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My Head Explodes – Wall Street Steals at the Most Basic Level

June 23, 2012

This is the mother of all crazy-making stories. If you are prone to high-blood pressure, you should turn away now.

Matt Taibbi strikes again. This time he is pulling at the strings of the ultimate Wall Street theft – institutionalized bid rigging and price fixing as a way to steal every single city, town and state blind.

I just KNEW this would be a scam to get you coming AND going – here are some extra factoids that didn’t make the main article: Not just fixing the the muni-bond markets, but likely the fundamental unit of interest rates (LIBOR!!!) AAHHHHHHHHHHHHHHHHHHHHHHHHHH!

Here is the larger argument in a nutshell: capitalism tends towards monopoly-like structures; often taking the form of a handful of firms that don’t “compete” but rather “collude” to fix prices. The textbook story of widgets and competition is a fiction that only very rarely appears in real life and then disappears as firms consolidate.

So, my question is: How exactly would nationalizing the banking process at key points serve to introduce “inefficiencies” over and above the current system of banking? And as a follow up question: Wouldn’t any inefficiencies (and we’d assume this kind of rapacious theft would be pointless if bankers and middlemen couldn’t capture obscene profits) – to the extent that your mind still believes “markets are magically efficient,” at least these inefficiencies would be captured by government, right? #FFS

Capitalism, once you peel back the mythology, is chock full of “natural monopolies,” rent-seeking by capital (ie moving towards a “tax” rather than wanting to invest and compete) and competition ends in collusion more often than efficiency – often after all out price wars aimed to gut the competition rather than find some magical “natural price floor” or what have you. This makes me angry. Nationalize them. They have outlived their capitalist function. We can still have local banks and credit unions and we can make government policy to increase incentives and end the implicit subsidies to larger TBTF banks. “Innovation” coupled with deregulation and increasing political spending has nearly wrecked us, and oh – by the way – they’ve been flat out stealing from every single town, municipality, school, hospital, city and state in the country for well over a decade.

This is the first truly profound piece of evidence showing just how widespread the Wall Street theft is. If this doesn’t end in a breakup of the banks, mass arrests, and a new organizing set of principles for Wall Street, then it is time for Pitchforks.

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