Banking Bandits Get Their Reward

By now everybody must know that the top banking executives responsible for our economic meltdown have no shame. Otherwise they would not have dared give themselves such hefty bonuses as a deeply perverse reward for actions that caused millions of Americans to lose their jobs and homes. The $33 billion that the executives of the nine banks bailed out with taxpayer funds paid themselves in 2008 is all one needs to know about the depth of their amorality.   

Rewarding Bad Actors

Americans are angry at Wall Street, and rightly so. First the financial industry plunged us into economic crisis, then it was bailed out at taxpayer expense. And now, with the economy still deeply depressed, the industry is paying itself gigantic bonuses. If you aren’t outraged, you haven’t been paying attention.

But crashing the economy and fleecing the taxpayer aren’t Wall Street’s only sins. Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view.

Wall Street's False Armistice

The best names in Wall Street banking have announced victory. Their crisis is over, back to business as usual. So why isn't the Obama White House celebrating this good news? Because this may not be a lasting peace for the president and his lieutenants. They are left standing in the mudhole of financial ruin, still surrounded by the failing economy and gradually losing their control over events. The leading bankers worked out a rare deal for themselves that essentially says to the government in Washington "heads we win, tails you lose."

Break the Banks, for the Good of the People

With all the talk of "green shoots" of economic recovery, America's banks are resisting efforts to regulate them.

Betting the Fed

In the banking panic of 1907, J. Pierpont Morgan personally organized a syndicate of financiers to provide $25 million to collapsing banks. It was this panic that finally persuaded Congress in 1913 to create the Federal Reserve System -- not a single central bank but 12 regional reserve banks and a weak board of governors in Washington. The New York Federal Reserve Bank, with its intimate links to Wall Street, quickly became the reserve system's most influential player.

The GOP's Feigned Outrage

Those who followed news coverage of the "tea party" protests last month will recall that one target of the partiers' ire was the TARP bailout of the banking system -- a policy of the Bush administration that President Obama has carried on.

And yet, in a television interview last month, we find no less a representative of the late administration than former Vice President Dick Cheney endorsing the protesters' accusations with what is, for him, considerable enthusiasm. "I thought the tea parties were great," he told Fox News's Sean Hannity.

Will This Financial Crisis Lead to True Reform or Plunder without End?

NEW YORK -  It is almost axiomatic to argue that renewal comes out of chaos. And reform and change are born in crisis. 

The financial meltdown of 1907 led to the formation of the Federal Reserve Bank. The Crash of '29 ushered in the New Deal, the FDIC, the SEC, The Glass-Steagall Act, etc. Even the disaster at Enron permitted new statutes requiring more transparency like Sarbanes Oxley. And now this greatest of great recessions is leading to a new wave of financial regulation. The public is already said to believe recovery is just around the next corner. 

Waterboard the Fed?

To my knowledge, no one has proposed waterboarding the US Federal Reserve. But the hostile reaction of much of the country's political leadership to suggestions that the Government Accountability Office (GAO) audit the Federal Reserve Board might lead people to think that waterboarding was being called for.

Our Loss Is BlackRock’s Gain

How much do you know about the BlackRock hedge fund? Better bone up fast, now that the folks at BlackRock are calling the shots in the government's trillion-dollar bailout program. As both The New York Times and The Wall Street journal reported on Tuesday, BlackRock execs are now directing key elements of the government program at a time when they stand to reap great profits from the fallout of a problem they helped create. 

Money to Burn: Was the Bank Bailout Really Necessary?

US Treasury secretary Timothy Geithner says that we don't need to bail out the banks anymore based on the results of his stress tests. We should follow up quickly on his assessment and start shutting the special Fed lending facilities enjoyed by the banks, the FDIC loan guarantee programme and the AIG slush fund.