We just found out that a task force of state and federal prosecutors reached a settlement of
$16.65 billion–that is a B–with Bank of America for their role in the financial meltdown of 2007 that cost this country and the world trillions of dollars. The very same meltdown destroyed wealth all over the world, forced untold millions of people out of their homes because of foreclosure, cost even more millions their jobs and financial security, and proved beyond any shadow of any doubt that unfettered, deregulated capitalism is always ultimately destructive.
This new settlement with Bank of America follows and surpasses a similar settlement made by the same task force of prosecutors with JP Morgan Chase in 2013.
Of course, neither of these settlements replace the destroyed income and broken families, lost homes and broken people caused by the financial recklessness and shenanigans of a Wall Street drunk and high on its own power and greed. These banks played with derivatives and our mortgages as if people didn’t live in the homes they held mortgages on.
Unfortunately, only a tiny bit–$800 million– will go for homeowner relief, foreclosure prevention, and preservation of affordable housing.
I don’t think anyone really knows the total extent of destroyed wealth in the 2007 Wall Street meltdown. The last figures I saw were $5 trillion of destroyed wealth in the US and $50 trillion worldwide. I cannot confirm this, but I recently saw an article claiming that half of the world’s Gross Domestic Product was lost.
There are many lessons to be learned from this horror, but three are very apparent and important:
• In the face of economic catastrophe, austerity does not work. Europe has followed that path to continuing economic horrors, including 30 percent unemployment in Greece.
• What is needed is direct government intervention and investment in good, family sustaining jobs that create a stronger economy and country–please see my book Getting America Back to Work for a full discussion of this point.
• You cannot leave unhinged capitalists and drunken capitalism to run the economy. The economy should be run for the common good, not the tiny few at the very top.
Photo source: www.occupy.com