Bailing out the financial aristocracy
from David Ruccio
We’ve known all along about the TARP funds.* Now, thanks to Bloomberg, we know about the $1.2 trillion of public money, which is about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages, Fed Chairman Ben S. Bernanke showered on the Wall Street aristocracy.
The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress. . .
It wasn’t just American finance. Almost half of the Fed’s top 30 borrowers, measured by peak balances, were European firms. They included Edinburgh-based Royal Bank of Scotland Plc, which took $84.5 billion, the most of any non-U.S. lender, and Zurich-based UBS AG (UBSN), which got $77.2 billion. Germany’s Hypo Real Estate Holding AG borrowed $28.7 billion, an average of $21 million for each of its 1,366 employees.
There’s no doubt about the fact Bernanke was worried that, without TARP and the emergency loans, the whole system would come tumbling down. But, of course, they acted to save the banks and not the millions of homeowners who were—and remain—underwater or the millions of workers who were—and remain–unemployed.
To paraphrase that old German philosopher, the monetary authority of the modern state is but a committee for managing the common affairs of the whole bourgeoisie.
* But we don’t know what the banks did with the funds, since there were no strings attached.