Explosive Bloomberg Editorial: Bank Profits are "almost entirely" Taxpayer Money

On television, in interviews and in meetings with investors, executives of the biggest U.S. banks -- notably JPMorgan Chase & Co. Chief Executive Jamie Dimon -- make the case that size is a competitive advantage. It helps them lower costs and vie for customers on an international scale. Limiting it, they warn, would impair profitability and weaken the country’s position in global finance.

So what if we told you that, by our calculations, the largest U.S. banks aren’t really profitable at all? What if the billions of dollars they allegedly earn for their shareholders were almost entirely a gift from U.S. taxpayers?

It's nice to see Bloomberg finally getting on board with the Occupy Wall Street message that the big banks are raiding our economy.

So how much are we paying the banks? Well, according to the studies Bloomberg is citing, the subsidies only lower borrowing costs for banks by about .8 percent.

Small as it might sound, 0.8 percentage point makes a big difference. Multiplied by the total liabilities of the 10 largest U.S. banks by assets, it amounts to a taxpayer subsidy of $83 billion a year. To put the figure in perspective, it’s tantamount to the government giving the banks about 3 cents of every tax dollar collected.

So three cents out of every tax dollar the government collects from you is pocketed by the 1%.

This is grand larceny on a national scale.

Didn't the tea party campaign on ending the bailouts? Well this is a permanent, yearly bailout. Let's end it, and replace it with a Tobin tax.

We need to break up the banks.

Full Bloomberg editorial here.