Thread by @bansisharma

1. The Biggest Con in America

The biggest and longest running con ever pulled on the American people is for the politicians to hide the fact that Wall Street is federal-govt-in-disguise. By making WS the bête noire, politicians escape the consequences of their own malfeasance.

2. The phrase Wall Street, as used by politicians, is synonymous with Big Banks. And what are the big banks if not an extension of the Federal Reserve. In their essence, big banks are indeed an extension of the Federal Reserve.

3. There is absolutely nothing the big banks do that is not implicitly or explicitly approved by the Fed. Banks don't manufacture anything. They make money by creating and processing money. And only the banks can legally create money, absolutely nobody else can.

4. How is it that banks and only banks can create money? Because the Fed delegates its power to create money to the banks via what is known as a 'banking charter.' No other corporation has a banking charter. Only banks do. And 'banking charter' is their entire business model.

5. That's why banks are not exactly what we call 'private enterprise.' They are fundamentally, in their very being and existence, a public-private partnership in which the Fed calls all the most important shots. In essence, the Fed outsources some of its tasks to the banks.

6. Of course bank employees and leadership can misbehave, just like govt employees and govt leaders can misbehave. And when they do, they must be held to account. But this notion that somehow the banks do nefarious things, unbeknownst to or unapproved by govt, is so much hooey.

7. The Fed didn't bail out banks in 2008-2009. The Fed bailed itself out. Banks were not given a choice in whether they accepted the bail-out funds. They were mandated to take the money. Some banks didn't even want the funds. They were muzzled, for the sake of 'the greater good.'

8. And when it comes to banking, 'the greater good' is always defined by the Fed, not the consumer banks. The financial crisis was brought on by decisions made by the Fed and Congress.

9. Of course the bank executives were complicit in taking unwise risks, but those risks were approved by the federal regulators and encouraged by Congress.

10. Banks were forced to take imprudent risks by lending to borrowers who they knew were likely to default, because Barney Frank, the powerful Democrat and chairman of the House Financial Services Committee, wanted to 'roll the dice.'

11. Banks like Citibank created all sorts of risky financial derivatives which the regulators should never have approved, but they had hired Robert Rubin, Bill Clinton's Treasury Secretary, as their chief risk officer, so the federal regulators waved their schemes through.

12. People complain that nobody from Wall Street went to jail in the aftermath of the financial crisis. Now you know why. Truth be told, if any cases were actually tried in a court of law, the discovery process would have laid bare the 'big con.'

13. The people ultimately responsible for the financial crisis were in govt, with accomplices in the banks for sure. That's why the politicians deflected blame by jawboning the banks while at the same time having the Fed inject untold billions of profits into the same banks.

14. It was necessary to bail out the banks for the sake of our national economy. It was necessary to a avert a bigger disaster brought on by the financial crisis disaster that should and would never have happened if the Fed and leaders in our govt were minding the store wisely.

15. I didn't write this thread to call out heroes and villains per se, because there are many of each, both in govt and in private industry. My point is that people shouldn't fall easy prey to political rhetoric.

16. Always demand more explanation than politicians are willing to offer. And while it's fun to joust politically to score points in a friendly banter, know deep down that in the larger scheme, things are seldom black and white. Deeper you dig, grayer it gets.

The End