Bit of News
Tuesday, 05 May 2009 Written by Garrett Johnson
Paul Krugman recently pointed out that wages are falling across America. A week earlier the Treasury Department reported that tax revenue was collapsing at a 14% rate.
It’s easy to see the correlation between these two trends. But what do they have to do with this statement? Everything.
Sen. Dick Durbin (D-Ill.) has been battling the banks the last few weeks in an effort to get 60 votes lined up for bankruptcy reform. He’s losing.
“And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place,”
The first thing to understand is that the banking industry adds nothing to the economy. It doesn’t sow crops, make widgets, build homes, or fix your computer. The financial industry sits on top of the real economy in the same way a fungus grows on a tree. In fact, as famous investor John Bogle said a few years before the massive bailouts, the financial sector actually subtracts from the economy.
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In These New Times 