, is logical, and perfectly deserved by the big banks.
The tax on banks...