Time magazine's cover story this week titled "What's Still Wrong with Wall Street," by Allan Sloan, is a remarkable indicator of where the public stands on the recent obliteration of the economy by a gang crooked financiers and speculators. It shows that even the corporate media is now making the connection that millions of Americans have already made, namely, that a criminal gang of rich white guys in New York did some extremely reckless things with the nation's collective wealth and the middle class got clobbered.
The recent revelations about the criminal "pump and dump" speculative behavior of the Goldman Sachs Syndicate, along with its heartless new role as Repo-Man of Americans' homes, drives home the point, once again, that the federal government must do something to tame Wall Street or we're just setting ourselves up to be scammed again.
No jail time for the men who gave triple-A ratings to derivative junk? No jail time for mortgage originators and their henchmen who were signing up people for loans who clearly did not qualify for them? No jail time for the guys who securitized bad debt and sold it off to investors all over the world? No jail time for the federal officials who turned a blind eye while the house was on fire? Just because everybody up and down the assembly line of greed operated on the "IBG-YBG" principle ("I'll Be Gone, You'll Be Gone") doesn't mean that they should be allowed to walk away unscathed. Their short-term recklessness led to our long-term disaster. The nation will never be the same and the federal response has been half assed.
It's ironic that all we hear on FOX News and right-wing talk radio is how "socialistic" the Obama Administration is when in reality the way the administration has handled the Wall Street crisis is anything but "socialistic." The University of Missouri economist, William Black, recently testified to Congress that Treasury Secretary Tim Geithner and Larry Summers, the President's chief economic adviser, are not the right people for the job because neither of them believe in regulating Wall Street. If Obama is such a "socialist" then why did he appoint the head of the New York Fed to be his Treasury Secretary?
So far the regulations have been either lukewarm or nonexistent. Congress is beholden to Wall Street lobbyists and campaign donors. The Obama Administration is doing nothing to address the big picture. As Kevin Phillips and others have been writing about for years the American economy has been "financialized" and unless something is done aggressively to reverse this trend the "real" economy will continue to falter. According to the piece in Time, as a share of overall corporate profits the financial-sector's profits rose from about 12 percent in the mid-1960s to nearly 41 percent in 2002.
There has been a lot of head scratching in the corporate media and among the mainstream commentariat asking: "Why all the anger?" It's usually dismissed as misplaced "populist" rage. Meanwhile, the right-wing media does everything they can to distract attention away from the real culprits on Wall Street. They say its Barney Frank's fault or Fannie and Freddie's fault or the Democrats' and their "Community Reinvestment Act" or stupid home buyers who should have known better, etc. But no matter how many Red Herrings they toss out the American public has already made the explicit connection between their suffering and the wild party that is still raging on Wall Street. That's why there's so much anger directed at "bonuses" and "executive compensation." The caps placed on the pay-outs to a handful of Wall Street scapegoats might feel good but it doesn't do anything to address the underlying injustices of living in a plutocracy. Unless the federal government steps up and takes control from these people who a year ago came begging for bailouts we're staring down the barrel of the next catastrophe.