Earlier this week, the inspector general for the Troubled Asset
Relief Program, a k a, the bank bailout fund, released his report on
the 2008 rescue of the American International Group, the insurer. The
gist of the report is that government officials made no serious attempt
to extract concessions from bankers, even though these bankers received
huge benefits from the rescue. And more than money was lost. By making
what was in effect a multibillion-dollar gift to Wall Street, policy
makers undermined their own credibility - and put the broader economy
at risk.
Ten years ago, the Republican-controlled Congress - egged on by
that champion deregulator, former Texas Sen. Phil Gramm - passed
legislation that arguably did more to plunge the United States into
our crippling great recession than anything else: It repealed the
Great Depression era's Glass-Steagall Act.
Then on Nov. 12, 1999, an acquiescent Democratic president, Bill
Clinton, signed the repeal into law.
When it comes to understanding the real economy and the struggles of
ordinary Americans, Senator Bernie Sanders always seems to be ahead of
the curve and fighting like hell for Congress to show leadership and be
responsive.
WASHINGTON - Big banks took a beating from government on
Thursday, both in the U.S. Congress where lawmakers backed tougher
industry rules, and from U.S. and UK regulators who moved aggressively
to restrain bankers' pay.
The Dow Jones Industrial Average has topped 10,000 for the first time
in a year, as JPMorgan Chase reported massive profits in the third
quarter. Meanwhile, the Wall Street Journal is reporting that
major US banks and securities firms are on pace to pay their employees
about $140 billion this year—a record high. But on Main Street,
foreclosures are also at record levels, and the official unemployment
rate is expected to top ten percent. We speak to former bank regulator
William Black, author of The Best Way to Rob a Bank Is to Own One.
WASHINGTON - US banks and securities firms could pay a record 140 billion dollars to its staff this year, a rebound in compensations that comes despite regulatory scrutiny of Wall Street pay culture, a report said Wednesday.
Workers at 23 top investment banks, hedge funds, asset managers and stock and commodities exchanges can expect to earn even more than they did at the peak year of 2007, according to an analysis by the Wall Street Journal.
It studied securities filings for the first half of 2009 and revenue estimates through year-end.
ISTANBUL - The head of the U.S. Federal Deposit Insurance
Corp. said on Sunday that she wanted to end the "too big to fail"
doctrine and shrink the shadow banking system that operates outside the
reach of regulators.
FDIC Chairman Sheila Bair, speaking to the Institute of
International Finance meeting here, said a U.S. proposal to create the
authority to shut down failing systemically important financial firms
may need to be extended to insurers and hedge funds.
The Madison-based Center for Media and Democracy recently gave
its first-ever "Golden Throne Award" to the president and CEO of
the American Bankers Association, Edward Yingling.
Suffice it to say that Yingling wasn't thrilled.
The large number of people who protested against Barack Obama's healthcare plan in Washington last week drew an enormous amount of media attention.
Clearly some of the leaders are certifiably crazy, questioning whether
Obama is an American and likening him to Hitler.
In the grim period that followed Lehman's failure, it seemed inconceivable that bankers would, just a few months later, be going right back to the practices that brought the world's financial system to the edge of collapse. At the very least, one might have thought, they would show some restraint for fear of creating a public backlash.
But now that we've stepped back a few paces from the brink - thanks, let's not forget, to immense, taxpayer-financed rescue packages - the financial sector is rapidly returning to business as usual.
