Bank Bailouts Without End

By:  William F. Jasper
02/18/2014
       
Bank Bailouts Without End

In 2008, many banks were deemed “too big to fail,” and government (taxpayers) bailed them out. Since then, bankers and bureaucrats have insisted the money keep flowing.

And that is called paying the Dane-geld;
But we’ve proved it again and again,
That if once you have paid him the
    Dane-geld
You never get rid of the Dane.
Dane-geld, by Rudyard Kipling

For more than 250 years — from the end of the 8th century to well into the 11th — wave after wave of Viking Danes, first as sporadic, raiding pirates, and then as full invading armies, crashed down on England’s shores like a hurricane. So fierce were these pagan Norsemen and so utterly destructive in their murder, mayhem, pillage, and plunder that King Ethelred the Unready, a weak and irresolute monarch, decided to buy them off rather than fight them. In 991, he paid Olaf Tryggvason of Norway and his invaders 10,000 pounds of silver in tribute — the first Danegeld — to depart England.

It was, wrote John Clark Ridpath (in his nine-volume History of the World, published 1894) “the fatal expedient of purchasing a peace.” Not only did the Danes soon return, but the ease with which they had extracted the first tribute encouraged them to up the extortion ante. What’s more, they brought additional gangsters. In 994, Olaf teamed up with King Sweyn Forkbeard of Denmark for a joint foray into England. This time they exacted 16,000 pounds of silver from Ethelred’s kingdom. But successive Danegelds escalated to 24,000, then 36,000, and then 48,000 pounds of silver. These tributes had to be extracted through ruinous taxes that devastated Britain as much as did the fire and sword of Viking raids.

Earlier generations of British and American schoolchildren familiar with this bloody epoch of English history, as well as Kipling’s poetry, would not have failed to see the Danegeld lesson in the recent bailouts of the Wall Street pirates. The warnings that the troubled banks were “too big to fail” echo Ethelred’s excuse that the Danes were too big to fight. And the pledge that the bailout would be a one-time fix has proven as false as the Viking promises to ravage England no more.

The 2008 mortgage crisis, which morphed into a global financial crisis, initiated an ongoing series of Danegeld payoffs to some of the biggest gold-plated piratical firms on the planet: Goldman Sachs, Citigroup, Morgan Stanley, Merrill Lynch, JPMorgan Chase, HSBC, Bank of America, Barclays, Royal Bank of Scotland, UBS, Wachovia, AIG, Credit Suisse. Opinion polls have repeatedly shown that the American public have opposed the government bailouts. Even during the confusion, chaos, and panic of 2008, a majority of Americans (55 percent, according to a September 2008 Times/Bloomberg poll) opposed sticking taxpayers with the bank bailouts. Since then, public outrage and opposition have grown steadily, as details of the murky deals have become more widely known. By April of 2012, a Harris poll found 84 percent of respondents opposed to further bank bailouts. But Wall Street and the Fed, and their kept politicians in Congress, don’t listen to the American people, of course.

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Photo: AP Images

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