I had to read this twice to believe it. But the first paragraph of the article says it all.
"Over 140 U.S. lenders folded in 2009 alone. To remedy the financial void left in their wake, the Federal Deposit Insurance Corporation wants public pension funds, which safeguard the retirement funds of millions, to buy in part or in whole the banks that couldn't manage to keep their depositors' funds."
http://rawstory.com/...
If I'm reading this article correctly, the FDIC has floated the idea that the US taxpayer can be saved billions of dollars by allowing firms that control pension funds to invest in failed banks. Yeah that really makes a lot of sense. It's not our money that is paid to the US government in the form of taxes that the FDIC is proposing to use. Rather it's our money that is paid into a pension fund. So what the hell is the difference?
FDIC Chairwoman Sheila Blair stated that "Shareholders and creditors would bear the losses, not the public," she explained. "But, the process would be orderly and help prevent a catastrophic collapse of other firms." I admit I'm no economist, but if our pensions funds are invested into these failed banks, who are the shareholders, the creditors? Wouldn't that be you and me?
Bloomberg News notes that pension funds in Oregon, New Jersey, California and New York may participate. The wire service also reported that firms being targeted(my emphasis) for the plan control over $2 trillion in retirement funds.
Wow. Who controls these firms? Do the states have a choice in this?
My point is this, corporate America has blasted the economy to pieces. They've taken our jobs and shipped them overseas. They've made health care unaffordable, a higher education almost an impossibility without incurring massive debt. They destroyed the value of our homes then took millions of them in foreclosures because of horrible market conditions that THEY created. The LAST pot of real middle class wealth that I'm aware of is pension funds. Now the FDIC is proposing that be risked trying to save private banks. Bullshit and double bullshit.
I understand the FDIC is on the hook to pay off the depositors of these failed institutions with tax dollars, but this is NOT the way to fund it. Not only does it establish another terrible precedent (i.e no money, no problem, just invest the pension funds), but it places the hard earned retirement dollars of millions of Americans at risk. But I have a suggestion, rather than finding another way to make you and me pay for this AGAIN, how about taxing the damn banks and investment firms that caused this mess? Goldman Sachs, Citi, Bank of America etc. Those firms are the ideal candidates to pay for this because they are responsible for the economic crisis.
CORRECTION
I would like to make a correction. The FDIC is funded by insurance premiums paid by the banks, not by our tax dollars. Sorry, my bad. Still this makes the FDIC proposal even worse. The FDIC wants private pension funds (i.e you and me) to pick up the slack for private banks. So not only did we bail them out with TARP funds, now they want Americans to back them with private pensions funds.