[Marxism] Roubini's Latest (10/6) on Systemic Meltdown

[Aaron Aarons]

This Roubini character wants the public to guarantee the non-insured bank deposits, which usually means those over $100,000 in a single bank. Since upper-middle-class people with, say, $500,000 in savings usually split it up among several banks with under $100,000 in each, this guarantee will mainly protect the deposits of multi-millionaires. It will also, like the other bailouts, transfer wealth from semi-proletarians and the lower middle class to the upper classes, and will hurt even proletarians by providing an excuse for further cuts in social spending. In California, the Governator has already vetoed the continuation of the annual Renter's Assistance payment (of up to $347 for the lowest-income people) and also vetoed cost-of-living increases for SSI recipients.

If the government wants to stop a run on the banks by uninsured depositors, it could declare a partial bank holiday, limiting the amount that could be withdrawn by each such depositor. But that wouldn't accomplish the main purpose, which is to transfer wealth from the poor to the rich.

 - Aaron

>Date: Mon, 06 Oct 2008 14:04:02 -0400
>From: Jay Moore <pieinsky at igc.org>
>
>  The Fed keeps on wasting time while the mother of all bank runs is
>  underway
>
>Nouriel Roubini
><http://www.rgemonitor.com/roubini-monitor/bio/2/nouriel_roubini> | Oct
>6, 2008