Interest rates–just another club wielded by the rich
Cross Post from iflizwerequeen.com
The way it works in our world is that the rich (and greedy Wall Street banksters and financial wheeler dealers in particular) make the poor who can least afford it pay the most for the money they borrow.
And why can they? One of the reasons is that they have brought their own “evaluation” team with them to judge what they call the “credit worthiness” of others. Convenient isn’t it? But this is only one of the many ways that Wall Street and the rich have loaded the deck against the majority of us.
They justify what amounts to their theft from the poor by working in concert with one of Wall Streets Big Three credit rating agencies–Standard & Poor’s, Moody’s Investor Service and Fitch Ratings. One of the many problems with these credit rating agencies (CRAs) is their close ties to the SEC and their Wall Street corporations.
The problem is one of collusion (as is often the problem when the rich make their backroom deals with other rich). This particular “you scratch my back and I’ll scratch yours” routine works this way: companies pay credit rating companies like Standard & Poor’s to rate their debt issues. As a result, many critics have rightly contended that Standard & Poor’s and other CRAs are beholden to these issuers and that their ratings are not as objective as they should be. Of course they are not! DUH.
We have been building up to today’s crisis over the past 40 years and helped greatly along with the leadership of BOTH parties embrace of Milton Friedman’s harsh economic ideology for the rich. That is key to remember when arguing that one party is better than the other. BOTH parties embrace the same broken conservative economic ideology and that is why it really does not make much of a damn which party is in office.
Karl Marx predicted what we are seeing today. According to Marx, capitalism will inevitably lead to ruin in accordance with certain laws of economic movement. These laws are the “Law of the Tendency of the Rate of Profit to Fall”, the “Law of Increasing Poverty”, and the “Law of Centralization of Capital.” Small capitalists go bankrupt, and their production means are absorbed by large capitalists. During the process of bankruptcy and absorption, capital is gradually centralized by a few large capitalists, and the entire middle class declines. Thus, two major classes, a small minority of large capitalists, and a large proletarian majority are formed. [SOURCE WIKI]
Two Examples of their Bias in Action:
#1 Standard & Poor’s and other CRAs assigned top ratings of AAA to the collateralized debt obligation(CDO) market. Investors, (many of them Mutual funds handling pensions of ordinary Americans) trusting the low risk profile that AAA implies, loaded up on these CDOs that later became unsellable. Those that could be sold often took staggering losses. For instance, losses on $340.7 million worth of CDOs issued by Credit Suisse Group added up to about $125 million, despite being rated AAA by Standard & Poor’s. [Ironic, isn’t it that “poor” is part of their Corporate moniker.]
#2 We see it today in the way that the banksters, IMF and wealthy countries are acting toward poorer nations. No finer example than Greece. Bloomberg reported today that “Spain, Greece and Italy faced higher borrowing costs at debt auctions today after Standard & Poor’s downgraded Greece and said it is “increasingly likely” that the nation will default. . . The gap between Greek [poor] and German [rich] borrowing costs surged to the widest since the start of the single currency today after S&P slashed Greece’s rating to the lowest in the world and said it was likely to become the first euro nation to default.”
AND HERE IS THE CLINCHER FOLKS, THE REAL INSULT TO THE MAJORITY:
It’s not THEIR money these greedy bastards are loaning out. It’s OUR money–yours and mine. Ordinary citizens like us who actually do pay our taxes. Our taxes are the primary source of the money that is loaned out through IMF.
How is this money appropriated by Congress? It is slipped into other legislation. I haven’t been keeping close tabs on it lately but the last time it happened that I am aware of was in June of 2009 when they slipped in $108 billion for IMF funds into another piece of legislation that was being passed. This report from Reuters was before the fact but it provides details on how it is done.
So perhaps you see now why I often say that we get the crumbs from the rich of a banquet that we paid for. I say it because it is, unfortunately, the truth in the most literal sense of the word.
Closing remark on how Milton Friedman’s conservative ideology for the rich fits into this particular picture. It’s the fifth commandment from this harsh ideology for the rich that helps to promote this particular theft.
5) Thou shalt eliminate the concept of public good or conscience. The worst thing for profits of wealthy Wall Street Investors is people with a social conscience. That makes profiteers look really bad. Pressure the poorest people in our society to find solutions to their lack of health care, education and social security all by themselves. If they fail, then blame them and call them “lazy.”