That $700 billion bailout has since grown into a more than $12 trillion commitment by the U.S. government and the Federal Reserve. About $1.1 trillion of that is taxpayer money -- the TARP money and an additional $400 billion rescue of mortgage companies Fannie Mae and Freddie Mac. The TARP now includes 12 separate programs, and recipients range from megabanks like Citigroup and JPMorgan Chase to automakers Chrysler and General Motors.
Seven months in, the bailout's impact is unclear. The Treasury Department has used the recent "stress test" results it applied to 19 of the nation's largest banks to suggest that the worst might be over; yet the International Monetary Fund as well as economists like New York University professor and economist Nouriel Roubini and New York Times columnist Paul Krugman predict greater losses in U.S. markets, rising unemployment, and generally tougher economic times ahead.”
Media outlets, predictably, are not looking at all this too carefully, not probing who is getting what, not investigating a massive new theft that is compounding an old one. So far, Wall Street is still sitting pretty, still giving itself outsized salaries and bonuses, still enjoying its ill-got lucre.
And, according to Sam Pizzigati editor of Too Much, an online weekly on excess and inequality, they will come out of this just fine.
“The awesomely affluent of high finance, if current trends continue, seem almost certain to survive the mess they’ve created — with their wealth and power largely intact. And Treasury and Congress don't appear to really mind.
…The nation’s richest 1 percent have, since the 1970s, over doubled their share of the nation’s income and wealth. Last fall, this gravy train — for the rich — derailed. America’s biggest banks collapsed. The stock market tanked. The unthinkable, a real depression, suddenly became thinkable.”
When the trickle down stopped trickling, the government, and the Fed stepped in to rescue financial markets while millions lost jobs and homes.
Will the inequities, imbalances, and structural inequality be addressed? Is this a reform or a new redistribution of wealth from the needy to the greedy? History is replete with examples of well-intentioned initiatives creating undesired consequences.
What is the likely outcome? Business Journalist Gary Weiss who has written books on many Wall Street scandals has low expectations. “I’d say that we will willingly and cheerfully make the same mistakes again, because that is the way the system is setup,” he told me. “The system is not designed to correct or to change in a fundamental way. Nothing that’s happened, so far, none of the actions taken by the Obama administration regarding the financial crisis portends change.”
History also offers us telling voices, like this painful confession by an earlier reformer, and Democratic President, Woodrow Wilson, who signed the Federal Reserve Act in l913 in essence giving private interests control over our Central Bank.
He later said with chilling candor, mark these words, “I am a most unhappy man. I have unwittingly ruined my country…the growth of the nation therefore and all our activities are in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the civilized world….”
Unfortunately, Woodrow Wilson’s dissection became our destiny. Today members of Congress are struggling for full disclosure on how much the FED has spent in its bailouts and who got its billions.
Woodrow’s truth goes marching on, its lesson ignored at our peril. What went around then is still coming around now.
Mediachannel.org News Dissector Danny Schechter is making a film based on his book PLUNDER: Investigating Our Economic Calamity (newsdissector.com/plunder.) Comments to Dissector@mediachannel.org
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