“The U.S. went off the gold standard in August 1971. With no benchmark, central banks could print money and debase currencies. That opened the door for huge bailouts after big banks screwed up in a big way. Taxpayers—not incompetent bankers—paid the price.
By [the late 1980’s], the Federal Reserve Bank and large U.S. banks had established a pattern to control the public relations damage each time banks had a major screw-up: accountants and regulators let banks lie about the size of the problem to stall for time; the Federal Reserve blew smoke at the media; finally, the Fed would bail out the banks in a way that most taxpayers would not understand.
Banks didn’t have to get smarter or more competent. The Fed trained the banks that uninformed taxpayers would eat the losses, and fake accounting would let bank officers keep their positions and their money.”
If ‘rule under law’ were more than just a slogan in the United States, men who occupied the senior-most positions in too-big-to-fail banks would have been disgraced, prosecuted, and jailed. But no bank executive was held accountable.”
Janet Tavakoli
Courtesy of The Daily Bell, “Iceland vs Banksters” (8 April 2015):
“Forcing bankers to find honest work would be a huge step in the right direction. A remarkable number of Americans mistakenly equate Wall Street with capitalism. In fact, Wall Street as currently structured is a giant pyramid scheme. It would not exist under true capitalism.
“All modern banks would collapse if they lost the ability to create money. Iceland’s ‘Sovereign Money’ idea would prove this to everyone. The lesson would be a big step toward truly sovereign money.
“For this reason, the proposal isn’t likely to get very far. The fact that legislators are even entertaining it is a positive sign. They may disagree on the answer, but at least they’ve admitted the current structure is untenable. That’s progress and we ought to welcome it.”
(see https://tinyurl.com/muds3sz )