Who Will Bail-Out Banks After The Next Crash? Their Depositors

Capitalism is an unstable system, evident by the economic down-turns that happen every four to seven years.  Most Americans are still recovering from the last economic recession in 2008-09.  Meanwhile, the next crash is right around the corner.  JPMorgan’s own internal documents have the company predicting the next crash will happen in 2020.  Certainly, anyone paying attention can see the signs that the crash is already in progress.  The U.S. federal government started by giving unknown banks $75 billion per day, which has grown to $100 billion a day, because the banks are coming up short on cash – every – single – day.

The crash is happening right now and the government is already bailing banks out; however only to the extent that they get Mr. Trump re-elected.  Once the 2020 election is over, whether Trump wins or another candidate, the economy will go into free-fall, as the government will stop funneling money into these failing banks and the banks will need to find a new way to reimburse their losses.  In a true “free-market economy” as these Capitalists claim to aspire for, the investors of these banks would themselves have to pool the money to cover their own losses, but they don’t want to do that.  So they have another idea on how to get bailed out: not from the taxpayer, but directly from their depositors.

New laws were implemented in 2014 to help governments deal with failing banks, allowing for, what is called, a “bail-in.”  What this means is that the bank can take funds directly from their depositors to make up for their own losses.  They have no obligation to ever pay this money back to their depositors.  The U.S. government does still claim to insure amounts up to $250,000 in a bank account, but after the next crash, they may not have the resources to keep that promise, allowing the banks to take what they please.

This is, of course, not without precedent.  After the 2008 mortgage crisis, 5.2 million families lost their homes, taken by the banks and then resold by the banks; the banks got paid twice for the same house, while regular people were kicked to the curb.  The banks paid Obama very well to protect them from the wrath of their victims.  In preparation for the next crash, the finance industry is again paying Trump and corporate Democrats, like Joe Biden, Pete Buttigieg, Kamala Harris, and Cory Booker, to ensure whoever is elected will be on their side after the crash.  Obama received $1.2 million from the financial sector for his 2008 campaign; below are the top recipients of the financial sector for the 2020 election.

The fact that these laws were passed is proof that this is their plan after the next crash.  I’m trying to warn people about this because this will affect anyone with money in a bank account, which is all of us.  Cyprus has already implemented these policies of austerity in the face of financial crisis, allowing banks to steal money directly from their depositors.  This is yet another example of how the fear-mongering Capitalists do of Socialism ‘stealing what you’ve earned,’ is actually true of what Capitalism does.  Aside from stealing the output of their workers’ labor to make a profit, they then fine, tax, and steal from working people to reimburse their own financial failures.

If there is any lesson of emphasis to take from this warning, it is that it does not matter who is in office after the next economic crash; whether the President is a Republican or a Democrat, the only thing that matters is how much money they took from the financial industry, because that is a direct reflection of who they will serve.  Trump and the Democrats I listed are obvious puppets of the banks, but even Elizabeth Warren, who spouts vague progressive rhetoric in the primary campaign, vows to take corporate money in the general election.  But as Bernie Sanders says, “You can’t change a corrupt system by taking its money.”  You may have noticed the corporate media covers Warren favorably while they still smear Bernie; it’s because they know Warren isn’t a real threat to the corporate establishment and Bernie is.  While I’m certain the DNC will once again cheat him out of being the Democratic nominee, he is the only candidate who is unpaid by and will have the guts to stand up to the banks in the face of their crimes against humanity and a crash with the potential to be more severe than the Great Depression.

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Venezuela: A Lesson for the United States

CARACAS, VENEZUELA (Photo by Carlos Becerra/Anadolu Agency/Getty Images)

If you talk to a conservative about Socialism, they’re favorite strawman is to bring up the economic crisis in Venezuela and suggest that any amount of Socialism will plummet our economy into the same over-inflated mess.  But there is actually a way that the United States could face the same consequences being felt in Venezuela, and one of those ways is to stay on the same course we are currently on.

The reason Venezuela is having an economic crisis has nothing to do with the “ist” or “ism” attached to their economic model; it has to do with the fact that 96% of Venezuela’s exports and 40% of their GDP is petrol.  For a decades, Venezuela was one of the wealthiest countries in the region due to their massive reserves of petrol.  When the price of petrol drops, Venezuela’s economy will undoubtedly suffer.  Conservatives claim that if we adopt policies in America meant to serve the people, we will end up like Venezuela, but to compare their economy to the United State’s economy is where they will make their first mistake, because America’s economy is not reliant upon the price of petrol.

Their second mistake is to suggest that Venezuela is Socialist or Communist; 500 different U.S. corporations operate within Venezuela, so by definition, they are Capitalist.  Differentiating their petrol companies from American oil companies because they are “state-owned” is metaphorically slicing hairs.  In 2015 alone, the United States subsidized fossil fuels for a total of $600 billion.  Re-read that fact again a couple times and then tell me American fossil fuel companies are not “state-owned.”  America’s government is no less invested in its fossil fuel companies than Venezuela’s government is invested in theirs.

The reason that Venezuela has strong social protections is because they have five branches of government, as opposed to our three, one of which is the Citizen’s Branch; meaning that the people have more of a voice in which legislation is passed.  The consequence being that the state subsidizes products for their poorest citizens and takes a net loss, because they feel it’s worth it to take care of their most vulnerable citizens.  Of course, with that ideology (which comes from an inherently good place), comes more subsequent problems, such a black market for government-sold items, which become increasingly rare for those who need them.  But it should be emphasized, that this net loss suffered by the state has nothing to do with the current economic turmoil, which, again, has everything to do with the price of petrol dropping.

If conservatives were at all interested in understanding why the price of petrol is dropping, they might actually come closer to understanding the real reason why Venezuela’s economy is in crisis.  To do that, is to look at our own foreign and economic policies, in tandem to Saudi Arabia’s.  The main goal for Saudi Arabia is to create a global monopoly on oil by first destroying the markets of their main competitor’s, Russia and Iran.  Their strategy for doing so is to over-produce oil, so that the market is saturated and the price drops; their goal being that this price drop will hurt Russia and Iran.  At this point, the only countries that have actually been hurt by this change are those which rely on petrol for economic growth, such as Libya, Angola, Nigeria, and Venezuela.

So what is the real lesson the United States can learn from Venezuela, since we know the lesson is not that policies designed to help the poor will destroy our country.  To do that, we need to understand the other reason why the price of fossil fuels is dropping: The price of oil, as with any other commodity, is regulated through supply and demand. When there is an oil surplus, or a reduction in demand, the price will fall.  Saudi Arabia’s actions demonstrate what happens in an oil surplus, but what happens when there is a reduction of demand are very similar and the brunt impact of that could be faced by the United States.  This is what is called the “Carbon Bubble.”  (Hint: the word “Bubble” should be an indicator that it has potential to pop and cause havoc.)  Currently, China is leading the world in investments into renewable energy.  This trend will only increase around the world, as manufacturing renewable technology becomes cheaper than digging dinosaurs out of the ground.  Maybe now is a good time to revisit that number of $600 billion the United States taxpayers paid in 2015 to subsidize the fossil fuel industry.

We are investing billions of dollars of taxpayer money to subsidize pipelines sprawling across our country; trillions to secure global oil reserves for American corporations – what happens if we never see a return on that investment, because in 20 years the price of oil has halved because of China’s booming renewable industry.  The United States could be on the forefront of that new manufacturing industry, instead we are stuck in the past, digging in the dirt; trying to force everyone to watch VHS instead of leading the switch to DVD, or digital.  Right now there is a profit in ignoring the growing renewable market, but once that profit disappears, so will the investors, and so will a large portion of our economy.  Venezuela’s mistake was assuming petrol prices would remain high and our current mistake is the assumption that the price of fossil fuels will remain high.  With our current course of action, it is inevitable that the global demand of fossil fuels will continue to reduce until the Carbon Bubble pops, at which point, it will be far more accurate to compare the United States to Venezuela.