The American election campaign never ceases to amaze in terms of twists.
So far (let’s face it) there is nothing new. But the problem for Clinton, the banks and Barney Frank is the refrain «Tarp Funds»; basically the 2008 financial crisis. The Bush administration, with a $700 billion maxi-loan (made up by citizens’ taxes), granted instant cash and saved the big banks from bankruptcy.
The infamous measure will be called TARP:
The Troubled Asset Relief Program (TARP) is a United States government program to purchase toxic assets from financial institutions, and actions to strengthen the financial sector. It was signed by US President George W. Bush on October 3, 2008.
A small detail to keep in mind: the loan was funded with taxes paid by US citizens.
However, the banks were saved, speculation continued, and two years later, a decree that negatively changed the American financial system was passed, the infamous Dodd-Frank.
The words of the Wall Street Journal thoroughly explain how the financial giants and the big banking conglomerates have profited from this other law-saving bank:
«Dodd-Frank was allegedly written thinking of Wall Street, but has hit Main Street. The financial community institutions, which make up most of loans to small businesses, are overwhelmed by the complexity of the new law. Government figures indicate that the country is losing an average of a community bank or credit union each day.
Before Dodd-Frank, 75% of banks were offering a free account. Two years later, only 39% of bank still offer that free-of-charge savings account.
Due to the Dodd-Frank, the financial markets will have less ability to cope with shocks and are more likely to panic [and panic = speculation = profits for banks and financial institutions]. Many economists believe this could be the source of the next financial crisis».
Two further details if you have not already guessed the extent of these revelations. The Frank in question is Barney Frank, the guy mentioned several times in the the donations. Guess who Frank received the money from. Banks, of course! The same banks for whom Frank significantly increased their revenue thanks to the law with his name. What better way for JP Morgan, Goldman, Bank of America and company to show appreciation for their future gains than by raising tens of thousands of dollars for Frank and his party?
The revelations are likely to be a disaster for Clinton and the Democrats. The large banking corporations have funded them using money from the TARP fund. They have given the Democratic Party money collected from taxes and granted for a completely different purpose (namely, to deal with the failure of the financial giants).
These hidden financial mechanisms reveal the backstory behind the US electoral system. An elite made up of financiers, bankers and lobbies are the real stakeholders and decisive contributors in presidential elections. They fund all central and vital aspects of democratic and republican campaigns, becoming an indispensable support for any candidate. In return, politicians allow direct procurement and assign huge projects to large industries, or turn a blind eye in case of financial fraud. The consequences are clearly visible in America’s deterioration, increasingly grappling with corruption cases, postponed projects, a lagging behind, and a general feeling of backwardness in vital infrastructure.
In the military field, for example, large lobby groups of weapons manufacturers have created a procurement system that threatens to squander forever the tactical and strategic advantage obtained by the United States over the last 70 years. Programs such as the F-35 were delayed and costs surged stratospherically due to likely corruption and a lack of competition in the procurement process. Similarly, a perpetual race to produce more and more weapons systems that are in the end unnecessary and redundant, instead of exploring new pathways, has enriched US policymakers and made the military-industrial complex much wealthier, but in the process has served to reduce the gap between the US and her peer competitors.
This whole process is a vicious cycle that can easily be summarized in the following manner. Politicians often derive their strategies and tactics from the reasoning and the conversations that take place in US think-tanks, which are funded and supported by companies involved in such industries as pharmaceuticals, insurance, the military, and the cyber and space spheres. In the case of war involving weapons systems, for example, it is easy to understand why policymakers are being influenced by their contributors, who often suggest courses of action and strategies based on the need to spend huge amounts of money to acquire their new products, thereby enriching said lobbies and manufacturers in the process. This triangular system – lobby-thinktank-policy – is one of the founding pillars of current American war doctrine that is failing miserably.
In the same manner, the banking and financial system of Wall Street also contributes and enjoys the same privileges. The banks were bound to return the favor, in the form of millions of dollars of donations, to the political class that was responsible for saving them from the 2008 financial crisis stemming from wild speculation and accounting deceptions. Within a few months, billions of dollars were transferred for free into the accounts of the banking giants thanks to the TARP decree, effectively preventing a major bankruptcy. The consequences were so devastating that today we are experiencing a systemic and endemic crisis of the financial sector that is likely to completely overwhelm Western economies the next time a too-big-to-fail scenario arises.
Politicians continue to enact laws in favor of the banking giants, pocketing large sums of money for their election campaigns in the process. The attention is constantly drawn towards effectively increasing the gap between the top 0.1% and the remaining 99.9%, and the politicians are the key factor in this strategy. Laws adopted in recent years have created an environment where banks have become untouchable and beyond reach. It is a situation that is exactly the opposite of what should have happened after the 2008 crisis, with increased oversight and transparency in financial transactions.
The extent of the degeneration of this system has been revealed in recent days with the information released by Guccifer 2.0. Even though nothing should any longer be surprising given what has transpired over the last few years, one is still taken aback by revelations that the banking giants are financing the Clinton campaign directly with American taxpayers’ money. If we add to this the funds that were freely handed over by the government to save those same banking institutions from bankruptcy in 2008, we take another step further into the theater of the absurd.
FEDERICO PIERACCINI | SCF