Foreclosures and Unemployment Tries Out the Patience of Chicago

Foreclosures and unemployment are bringing trouble to Chicago

Rampant foreclosures coupled with increasing unemployment have tried out the patience of Chicago. The cry is loud and clear – “Bust up the big banks” or “Too big to fail is too big to exist.”

These welcoming slogans are greeting the attendees participating in conferences of American Bankers Association. Generally these meetings are exclusive gatherings with seminars and talks on investment strategies. There are today frustrated young bankers who are hobnobbing with each other and hoping to curry contacts. Lobbying for legislation is usual on the agenda.

Recently as the ABA team conferred in Chicago the bankers were welcomed by thousands asking for their accountability. On Monday 26th October the city residents marched to Goldman Sachs’ offices demanding that the financial giant disburse the huge amount of $23 billion it has set aside for bonuses to the task of preventing foreclosures. On Tuesday thousands planned to send the message to the bankers that “enough is enough”.

Americans are justified in their anger. The crisis started from Wall Street when driven by personal greed the principal bankers divulged in a splurge of speculation that eventually led to the bursting of the bubble. This threatened the entire financial system and the ripples spilled over to engulf the entire world in a depression.

To repair the damage the then President Bush together with Federal Reserve chairperson Ben Bernanke and Hank Paulson (formerly of Goldman Sachs) made the Congress grant $750 billion to be given to the financial entities with the warning that if this was not done the situation would worsen. They reiterated that the money was for the banks to renew lending to the common man and thus allowing the wheels of the economy to run.

In reality behind this cover trillions from the taxpayer’s kitty has been granted to the financial sector without a nod from the Congress. The jumbo banks promptly put the money in their pockets directly. Indirectly the money flowed in as subsidies and guarantees. As a result these banks are surfacing from the crisis bigger, better and swollen with success. They are basking in the acknowledged dictum that they are too big to fail. Without wasting time they have gone back to their tricks of investing in risky speculation in derivatives. Huge amounts have been set aside for their own perks and bonuses.

Thus while Wall Street is swelling and soaring, the rest of the economy is once more floundering and drowning. It is time citizens took up the cudgel.