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Banks Are Now Incentivized to Do the Wrong Thing

Once upon a time, banks tried to attract the deposits of depositors by providing banking services to them. Such customers were also potential borrowers, for homes, automobiles, education, or private businesses. Thus, banks could profit from both ends of the customer relationship.

All this changed, when banks received large amounts of "free" money, courtesy of the U.S. government. Because this was the case, banks no longer needed the funds of "small," demanding depositors who required large amounts of servicing. Instead, banks saw such customers as obstacles to their growth and prosperity, except when such people were "good" enough to set themselves up as "marks" to be exploited.

Serving customers is now a secondary operation. Instead, banks use the money that they extract from customers to finance high-risk high reward trading operations in risky securities, such as subprime loans, of the banks' own creation.  And when they lose, as some inevitably do, they go back to the same customers for more funding in the form of bailouts for the crises that THEY caused. Privatize the gains and socialize the loses.

Banks don't want "free" customers that will fight for their rights.They want a class of helots that will do their bidding because they are beholden to them. For them, to have large parts of the American public head over heels in debt is the ideal situation. These debtors are hostages to the banks, who them play dangerous games with subprime paper, CDS, CDOs and squared, etc.

And quite a few banks do, in act in the way that they have been incentivized, as discussed above.