It’s a Wonderful Life, for Potter.
Lionel Barrymore as the evil banker "Mr. Potter"
by Nick Paleologos, December 20, 2013
Is there anybody out there who still believes that banks keep our money safe and make loans to help us buy stuff? Of course not, and here’s why. Imagine falling asleep in Bedford Falls and waking up in Pottersville. The Bailey Savings and Loan is long gone. So is good old George Bailey. You’re drowning. But George isn’t there to save you because Clarence isn’t there to save him. You see, in this nightmare there is no Clarence.
And its not just the banks. The stock market used to exist to help companies find capital, until Potter took it over. In the old days, a guy woke up and decided America needed widgets, and he was just the one to make them. He went down to the market and convinced some folks to give him money for his widget business. In exchange, they got shares of stock in his new widget company. Widget Guy used the money to buy equipment and hire people. If he made a profit, so did his investors. If he didn’t, they didn’t. Here’s the best part: whether or not Widget Guy and his investors made money, lots of people got hired and paid in the process. And lots of real stuff got bought and sold.
Then Potter took over the market and screwed everything up. He convinced those same investors that they were chumps for buying shares in Widget Guy’s company. After all, it takes time to build a successful business. Who wants to wait that long to make money? Potter had a better idea. If investors liked widgets so much, they should give their money to Potter instead. He’d find other investors and they could all bet with each other on the price of widgets. Potter would be the bookie. They could bet on Widget Guy’s stock price without ever giving him any money at all. When they got bored with betting on widgets, Potter had a million other things they could bet on: the price of cars in China; the temperature in Sri Lanka; the rainfall in Iowa; or for that matter--anything else that moves. Every day Potter came up with more exotic bets to suck all their investment capital out of the real economy.
How many bets did Potter book while nobody was looking? Let’s put it this way, the federal budget deficit this year is lower--by half--than it was four years ago. But it’s still humongous at three quarters of a trillion dollars. If you add up all the federal budget deficits over the last 200 years you get the national debt—which is about $16 trillion. At this very moment, Potter is holding bets (he calls them derivatives) worth approximately $600 trillion. That’s 37 times the national debt—all tied up in betting slips. And whether Potter’s clients win or lose, Potter always wins because he gets a fee on every bet. Meanwhile Widget Guy never sees a penny. By the way, the last time Potter guessed wrong, the rest of us had to cover his losses.
Why? Because Potter also took over the US congress--which changed all the laws in his favor. Think about it. There was a time when congress at least pretended to support the notion that everybody should pay their fair share of taxes. That’s all changed.
Today, the official policy of the United States is: tax wealth at a lower rate than work. Potter makes $10 million a year and pays less than half the tax rate of Widget Guy, who earns $100 thousand a year. And that’s just the tip of a very dirty iceberg. Potter doesn’t pay a penny more in Social Security taxes than Widget Guy either--despite pocketing a salary that’s 100 times higher.
On Capitol Hill, Potter decides what’s fair.
On Wall Street, Potter decides what’s right.
Unfortunately, Widget Guy lives on Main Street.
And in Pottersville, Main Street doesn’t have a chance.