Love the analogy! The Obamians seem bewildered that the country is not more thankful to its government for having prevented another Great Depression. They saved the banks, and in doing so, they saved the economy from a once-in-a-hundred-year storm. And they proudly point out that all the money given to the financial sector has been more than repaid. But in making such claims, they ignore some critical realities: It was not something that just happened. It was the result of reckless behavior, the predictable and predicted consequences of deregulation and the inadequate enforcement of the regulations that remained, of buying into the mind-set of the 1 percent and the bankers—for which Geithner and his mentor, former White House economic adviser Larry Summers, had more than a little culpability. It was as if, after an accident caused by drunk driving, in which the last drink was served by the police officer on duty, the drunk driver was put back into the driver’s seat, his car rushed to the repair shop, while the victim was left to languish at the scene of the crime. The repayment itself is, at least in part, the result of a game that would do any con man proud. The government, under the auspices of the Federal Reserve, lends money to the bank at a near-zero interest rate. The bank then lends it back to the government at 2 or 3 percent, and the “profit” is paid back to the government in repayment of the “investment” the government made. Bank officials, meanwhile, get a bonus for the hefty returns they have “earned” for the bank—something a 12-year-old could have done. This is capitalism? In a true rule-of-law world, a drunk driver would have to pay for not only his own repair costs but also the damage he has inflicted—in this case, the cumulative loss of GDP, which now amounts to more than $8 trillion, and which is mounting at the rate of $2 trillion a year. The banks recover, while the typical American’s income plummets to levels not seen in two decades. It is understandable why there might be some anger in the body politic...
Posted on: Mon, 30 Jun 2014 04:16:40 +0000
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