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Bailouts helped the rich get richer
ByOctober 17, 2009
It wasn’t supposed to work this way: Taxpayers bail out huge financial institutions and those bailouts help the institutions get richer while average Americans get poorer.
But that’s what happened.
Wall Street titans are richer than ever and the banks on the verge of collapse just a year ago are now readying huge bonuses for the executives to run them.
And they have Washington to thank for their continued growth in wealth.
Reports The New York Times:
Even as the economy continues to struggle, much of Wall Street is minting money — and looking forward again to hefty bonuses.
Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes?
It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system — reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions’ debts — helped set the stage for this new era of Wall Street wealth.
Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder — a benefit of less competition after the failure of some investment firms last year.
So even as big banks fight efforts in Congress to subject their industry to greater regulation — and to impose some restrictions on executive pay — Wall Street has Washington to thank in part for its latest bonanza.
“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending,” said Gary Richardson, a research fellow at the National Bureau of Economic Research. “But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.”
6 Responses to Bailouts helped the rich get richer
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Carl Nemo
October 17, 2009 at 11:30 pm
“All of this is facilitated by the Federal Reserve and the government, who really want financial institutions to get back to lending” …extract from NY Times article
Who are they kidding? The guys running the Fed and the U.S. Treasury are all cubs from the same wolf pack; ie., Goldman Sachs, J.P. Morgan et al. including economic theorists from academia who support their inflationary money schemes. I think people will enjoy reading what I consider to be the most wigged out of economic theories and the associated triage for an economic collapse; ie., run the printing presses along with robbing the taxpayers of everything they possibly can in order to support the pack and to serve the directives of shadowy Alpha male characters sitting on the board of the BIS, Bank of International Settlements headquartered in Basel, Switzerland; ie., the central banker’s banker.
http://en.wikipedia.org/wiki/Bernanke_Doctrine
http://en.wikipedia.org/wiki/Bank_of_International_Settlements
We basically have criminals running the world’s central banking system all with the blessings of the politicians who are summarily directed to appoint them to such positions.
There’s an old saying concerning money: “money migrates to where its treated best”
So the making of obscene lucre at the expense of the unwashed masses means nothing to the banker. It’s simply money and of course there’s no law against making as much as you can in a capitalist paradigm, now devolved into a “pirate capitalist” variant. They employ an army of lawyers to make sure they are always operating within the laws they’ve paid crimpols to create in order to both enfranchise and protect them from prosecution.
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“Give me control of a nation’s money and I care not who makes the laws.” …Mayer Amschel Rothschild 18th century founder of the Rothschild banking dynasty
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Carl Nemo **==
bryan mcclellan
October 18, 2009 at 1:37 am
Loan Sharks. Fill the pool with honest regulation, watch for drowning, and prosecute off shore dalliance.
bogofree
October 18, 2009 at 10:57 am
Why complain? I also look at disasters as potential money makers and the financial meltdown was a classic. When Bear-Sterns and Lehman Bros. went belly-up just moved stuff around for protection. With bailout I & II the focus was clearly on the financial markets so go into buy mode on devalued financials. Just follow the money trail and you will make money. Morgan Stanley, Citi, AIG, ABK and on and on. Take a look at them as most are far in excess of 100% over last several months. Gotta think like a crook. These characters are no different than some punk holding up a 7-11 for $20 worth of Twinkies only they use a pen instead of a gun and go to Wharton and HBS instead of the “mean streets.”
Carl Nemo
October 18, 2009 at 12:18 pm
“no different than some punk holding up a 7-11 for $20 worth of Twinkies only they use a pen instead of a gun and go to Wharton and HBS instead of the “mean streets.” …extract from post
Great imagery bogofree. I’m sipping my Sunday AM cup of joe and damn near snorked it up through my nose laughing… : )
Carl Nemo **==
DejaVuAllOver
October 19, 2009 at 8:39 pm
Your post was pretty spot-on dead-nuts accurate, too, Carl. Thanks both. I’m beginning to think these guys aren’t descended from apes, but rather from crocodiles or sharks. Intelligent, sort of, but only in a pathological sociopath kind of way. As evidence I would submit as exhibit A.) any picture of Larry Summers.
griff
October 19, 2009 at 9:47 pm
Record profits and huge bonuses abound on Wall Street while I stand behind grandpa at the checkout, counting change out on the counter for bread and milk. What a disgusting orgy of lavish excess these criminals enjoy while we beg for the tiniest scraps from the banquet table we ourselves have provided them.
But don’t worry – some other savior will come along and whisk us away to neverneverland on the wings of angels and cherubs while trumpets sound in triumphant extasy throughout the land.