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L. Neil Smith's
Number 665, April 8, 2012

"They're a credit to Disney's Audio-Animatronics"

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by Jim Davidson

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Special to L. Neil Smith's The Libertarian Enterprise

The banking gangsters have been at it a long time. It might well be said that mankind will finally be free when the last bankster is hanged in the entrails of the last politician.

The banks got themselves into trouble in 2006 and 2007, through a long series of bad choices dating back well into the early part of the 20th Century. These choices follow national government policy, policies establishing the Federal Reserve System in 1913, policies confiscating and seizing gold coins, policies beneficially regulating the banking industry to reduce competition and make it more of a cartel, policies to use federal loan guarantees for home loans, student loans, and other federal policies to change lending practices. In the late 1990s, failures like Long Term Capital Management made it clear that it is also Federal Reserve policy to back the largest and most speculative of the financial institutions.

The 2008 bailouts by Bush, doubled down on in early 2009 by Obama, didn't revitalize the economy. The economy is presently not vital, at all, with 46 million Americans on food stamps and over 22% of the country out of work (though many are no longer qualified as "unemployed" by the linguistic fail of the department of labour statistics). (Footnote 1) Instead, the bailouts took away the incentives for the banking gangsters to clean up their act. Everyone knows it, but the banksters pretend it isn't happening. (Footnote 2)

It is happening, though, and the Dallas Federal Reserve has bothered to notice, four years later, that there are problems. One of the key problems is a set of policies called "too big to fail" or TBTF, which represent the basic guideline that Bank of America, Citibank, Wells Fargo, Goldman Sachs, JP Morgan Chase, and other very large banks can do anything, however foolhardy, however reckless, however illegal, and will be bailed out, always. They can lie, cheat, steal, with impunity, and will always be bailed out. They can foreclose on homes to which they do not have good title, and will always be bailed out. They can lend money to student borrowers who become unable to pay back those loans, and they will always be bailed out. In 2005, the lending laws were changed so that students can no longer file personal bankruptcy to end their indebtedness—debt peonage has returned.

On page 8 of their report (Footnote 3) the Dallas Fed presents some impressive facts. The top of the five banks in the United States in 1970 owned 17% of all financial industry assets. The next largest 95 banks owned 37% of the assets. The 12,500 smaller banks owned 46% of the assets, nearly half of all banking-related assets.

Due to the deliberate policies of the fat cats who run Congress, these ratios have changed. Again, from the same page, the figures are, for 2010, the top 5 banks own 52% of all financial industry assets thanks to their extremely protected positions handed to them by the Congress. The next 95 banks own 32% of the assets, a proportion very similar to the situation in 1970. The big news is that since 1970, the 12,500 smaller banks have closed down and been bought up, so that there are today only 5,700 other banks. And these smaller banks own only about 18% of the financial industry assets. By eating the small banks, the five largest banks have taken over their share of the industry, along with some of the share of the medium-sized banks. Congress let them do it.

Why? Because the men and women in Congress are themselves very wealthy. The least paid Congress critter in office gets $154,000 a year, compared to the average American who receives $48,147 a year (2011 figure, see wikipedia for per capita GDP data). The average American has a negative net worth, being in debt for a mortgage, student loans, credit cards, a car loan, and other personal loans in excess of their assets. The average member of Congress is worth $2 million—according to figures from 2010. You can easily look up these facts and figures.

So it is little wonder that 46 million Americans are on food stamps, that the Tea Party and Occupy Wall Street protesters object to the bankster scum and their too big to fail policies. Congress loves the banking cartel and hates everyone else. The banksters hire lobbyists to treat Congress critters like royalty, wine and dine them, and get whatever they want. Congress actively fears the American people, who have a long history of rebellion and revolution, of tarring and feathering scum, and of gutting and butchering vermin. They are right to fear.


1. Shadow Stats Alternate Unemployment data

2. South Florida Law Blog

3. Dallas Fed Annual Report

Jim Davidson is an anti-war and pro-freedom activist. Recently, a 501c3 group with which he is affiliated was given a building in Kansas City. Jim continues to respond to requests for help with the Sovereign Mutual Aid Response Team, the university association of Individual Sovereign University. He can be contacted at and His books Being Sovereign (2009) and Being Libertarian (2011) are available from major book retailers:

Link for Being Sovereign

Link for Being Libertarian

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