Why would Wall Street’s flagship banks so flagrantly break the law and dispossess North America’s middle class — the better-paid sector of the working class — from their homes?
The answer comes from the inner workings of capitalism, today’s capitalism in particular.
One of the Bank of America employees who testified in Massachusetts (see story above) put it clearly: “It was our job to maximize fees for the bank . . . by any means that we could.”
She was explaining why the bank denied mortgage refinancing under the federal government’s HAMP program at 2-percent interest. BOA wanted to push borrowers into BOA loans at 5 percent, maximizing its profits.
Maximizing profits is an underlying law of capitalism and the touchstone for every corporate activity. If a company fails to maximize profits, it dies or is consumed by its competitors.
In times past, that dynamic sparked the industrial revolution and the rapid growth of humankind’s productive powers. Today, it has become a cancer, feeding on the mass of ordinary people and impeding our healthy development.
That’s because the technological revolution that the capitalist era has spawned is raising production to a new level. More and more, the backbreaking work we have done with machines is being replaced with work by the (robotic) machines themselves.
But what is a good time for humankind is an end time for capitalism. When new technologies replace workers, and people can’t find jobs, there are fewer and fewer with the money to buy. Capitalist profit can’t be realized.
This is being played out in flesh and blood across North America and the rest of the world today. It is why the megabanks have become a cancer sucking their profits out of the middle class.
As institutions, banks are necessary to any economy, including our transitional economy. But they do not have to be capitalist banks, maximizing profits by feeding on the people.
Instead, banks now work best as public utilities — of, by, and for the people. The new era demands that we nationalize the banks, either outright or by creating our own public banks, such as the century-old Bank of North Dakota.
Nationalize the banks!
