How Wall Street uses your money to lobby against you
Banks are doing a lot more than shoring up balance sheets with near-zero interest rate bonds. They've reported record profitability and compensation levels, and are spending more than ever on lobbyists.
You know how, like, your grandparents have no choice but to buy the convertible bonds of casino companies and trade Chinese penny stocks because the rate on their money market fund is basically 2 basis points?
So, the reason for the seemingly endless drought in responsible yield options for savers is that banks needed to "reflate" themselves and "rebuild their balance sheets" for the good of the system. Yeah "The System", that's the ticket. So rates were brought down to effectively zero in an effort to stabilize housing and ensure liquidity for businesses who wanted to borrow or hire.
And since the part about stabilizing housing and helping business owners to hire people was a scam and was demonstrably unsuccessful, we can really only point to the reflating banks part and say that something has been accomplished.
Except the banks are doing a lot more than shoring up balance sheets with the zero-cost dollars they have been gorging on over the last 18 months - in addition to reporting record profitability and almost record compensation levels, they've also been attempting to buy both sides of the aisle, lobbying like there's no tomorrow in our nation's capital.
Get a load of this (from CNN Money):
The financial industry has spent $251 million on lobbying so far this year as lawmakers hammered out new rules of the road for Wall Street, according to the latest lobbying reports compiled by a watchdog group.
The financial sector spent more than any other special interest group from April through the end of June -- a whopping $126 million, according to the Center for Responsive Politics' latest estimates. Wall Street banks, as well as insurance and real estate firms, hiked the amount they spent on lobbying by 12% in the second quarter compared to the same period last year.
And really, what are you going to do about it? Probably nothing, because this has been going on for almost 2 years and you are busy DVRing True Blood and downloading apps that map out the closest Chipotle locations.
Lobbying is what industries do when pending legislation threatens their future profitability. This is perfectly normal, except in the case of the banks they are using your money to lobby against protections that may save you from the next Frenzy-Depression combo that is surely around the corner.
And it is Your Money. Between TARP (which was paid off because of the reflation derby), extraordinary assistance, stupid-low interest rates and other treats from Congress, banks have been given carte blanche, much of it directly from taxpayers.
And now this money is being used to fund an army of roughly 240 lobbyists, many of them ex-government officials who "know how the system works".
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