Follow the Money

Follow the Money

The flow and distribution of money is a complex, and for most of us, mysterious phenomenon. The headlines scream that the banking industry has reverted to its risky ways that led to the financial melt down , The bonuses are back to, or a exceeding, previous periods. Where does the money come from? Wealth only derives from goods and services. Bankers obviously do not provide goods. They get paid for services Banks accept our money in savings and checking accounts for safekeeping. They, in turn, lend out that money at profitable rates of interest. They pay out pitifully small rates of interest in return. They charge for every service they provide. They also have stockholders who invest in the bank . Bank employees do not make magnificent salaries.

Apparently the cumulative effect of the numerous clients and their transactions is similar to a snowfall. Many small fees on a steady basis grows to enormous amounts very quickly. Some banks have paid back their bailout in short order .

This, too me, begs the question: Are we being charged too much for what we are getting?
What is the justification for such tremendous profits?. Why do those at the top of the financial food chain warrant such exorbitant incomes? Do they, except in their own thinking?

My conclusion is we are being played for suckers. They argue that they are the risk takers. There’s the rub . They feel safe taking those profitable risks because they have been assured through the FDIC and the government in general, that they will be bailed out of severe losses . So where is the risk ? Where is the “prudent man rule”?

The insurance industry is another financial omnivore . The profits generated are astronomical. Are they warranted? Probably not. To put it bluntly, the system is rigged in their favor .

Perhaps the biggest financial: glutton of all is the stock market. Salaries are six figure’s to begin with. On top of that , year end bonuses are equal to or greater than the salary.
Why is that? It appears that every one who deals with the stock market is getting ripped off.

The three industry’s mentioned above are all bound by legalities, regulations that don‘t regulate. Then there are the lawyers. They see the tremendous pools of cash lying about. Consequently their fees for services are astronomical also.

Although lawyers, doctors, dentists, etc are not unionized they are well organized and as such fall into the “special interest” category and exert their influence on legislation that protects their interests. In spite of the dire straights a large percentage of the population faces their fees continue to escalate faster then the cost of living index. Suggestions that those fees will be reduced in the future to help control costs are met with howls of protest and the legislators give in to them.

All us common folks can do is listen to politicians and candidates blather about how they are going to change things and protect us from the money grubbers. Unfortunately, once candidates get elected they become members of “the club “ and we are no better off, or worse.

The present administration is attempting to rein in the banking, insurance, and other finance industries as well as the broken Healthcare System. They deserve a chance to do it .

This post was sent to the paper but not published, probably because it steps on the toes of too many advertisers.