money

The total of loans, mortgages, overdrafts and credit card purchases is massive and in Britain stands at some £780 billion, £500 of which is born by ordinary people. The Americans, supposedly the richest citizens ever to walk the face of the planet, are the most heavily indebted people of the world, carrying morgage debts that currently total $4.2 trillion.

1. Bank profits are highest since before the recession…: According to the Federal Deposit Insurance Corp., bank profits in the first quarter of this year were “the best for the industry since the $36.8 billion earned in the second quarter of 2007.” JP Morgan Chase is currently pulling in record profits.

2. …even as the banks plan thousands of layoffs: Banks, including Bank of America, Barclays, Goldman Sachs, and Credit Suisse, are planning to lay off tens of thousands of workers.

3. Banks make nearly one-third of total corporate profits: The financial sector accounts for about 30 percent of total corporate profits, which is actually downfrom before the financial crisis, when they made closer to 40 percent.

4. Since 2008, the biggest banks have gotten bigger: ... the nation’s biggest banks — including Bank of America, JP Morgan Chase, and Wells Fargo — are now bigger than they were pre-recession. Pre-crisis, the four biggest banks held 32 percent of total deposits; now they hold nearly 40 percent.

5. The four biggest banks issue 50 percent of mortgages and 66 percent of credit cards: Bank of America, JP Morgan Chase, Wells Fargo and Citigroup issue one out of every two mortgages and nearly two out of every three credit cards in America.

"What notion of economics or ethics justifies the fact that it would take the average family more than 35,000 years to earn as much as the top hedge fund managers earn in one year?"

Note: 260% debt-to-GDP is the all time record for repayment, accomplished by England between 1815 and 1900, but required both massive cuts in spending and an industrial revolution.

Without mincing words, the world does not face a crisis of liquidity, nor a crisis of insufficient debt, but one of entirely too much debt. That's the entire predicament in three words: too much debt.

Capital throughout its history has long sought to evade certain costs, to treat them as "externalities" as the economists like to say. Environmental costs and the costs of social reproduction (everything from who takes care of grandmother and the disabled to child rearing) are the two most important categories that capital prefers to ignore. Two hundred years of political struggle in the advanced capitalist world forced corporations to internalise some of these costs either through regulation and taxation or through the organisation of private and public welfare systems...

Since the 1970s, there has been a concerted effort on the part of businesses to divest themselves of the financial and political burdens of dealing with these costs. This was what Reaganism was all about. Simultaneously, the high mobility of capital (encouraged by the deregulation of finance and capital flows) permitted capital to move to parts of the world (Asia in particular) where such costs had never been internalised and where the regulatory environment was minimalist.

Meanwhile, the preferred means for seeking solutions to the key problems of environmental degradation and global poverty – the liberalised markets, free trade and rapid growth and capital accumulation favoured by the IMF, the World Bank and leading politicians in the most powerful countries – are precisely those which produce such problems in the first place. The problem of global poverty cannot be attacked without attacking the global accumulation of wealth. Environmental issues cannot be solved by a turn to green capitalism without confronting the corporate interests and the lifestyles that perpetuate the status quo.