Mega-rich bankers are squeezing the world

Text from the back page of Bad Banks leaflet #1.

The cartoon (above) shows a “fat cat” sitting on people. It’s a comical image. Unfortunately it shows a sad truth. Around the world today this is what’s happening to grassroots people like us.

The fallout from the global economic crisis is leading to millions losing their jobs. In the US, the world’s biggest economy, 1 in 6 workers are out of work. 50% of homeowners risk losing their homes.

As economies slump governments are cutting spending on health, education and other services, making things worse for grassroots people.

But while this is going on, trillions of dollars have been raised to bailout banks and other financial institutions, the very ones behind the meltdown.

Big banks, like the US based Goldman Sachs, exert enormous influence over markets. They helped inflate the global “housing bubble”.

Grassroots people all over the world got caught up in the house price spike, forced to take out big loans to buy a home. The banks, media and politicians told us it was OK. House prices, they said, would continue to rise and we’d all be better off.

This was a lie, one the banks, media and politicians were happy to peddle because all this borrowing was making a few people super-rich.

But it couldn’t last, the wages of ordinary people weren’t going up in line with house prices. It all came unstuck in 2007 when house prices in the US and elsewhere fell and indebted homeowners began defaulting on their mortgages. This caught out most of the world’s banks who all had a finger in the “housing bubble” pie.

With trillions of dollars of “bad debt” on their books the banks stopped lending. Because so much of today’s economy is founded on borrowing (by governments, business and ordinary people) to have credit freeze up was a nightmare scenario for the Kings of Capital.

To keep the profits flowing governments wrote blank cheques for the banks. A recent report calculated that the bailout figure for the US alone is expected to climb to $23.7 trillion!

The global economy, however, is still nose-diving, leading to a pandemic of job losses.

Yet out of this social misery many of the big banks are returning to profitability. Goldman Sachs is posting record profits. These mega-rich bankers are set on dominating like never before the creation of credit. They’re lending to cash-strapped governments at high interest rates. They’re speculating again in financial markets. It’s “win-win” for them and “lose-lose” for us.

A system that can divert trillions of dollars to a mega-rich minority and let the majority fend for themselves is an unjust one. The fat cats are sitting on top of us. And that has to be changed. The Bad Banks campaign is where it starts.