Joseph Stiglitz: America Has Created Two Economies

For OpEdNews: Monika Mitchell - Writer

A Call to Action

We did not fix the banking system, Columbia University economics professor Joseph Stiglitz told the well-heeled audience at the World Business Forum this week.

The Feds pulled the big banks back from the brink of oblivion, but left everyone else up a creek without a paddle. You know who the fortunate few are Bank of America, JPMorgan Chase, Wells Fargo, Citibank, Goldman Sachs, Morgan Stanley, Capital One, and American Express among others.

To remind you of the facts, these banks were rescued through three lifelines: capital, credit and relief from debt. In their emergency hours, they were liquidated with $700bn in capital. Toxic debts were allowed to be moved "off" books; the government bought billions of dollars worth of toxic securities and let other debt remain dormant on balance sheets for years to come. Thirdly, these banks have had access to Federal Reserve funds at near zero percent for the past two years while lending to consumers at rates of 18-29%.

So what happened to the rest of the banking system? They are struggling like so many of us to stay afloat. As they tread water, sea level for mid-range and regional banks is rising. Stiglitz says 800 smaller U.S. banks are teetering on the edge of bankruptcy.

http://www.opednews.com/articles/Joseph-Stiglitz-America-H-by-Monika-Mitchell-101008-961.html

How can i get into some of that near 0% interest rate action? Cos i can quit my job right now with the interest i can generate on a $1m loan and still pay back the govt with interest. TARP and FED reserve are running the biggest scam on the american peoplle.

the article indicates are in fact THE MAJORITY!

Everybody else is overcharged to the point that they can't afford anything. This is why we have to restore FDR's ideas, before anything will get better. If the private banks won't lend to small business and consumers below median income, fine, then the government has to - and at lowest rates - just to compensate a little bit for the bottom being underpaid. That's the only way it will work. Then the private banks and the wealthy can do whatever want to each other (without govt ins of course), I for one wouldn't care. There has to be protection of the grassroots foundation of our society though. It can't be just a shark free-for-all forever.

If the government doesn't be our bank, no one will. And we're going to collapse more, I agree with Stiglitz on that.