These days there are a lot of scandals to rant about.
To me, the biggest scandal ever, the event that makes me feel like we are
living in a Matrix dream happened a year ago. It is the Libor scandal (London Interbank
Libor is a ratings system run by the worlds largest banks. These banks post the interest rate they are actually paying or should be paying to borrow money from another bank. Those numbers are gathered together and averaged to give banks around the world a benchmark rate to set their interest rates by.
It's like setting the wholesale price for borrowing money. None of us would ever get this rate but the rate we do pay, is often based on these numbers.
Wikipedia is here to help explain:
banks are supposed to submit the actual interest rates they are paying,
or would expect to pay, for borrowing from other banks." - source
It turns out the banks were making side deals to report their numbers at
certain levels so that other banks could make a profit or make their
own banks business look like it was in better shape than it actually
"Since mortgages, student loans, financial derivatives, and other financial products
often rely on Libor as a reference rate, the manipulation of
submissions used to calculate those rates can have significant negative
effects on consumers and financial markets worldwide." - source
Let's hear that again "consumers and financial markets worldwide". This is supposed to be an honourable game. Rate fixing is tantamount to loan sharking. Keeping the little guy down. Squeezing every last penny out of them. With interest.
When I first heard about how Libor was calculated and used, I thought I must not have heard it correctly. But I had. A bunch of financial elites post the interest rate they are paying and they are supposed to give an "honest" answer. Nobody checking to make sure they are being "honest" and huge gains if they tell a lie here and there.
It turns out they are simply pulling the numbers from their hind quarters (to put it politely). In fact, it is worse than that, they were (are) intentionally manipulating the numbers to suit their own best interests.
Whenever we hear from the 'tinfoil hat set' about, whatever conspiracy is tickling their fancy that day, it invariably involves a sentence like "and the worlds banks are colluding to rip us off". It turns out they are 100% right and very little is being done about it.
The game is rigged and the only reason we aren't upset about it, is because most of us can't get through an explanation of what happened without nodding off. It is the most boring lie ever told.
We still set our interest rates by this number and have yet to change any regulations in order to prevent fraud from happening again. We don't even know the full extent to which this fraud was committed.
A few fines have been handed out. A few big names have resigned. A few admissions of guilt to felony wire fraud charges by the banks who were caught.
No banks in the U.S. have been fined or charged as of this date.
Nobody has gone to jail.
Nobody has had money returned to them because tracing that would be virtually impossible.
Can it be prevented in the future? A number of recommendations have been made that will make it more difficult but it is hard to say how long this has been going on, or if it can be stopped.
Yet it is contributing to the decay of capitalism. It shakes it to its core. It may very well be the lie that bores us to death.