THE BLOG
10/24/2008 05:12 am ET Updated May 25, 2011

U.S. Monkeys Guard Financial Bananas

America's financial 9/11 was self-inflicted as a result of by a stupid regime which believes in the dogma of the jungle. Other capitalist countries have very stable, well organized financial sectors and growing economies. This nightmare happened because in the United States the monkeys guard the bananas.

Here is my take on the mess from my blog in the Financial Post:

Protecting the American people from terrorism should include fighting internally, but apparently Homeland Security didn't realize or stop attacks against the economy inside New York City's downtown office towers by rogue traders.

Now Wall Street is no more -- that cavernous intersection of greedy human nature and the uniquely Republican dogma of deregulation or "invisible hand-ism" or financial hockey without referees.

Weekend news that Goldman Sachs and Morgan Stanley will become "holding companies" is simply a finesse intended to disguise the fact that all five Wall Street firms are now gone. And deserve to disappear. Of course, the victims are the taxpayers who, Treasury Secretary Hank Paulson informed yesterday, will be on the hook for $700 billion. Others put that tab at $1 trillion or $2 trillion if the contagion keeps spreading despite increasing amounts of backstopping.

Frankly, lawsuits and handcuffs and RICO prosecutions are in order, but let's see if this terrorist attack results in mass arrests, full body searches, shipments to Gitmo or pinstriped stints in the slammer. I think RICO's a fine idea and taxpayers should be able to seize all the assets of all the managers, directors and executives who oversaw this conspiracy of recklessness for years. The money shot for me would be front-page photographs of government-induced foreclosures in Palm Beach and Palm Springs of Wall Streeters' mansions, stock portfolios, Porches and private jets.

But don't hold your breath because the monkeys guard the bananas in the United States and always have. Take Mr. Paulson who, frankly, would have a major conflict of social interest in taking tough measures against the culprits.

After all, he swam in those charmed circles. His remarkable career has spanned from a stint in the 1970s as assistant to the Nixon sidekick, John Erlichman (remember Watergate?), to a business career ending in his ascension as CEO and Chair of Goldman Sachs. This made him the Czar of the Street in his day between 1999 and 2005 when he answered the call to public service and became Bush's Treasury Secretary.

He cashed in his Goldman options for a staggering $700 million to go to Washington which makes him the best market-timer in the history of Wall Street, I reckon.

Paulson will leave along with the rest of the Bushies, having bailed out problems he helped create, and not a minute too soon. The Bushies won't attack their base because after they leave Washington they will be hanging out in Palm Beach and Palm Springs with the gangs that got away. The only hope for justice would be to bring Eliot Spitzer out of mothballs or purgatory or wherever he is these days.

Frankly, Bush and "his brains trust" should be held accountable for this 9/11 attack on America's financial system. They let the capital and derivatives nonsense grow until they became the "financial weapons of mass destruction", as Warren Buffett astutely described them two years ago.

Americans must not buy the following myths:
1. That regulation was the cause of this mess. It was the opposite.
2. That these huge meltdowns are because America is the world's only free enterprise system.
3. That financial stability is un-American, anti-democratic and socialist.
4. That ordinary Americans, with their greediness, caused this problem.
5. That there were no shenanigans going on and this is just what happens in markets.