robert hockett

On today’s Lever Time, David Sirota sits down with law professor and policy advocate Robert Hockett and former FDIC attorney Todd Phillips, to explain “The Great Bank Robbery of 2023” — a financial grift that very well could be impacting you. The three explore how this complicated bank swindle has become so prevalent, what federal regulators could do to stop it, and how consumers like you can protect yourself from the scam. 

The grift goes like this: When you deposit your money at a bank, they should pay you interest for your money. That’s because they make money off of it: Banks lend out your deposits for mortgages and small business loans, or deposit money with the Federal Reserve — all of which generate a much higher interest rate return for the banks. The difference is profit.

Until recently, banks would pass along increased interest on these efforts to its customers. But over the last two years, as the Federal Reserve has hiked interest rates to combat inflation, banks haven’t been sharing the wealth. 

Today, the gap between the profit banks generate by lending out those deposits and what they pay their customers is the largest it’s ever been: On average, banks are paying its depositors 0.4% interest, while reaping anywhere from 5 to 7 percent interest via lending. This has resulted in one of the largest upward wealth transfers in the modern economy, from customers to bank executives.

A transcript of this episode is available here.

Links:

• The Great Bank Robbery of 2023 (The Lever, 2023)
• BofA profit surges on interest income, surprise investment banking gain (Reuters, 2023)
• TreasuryDirect.gov

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Financial and economic regulation expert Bob Hockett discusses how the November 2022 midterm elections might affect the Biden Administration’s ability to implement its economic policies; and how to interpret rising inflation in light of record corporate profits. 

Season 2 Episode 13: Creation of a National Infrastructure Bank | 0:44
The US Has Had Four National Infrastructure Banks  | 1:17
Crumbling Infrastructure Hurts Competitiveness  | 2:30
Rep. PPH Interview with Economics Experts on the Proposal for NIB  | 4:24
Alphecca Muttardy, Board Member, NIB Coalition  | 4:53
What Is an NIB and Why Do We Need One?  | 5:00
Projects that Could Be Funded by the NIB  | 5:19
Infrastructure Investments Are Good for the Economy  | 8:48
Roosevelt's RFC Was Infrastructure Bank  | 11:28
Nationwide Rural Broadband Funded by the NIB Is Modern REA  | 11:36
Muttardy on the Scope of NIB Projects  | 12:27
The Scope of the REA and Its Impact on Rural America  | 13:01
'It Is a Disgrace that We Have Houses in America with No Running Water'  | 13:35
Chinese NIB Is Building a Nationwide Water Grid.   | 13:49 
NIB Projects Could Help Arizona Farmers  | 14:12
Public Private Partnerships (P3s) vs NIB  | 14:29
Arizona Water Initiative Allocates $750 mil in P3s for 'Water Augmentation'  | 14:37
Keep Public Infrastructure in Public Hands. Water Is a Public Good.  | 15:09
Ellen Brown, Founder, Public Banking Institute and Author  | 15:52
'P3s Want Profits. NIB Is Basically a Bank at Cost.'  | 15:56
Who Can Invest in the NIB?  | 16:40
Muttardy: How the NIB Would Be Capitalized?  | 17:08
Brown: Individuals Can Invest in the NIB  | 18:37
Crumbling US Infrastructure Hurts Competitiveness  | 18:57
China Invests 8% of GDP in Infrastructure. US Invests 2.4%.  | 19:35
Putting People to Work Building Infrastructure Will Rebuild the Middle Class  | 20:00
Given Current Economic Uncertainties, How Would Our Strategies Change if We Had NIB Now?  | 20:36
Dr. Robert Hockett, Edward Cornell Professor of Law and Finance at Cornell University  | 21:45
The US Relies Too Much on Private Sector Initiative  | 21:51
If Your Motive Is Profit Maximization, It Is Not in Your Interest to Prioritize the Public Good  | 22:15
Brown on Inflation: Shortages Are to Blame  | 23:28
COVID Relief Money that Was Sent to the Banks Is Just Sitting There Unspent  | 24:05
COVID Relief Money that Went to People Is Long Gone  | 24:28
'People Are Spending Now But They Have Less Money than Before COVID'  | 24:52
'There's Not a Lot of Demand Competing for the Goods. The Problem Is Shortages.'  | 25:11
The American System Model of Building Infrastructure to Promote Growth & Production  | 25:19
Keep the Farmers and Small Businesses  in Business  | 25:30
Hamilton: 'This Bank Is to Be Used for Infrastructure, Manufacturing and Development of the Economy'  | 25:56
'We've Had an Infrastructure Bank Before. The Problem Is Political.'  | 26:33
'If the Money Goes to Productive Purposes -- Things that Do Pay Back -- then You Have a Sustainable System.'  | 27:06
Muttardy: 'Policy Banks' Are Investing Money in the Most Productive Place  | 27:52
The US Needs a Long-Term Infrastructure Plan  | 28:29
What Are Common Objections to NIB?  | 29:31
Muttardy: The NIB Has Checks and Balances as Well as Transparency  | 29:59
NIB Will Have Engineers to Help Local Governments Design Efficient Systems  | 30:37
All NIB Loans Are Transparent for Public to See  | 31:42
Who Owns the Infrastructure Built with NIB Loans?  | 32:02
Hockett: Who Owns the Infrastructure Depends Upon the Project  | 32:41
Muttardy: Most NIB Loans Will Go to Public Entities who Own their Infrastructure  | 34:03
To Relieve Bottlenecks, NIB Can Make Private Sector Loans  | 34:30
The NIB's Role in Affordable Housing  | 35:35
Hockett: Historical Perspective on Housing  | 36:19
And more...