(Neil Hannon of the Divine Comedy performs “The Complete Banker” – as cutting a comment on the recent recession as I’ve yet heard.)
The Sioux Falls Argus Leader is not known as an organ of the progressive left, even by South Dakota standards – check out their coverage of SD’s widening income gap as opposed to, say, Nathan Johnson‘s reportage at the Yantkon Dakotan & Press. (Anything Nathan writes for the YDP is worth reading, by the way – and he’s a grandnephew to SDPJC board member Fr. Leonard Kayser, unsurprisingly enough.) They’re more than happy to report the “news” that SD banks are seeing higher profits:
U.S. banks are ending the year with their best profits since 2006 and fewer failures than at any time since the financial crisis struck in 2008. They’re helping to support an economy slowed by high unemployment, flat pay, sluggish manufacturing and anxious consumers.
As the economy heals from the worst financial crisis since the Great Depression, more people and businesses are taking out — and repaying — loans.
In South Dakota, banking officials are more cautious though quick to say the downturn in past years also was not as steep. Net income increased through the third quarter of last year, along with deposits, and fewer loans were considered at risk for not being repaid.
“As a whole, I think it did pretty well all things considered with the drought and everything,” said Bret Afdahl, director of the state division of banking.
But low interest rates continue to make it difficult for banks to eke out a profit and, as agriculture thrives, loan demand in that industry is soft.
Poor banks, trying to “eke” out a profit in the wake of a crisis that they and their big brothers in New York effectively created. Meanwhile, income inequality has only worsened over the past decade, in South Dakota as much as anywhere: the bottom 20 percent of South Dakotans have seen their income fall by 12.5 percent over the past decade-and-a-half, compared to a 25.7 percent rise in income for the top 20 percent. And as Margrit Kennedy, author of Occupy Money, has demonstrated, as much as 40 percent of every dollar we spend is eaten up by interest on loans taken out somewhere along the production chain. When banks are capturing that much of the social wealth, it’s no wonder we’ve seen the hegemonic rise of finance capital in the past thirty years – and no wonder that North Dakota, with the only state-run central bank in the country, weathered the recent financial crisis much better than most.
So when the Argus Leader reports that banks’ profits are rising again, what they should be telling is us that as the economy recovers from a bank-created recession, those same banks are resuming their parasitic capture of up to two-fifths of all social wealth. But you can’t count on the local papers for that half of the story.