It’s time for a state-owned bank in IdahoAdvocates for shrinking government and privatizing more and more services received another blow. JPMorgan Chase recently admitted to rigging the bidding system by which it has received government contracts, including with the state of Idaho. The governor’s press secretary has confirmed that JPMorgan Chase does hold the contract for Idaho’s food stamp program and may have other contracts as well. More research needs to be done to find out all the contracts that giant private for-profit banks have with our government. This is another reason why we need to bring forth legislation to establish an Idaho-owned bank. Why don’t we form a state-owned bank to handle the food stamp, unemployment and student loan programs, among others? Doesn’t it make sense that fees (including the thousands of dollars in penalties that Idahoans incur) should go back into the state’s budget rather than a private East Coast bank? I can’t imagine any Idahoan would have an argument against that. Legislation such as this garnered support from community banks, Republicans and Democrats in the Oregon Legislature this year. For-profit corporations have a single motive: to make profit. A state-owned bank would be controlled by the voters of Idaho rather than shareholders who don’t have an interest in keeping Idaho’s communities healthy. We are making a huge mistake by continuing to privatize more and more services that we all rely on, including banking, public education, corrections and social services. Wall Street and the big banks crashed our economy. The accountability for them has been dismal when you consider the profits those private corporations are raking in month after month. Chase has agreed to a $228 million settlement regarding its bid-rigging scandal that took place over an eight-year period. While this may sound like a lot of money, keep in mind that JPMorgan Chase reported profits of $17.4 billion — that’s with a “B” as in “billion” — in 2010 alone. Wells Fargo (which holds more Idahoans’ money than any other bank in the state) agreed to provide $2 billion in loan modifications and pay a total of $32 million to borrowers who lost their homes to foreclosure in California. Bank of America Corporation is “about to pay $8.5 billion to settle claims from investors that lost money on mortgage-backed securities,” according to the Wall Street Journal. WAMU’s leadership agreed to a $208.5 million settlement to end class-action securities fraud lawsuits. WAMU’s assets were taken over by JPMorgan Chase during the beginning of the collapse of our economy. The spider web of giant banks and other corporations that brought down our economy is detailed in a documentary by Frontline here: http://www.pbs.org/wgbh/pages/frontline/ meltdown/view/ Bank of America Corporation is profiled in this documentary: http://www.pbs.org/wgbh/ pages/frontline/breakingthebank/view/ Why don’t we take our money out of big banks and put it into local banks and credit unions and use the power of the state government to keep our funds in Idaho?
I just finished the Frontline Meltdown series that showed on PBS. Very Illuminating. First of all, the problem started with the deregulation of the banks. Deregulation. A very Republican thing to do. If you deregulate, the economic capitalistic system will regulate itself, i.e., the fox can indeed be trusted in the hen house. My God, what were they thinking, the Bushes and Reagan. But keep in mind that most of our legislators are either business folk or lawyers. They are not economists.
The first thing that happened after deregulation is the buying and selling of mortgage blocks. A company or bank could buy or sell huge blocks of mortgage paper at will...no regulations to hinder the practice. So, why not sell some shaky paper along with the 'good' paper. In other words, why not sell paper mortgages that were almost guaranteed to default...no problem if they do because nefarious mortgage companies could resell the homes for inflated values and resell more flaky paper to other buyers who are doing the same. This is quite simply a PONZIE scheme. [a swindle in which a quick return, made up of money from new investors, on an initial investment lures the victim into much bigger risks.]
Can you see the end product? Mass defaults. Economic collapse, Banks failing. U.S. BAILOUTS.
I like Delmar's idea of Idaho Banks handling Idaho paper. At least they would have some vested interest in what was being sold.