Oh this is rich. The chief of Deutsche Bank – Germany’s best-known prophet of neo-liberalism and the gospel of the unfettered markets – now pleads for government intervention in the capital markets:
"The head of Germany’s leading Deutsche Bank, Josef Ackermann, said the
world financial crisis currently unfolding would need strong and
organized government intervention to stop further bleeding in financial
institutions. Simple market corrections, he said, won’t do the trick.
"I no longer believe in the market’s self-healing power," he told an
audience in Frankfurt on Monday. "Making liquidity available isn’t the
cure-all."
Ackermann blamed the global financial crisis on the "real-estate bubble" and the sub-prime mortgage meltdown in the United States. But he failed to point out that Deutsche Bank itself, under Ackermann’s management, has been one of the prime movers behind both the bubble and the meltdown.
Deutsche Bank made $$millions in the US by packaging sub-prime mortgages into securities and selling them at a profit to public banks in Germany such as IKB Industrie Kreditbank and SachsenLB – forcing the German taxpayers to fund a massive bailout of these institutions. Now, Deutsche Bank is the trustee on tens of thousands of foreclosed homes in the US, making it America’s Foreclosure King. Don’t forget that it was Ackermann and his fellow Vorstand members who lobbied for the the repeal of the Glass-Steagall Act in the US, so that it could acquire Banker’s Trust and the broker Alex Brown.
We are in the middle of a global financial meltdown which will be devastating for millions of investors, borrowers and homeowners. The crisis is caused by the deregulation of the capital markets along with the the lack of transparency in transactions championed by Ackermann and his peers in Frankfurt, London, New York and Washington. For the past decade, life was good, and they were able to pocket $$billions in fees and bonuses. Now, they are looking into an abyss and the government must intervene. This is the neo-liberal mantra: privatize profits, socialize losses.
Ackermann now joins the ranks of the Wall Street Welfare Recipients:
"The Wall Street
titans have turned into a bunch of welfare clients. They are desperate
to be bailed out by government from their own incompetence, and from
the deregulatory regime for which they lobbied so hard. They have lost
"confidence" in each other, you see, because none of these oh-so-wise
captains of the universe have any idea what kinds of devalued
securities sit in one another’s portfolios."
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How infuriating. I’m reading story after story about the misfortunes of average Americans who can’t find a job that would pay for the most minimal standard of living for one person. For whole demographics, like single moms, poverty is rapidly becoming the rule, not the exception. But we have to save the banks!
Most corporate executives only believe in free markets when they’re making money. When they lose money, most corporations take a ride on the Keynes express to Corporate Handout Center to get in line for welfare financed by the people they were busy taking advantage of.
The fact that banks know they’ll get handouts during recessions that they help create is one reason that they aren’t real friends of the free market. Banks have been bailed out by governments from every financial collapse of the past decade, from the crisis in Asia in the 1990’s to Argentina, and now the subprime fallout.
If governments stop stealing money from people to give to banks who also stole from people, then maybe banks would learn that they can’t engage in such fraud without paying dearly for it.