The biggest theft in the history of humanity

Mark my words: what is going on now with the bailouts of financial institutions will one day be clearly seen for what it really is – the biggest theft in the history of humanity. The money is being stolen off you and me - and off our children and grandchildren - in the form of higher taxes and higher future taxes. This is being done in order to bailout financial institutions that have made estimated world-wide losses of 4.1 trillion dollars (according to the IMF) - ) – “The next estimate will presumably be higher” notes Martin Wolf of the Financial Times dryly. The financial institutions knowingly took the risks that led to these losses, because they knew that they would be bailed out when things went wrong, and because they knew that the people who run the banks would make personal fortunes before the bailout became necessary.

Where is the biggest bank bailout theft occurring? Here in Ireland. According to the IMF, Ireland will pay a higher price (proportionately) to stabilise its banks than any other developed country in the world. This is because Ireland had a bigger property boom than anywhere else, and so there are more bad debts here than anywhere else. Thus, young people in Ireland will have to continue paying off the most over-priced mortgages in the world – but they will also face huge increases in taxes in order to fund the largest bank bailout in the world. Many people will start to ask themselves: Is there any point in staying in this country? And this is not just my opinion – it is the opinion of twenty of Ireland’s leading academic economists, all of whom think that the current proposed government bailout of Irish banks is basically a disguised rip-off of the Irish tax-payer. These 20 economists think that the government should nationalise the banks – so that the tax-payer might at least have the possibility of getting something in return for his money.

But remember that the governments of developed countries, including Ireland, have one objective: to give these financial institutions as much of your money as they possibly can, with a minimum of fuss, and without nationalisation. The IMF expressed concern that taxpayers were becoming weary of supporting the financial sector: “There is a real risk that governments will be reluctant to allocate enough resources” it fretted. Personally, I think the IMF is worrying for no reason: the public objects to these bailouts, but the governments will just ignore those objections. The bankers will not give back the money they made during years of illusory profits. They will just take our money now, in order to cover their losses.

So why do the banks need to be bailed out with your money? The official answer is that there is a “shortage of credit”. If the banks are not bailed out there will be no lending, so the story goes. This is rubbish.

If governments really wanted to increase “credit” here is what they would do: set up new state-owned banks using the money that they are giving to the existing banks OR nationalise the systemically important parts of the existing banks. But they wish to avoid nationalisation at all costs. By giving your money to the existing banks, governments are ensuring that your money will be used to write off the bad debts of those banks, rather than to “expand credit”. The purpose is to use your money to keep the existing institutions in tact, with as many of the same people in charge as is possible. And remember that the REAL problem with the world economy is not a shortage of credit – it is a shortage of demand.

The rest of us can go screw ourselves while the bankers laugh at us because we let them steal our money.

Will the government continue to treat you with contempt by refusing to nationalise the banks? Will you vote for them if they continue to treat you like this?