Living Free – An Attitude? Part II

In my last posting, I began a discussion about how greed and power worked in the human species. I chose the banking industry as an example and I led up to a basic layman’s concept of the banking business. Now, we’ll ramp things up a bit. Here is where the greed and power starts mucking things up.

The bankers realize that they basically are making money off OPM – “other people’s money.” How can they capitalize even more on that so they can make more? Being creative and talented (and we’ll talk about that more later), how about if they loan the depositors’ money back to the depositors at a higher rate then they are paying the depositors on their savings? How do they do that? They simply convince the depositors that they are better off buying things right now that they can’t afford by borrowing the money for mortgages, auto loans, credit cards, etc. so they can realize they’re dreams NOW – instant gratification. Don’t save your money until you can afford that house, that new car, that 60” LCD, flat screen TV and so on. It will take you a long time and you may never realize your dreams.

This is where the depositors’ greed kicks in. They want all these things now because they are told they can have them now. We live in the land of plenty. We have a right to have all these things, after all the Declaration of Independence says we have the right to life, liberty and happiness. Oops! I forgot a word – the “pursuit” of happiness – there is no right to happiness, just the right to pursue it. But, we think if we get that new house NOW that we can’t really afford, we’ll be happy. If we get that shiny new SUV or convertible NOW, we’ll be happy. If we get those new shoes or that nice silk shirt NOW, we’ll be happy. And, we have a job that we can use the money from to pay the monthly payments for these items – and the bankers will even tell you that you can do it. Get the “stuff” NOW and you’ll be happy.

Now, get this picture – the bankers are borrowing your money (your savings) and paying you 3% (if you’re lucky) and then they are loaning it back to you and charging you 6%, 9%, 12%, 18% and even more then 20%. Simple arithmetic shows that a depositor will never get ahead in the long run under this scenario.

But, the bankers want to make more money. After all, now we call stealing money and manipulating people . . . “talent.” And in order to attract the best “talent” in banking we have to pay huge salaries that are totally unrealistic – then sweeten the pot with huge bonuses in the six and seven figure range and, not to let the investors out of the picture, we’ll give stock options so these “talented” criminals – I’m sorry, I mean bankers, can purchase large blocks of stock in the bank at special preferred prices and dilute the equity and earnings of the original stockholders. But, that’s okay, because the original stockholders are convinced these “talented” bankers can come up with lots of new “creative” ways to fleece depositors and borrowers. Why . . . there is “float,” late fees, over limit fees, a fee that’s charged to merchants when you use your credit cards, default swaps, bundling mortgages that were bad when they made them and peddling them off to some other greedy investors believing they are buying quality investments, and so on.

This is why we are in an international economic crisis. And, let’s not only blame bankers, just replace the word banker with other industries. And this isn’t something that just happened over the last decade or so; it’s actually been going on since the beginning of civilization. And then every so often, the bankers (or whoever) get caught with their hands in the cookie jar and the house of cards collapses and it starts all over again.

But, remember when you point a finger at someone there are three fingers on your own hand pointing back at you. We are all in this together. There is no individual (including children, we teach them young) who are not implicated. It is unimaginable that Bernie Madoff could have operated his scheme, essentially, undetected for as long as he did, if it wasn’t for the greed factor. There is an old saying, “If it looks to good to be true, it virtually always is.” Even the U.S. Treasury was recently scammed by a Nigerian e-mail money scam. They fortunately nipped it before the taxpayers were fleeced even more, but there it is again.

Living free can never happen when an individual or a family is totally beholding to someone else. That’s what has happened to our country. Our government with a taxation system that is nothing more then an illegal shell game has scammed us. It is so complex that virtually no one, including the government, can tell us how much we are actually paying in taxes. We are prisoners to jobs that we HAVE TO HAVE to just keep a roof over our heads, food on the table, clothes on our backs and basic transportation – BUT, we have to have cable TV and high speed Internet and cell phones, etc., too. Pretty soon, we are not free. We are imprisoned by our own greed. There is a satire on the little ditty sung by the Seven Dwarfs of Snow White fame. It goes like this, “I owe, I owe, so it’s off to work I go.” That’s not very funny. Well, this is long enough for this posting. In the next posting, we’ll see where this goes to next.

Enthusiastically,
Ed