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Corporations are Not People: The Bank Living Will Edition
Corporations are Not People: The Bank Living Will Edition
Courtesy of Jaime at Capitalism without Failure
Reuters is reporting that regulators are instructing our TBTF banks to go beyond their Living Wills in terms of preparing for their orderly winding-down next time they get into serious trouble.
As an attorney, I work with the human equivalent of "bank living wills". The human version enables people (the blood-and-guts variant) to indicate their end-of-life preferences so that, if one day they lack capacity or are not able to communicate, the living will can be consulted and the individual's wishes may be carried out.The primary end-of-life choice for humans is whether they want their life to be prolonged as long as possible given medical technology, or whether they would opt, in certain situations, to avoid being kept alive using heroic medical intervention when their quality of life is determined to be seriously compromised. Humans must make decisions like that because they are ultimately going to die.
But bank executives know that banks never have to die. No matter how badly they are managed, no matter how much fraud they commit, no matter how often they are fined by the SEC, money-infusion and increased opacity is all that is needed to keep a failed institution from the graveyard of failed corporations.
It is ludicrous to believe that the biggest banks, when faced with a crisis that threatens their survival, will turn to their living will instead of to the politicians that they finance.
The real tragedy is that everyone knows that bank living wills are useless, and yet, we are continuing to build on this fantasy. Our leaders are choosing to gloss over structural weaknesses in every possible way so that actual constructive reform can be avoided. What would it take to create a system worthy of our trust, instead of attempting to convince the world to entrust their money to a financial system riddled with fraud, opacity, and accounting tricks? It would take shrinking TBTF banks down to a size where they are not perceived to threaten the world's economy, investigating the fraud leading up to the financial crisis, introducing hyper-transparency to the industry, and infusing personal accountability for executives in publicly-traded financial sector corporations.
If politicians were serious about tackling the issues raised by having banks that are systemically dangerous, they would begin by seeking ways to make those institutions small enough to fail, small enough so that their political power does not dictate who is electable, and small enough so that politicians are able to make decisions based on protecting American citizens.
Dodd-Frank is a disaster; it creates additional barriers to entry for small players, while barely being a blip in terms of compliance for the giant recidivist financial juggernauts. We need more competition, not less. Dodd-Frank is moving us in the wrong direction.
Bank living wills are only the answer if the question is, "What can we do to pretend that we are addressing the problem of TBTF banks?" Bank living wills are yet another puff in the elaborate and ever-expanding smokescreen that Tim Geithner, Ben Bernanke, and bipartisan legislators, have been diligently billowing in order to redirect attention from the real crux of the matter: Our financial system is deeply compromised and needs fundamental reform. We are getting everything but fundamental reform.
Where are Obama and Romney on this issue? If you want to vote for a Republican or a Democrat who is committed to taking steps to address our compromised financial sector, you are out of luck in 2012.*
See also:
Open Letter to the Chief Confidence Officer of the USA
Bill Black: Financial Sector Elites Continue to Commit Fraud with Impunity
Bill Black: Unless we Fix the Perverse Incentives in our Economy, We are Rolling the Dice Every Day
*****
*James Kunstler of Clusterfuck Nation is proposing a new party, called Reality. See Join-Up.
James can turn the ugliest of images into poetry. ~ Ilene
"In the vicious vacuum that national party politics has become, the Republicans and Democrats are already dead. They choked to death on the toxic fumes of their own excreta. They are empty, hollow institutions animated only by the parasites that feed on and squirm over the residue of decomposing tissue within the dissolving membranes of their legitimacy. Think of the fabled Koch brothers as botfly larvae and the Securities Industry and Financial Markets Association PAC (SIFMA PAC) as a mass of writhing maggots."
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Unions, especially SEIU, are people too! - Ned
Corporation is a legal construct. Therefore. all it takes is the legislative process to redefine what a 'corporation' is or isn't under the law. ilene, I now designate you a corporation, so STFU.
See how that works? In one stroke of the legislative pen, the federal government can by-pass the first amendment.
Thank-you, you brillant and "pragmatic" progressives.
If corporations are not people then quit taxing them as such! Customers of these corporations are paying the taxes. Corporations could care less about taxes except as how it effects them competitively compared to other like businesses. If you want to outlaw a corporation's ability to influence laws and politics, then get government off their backs. Business understands that as long as they can pass their costs forward those costs are of no importance. Its just another hidden tax that government escalates through divisive politics. We empower them to tax the provider of our goods and services like we won't ultimately have to pay them. Its stupid and it hurts us competitively internationally. We tax the shit out of US companies and then bitch about how they influence government to avoid taxes or that they up and leave. Of course, if they fail, they are just poor businessmen.
Morgan Stanley first up to bat for the next round of bailouts; Citi after them, and Bank of America third.
White House: found to be merely public relations front for corporations.
.
"Dodd-Frank is moving us in the wrong direction".
Only if you're TSTM (Too Small To Matter).
Reality party huh? If a new party had a chance at gaining a real foothold, it would be illegal. In fact, thru a complex miasma of federal, state, and local laws, it effectively is.
TPTB will never be brought down by anything except gold, silver and lead.
That corporations are people too is a scam played on sheeple. I wish I could locate the interview with the judges relative that never decided that was the law. Anyone that is interested though might contact ABFREE radio in Alston Brighton Massachusetts to see if they have a copy of Stephen Proviser, the Alston Carmudgeon's interview about the California railroad case that decided that corporations were to be treated legally as people. They weren't. The case was never decided in regards to that issue.
Revolutions must occur to restore law and order to an out of control system that threatens a planet's ability to sustain life.
We're there.
Turn it around, people are corporations. Henceforth, I shall assume a "limited liability" for all my actions, bitchez...
Actually, I have been a corporation for over 30 years.
When you look at the reality of the tax and liability laws, it's the only way to fly. There is a bit more work and initial expense involved up front, but the back-end payoff is more than worth it. Plus, it is easier to set up now than ever before. You, too, can become an LLC in no time at all. If you can figure out how to work for yourself, or to have your current compensation paid to your corporation instead of you directly, the 'opportunities' for savings expand dramatically. The game is rigged, but most of us have no choice other than to play. Your best bet is to learn the rules....and the penalties, then try to play like the big boys.
please elaborate, or give some specific examples 11b40.
I have a type S corporation ... any particular ideas?
You can control cash flow/income and virtually anything that you can use in your business becomes tax deductible and/or depreciable.
You get favorable treatment for healthcare expenses and a wider, more elaborate variety of retirement programs. How do you think Mitt Romney has an IRA worth $85 million?
Talk to your accountant. There are a multitude of ways to adjust your income so that your salary is minimal and still maintain decent personal cash flow. The more you have, the more ways there are to shelter it.
thanks!
about 15 years for me. Yes, working for yourself is the only way to have some control of capital flows.
I laugh when the big boys threaten to collapse the system if we don't bail them out. Being in agriculture, I know I'll eat, so I often want to say, go ahead, pull that trigger. We are at another point where big rule changes are going to be proposed, I can feel it.
Are Unions people? Jus axin.
No, apparently.
Neither is the New Yok Times or the Tides Foundation...oh, noes ;-)
Not so sure about Jimmys version of reality.
The only Living Will the Banks and The Fed should have is: GOLD
i the bank declare that all the losses are public and the profits are ours..lol
" the bank declare that all the losses are public and the profits are ours..lol"
That is in a nutshell the agreement you sign when you open a bank account, except the lol part, they laugh behind closed doors......for now.