Financial Corporations are No Longer Capitalists

Corporate financial institutions such as Bank of America and Goldman Sachs  have received hundreds of billions of dollars in taxpayer money in 2008, yet these companies were boosting perks and benefits such as charter jets and country club dues to their top executives. In fact these types of “perks” had increased by 4 percent in the corporate financial industry according to an analysis of corporate disclosures filed in recent months.

In contrast to the 4 percent average increase in perks and benefits at these companies, the average awarded to top executives at non-financial firms in the fortune 100 declined by more than 7 percent over the same period.

Who can really blame the financial companies?  These huge corporations haven’t had to face the consequences of their actions.  They have  benefited from the good side of our capitalist system while taking a time-out when the bad side comes around.  The financial lobby learned to pal up to their crony buddies in congress like Senator Chris Dodd and in turn have received sweet deals at taxpayers expense.  They also received the coveted title of “too big too fail.”  In fact these financial corporations have spent over $220 million in lobbying their buddies in  government.  That number doesn’t count the low interest v.i.p. loans they doll out to members o congress for loans to their mansions.

Smaller financial institutions and non-financial businesses had to adapt and adjust their business models  in order to survive.  They had to cut costs and make tough decisions.  The financial industry (like the car companies) didn’t have to do this.  Instead the “too big to fail” giants have become a bloated, wasteful symbol of the pre-bubble era.

The government should act immediately and make it clear that the financial institutions will not receive another dime from taxpayers. Congress should also have legislation in place with the FDIC. When these companies fail again (and they will) a peaceful transition of their assets should be quickly sold to responsible companies. Or  break up the failed corporations into smaller companies.  This will promote competition and will  not be a threat to our economy as these bloated relics are today.

We have learned a valuable lesson from the recent financial crash.  Capitalism works and financial corporations must compete on the same playing field as the rest of businesses do.  These finance companies are reminders of our college days.  Of the rich college kid who blows all his allowance on booze and liquor.  The spoiled child need only call his rich Mommy (Chris Dodd)  and Daddy (Taxpayers) to send more cash.  The rich child who has learned nothing will continue spending like a drunken sailor (at least a drunken sailor earns his money) until his parents become tired or broke and stop the cash flow.  The spoiled child will learn very quickly that money isn’t free.