I was listening to Ken Lewis, the CEO of Bank of America, complain how Wall Street has been demonized and made the scapegoat for the current financial crises. His argument is that the public and congress are only interested in finding someone to blame, and because of the stock market collapse, Wall Street is an easy target. According to Mr. Lewis, the public and congress should focus their anger elsewhere.
I don’t think Mr. Lewis is in touch with reality. Here is the CEO of the largest bank in the country that just acquired the largest investment banking firm in the country (Merrill Lynch) telling us that Wall Street was a bit player in this financial crises and that the public and congress should leave Wall Street alone.
Ken Lewis is trying to rewrite history.
In the past 10 years, Wall Street executives have run their companies and their country into the ground. How did they do this? They did it consolidating homeowner mortgages and other types of debts, putting a value on those debts, and then leveraging against those debts far beyond anything anyone would ever consider reasonable or prudent.
In a nutshell, through the pooling of mortgages and other debts, Wall Street took something that was worth $1,000,000, and then used that $1,000,000 to leverage $40,000,000. Wall Street, then, has been nothing short of reckless. Even Ken Lewis, in his heart of hearts, knows that leveraging $40 in value against every $1 in assets is playing Russian roulette with 5 bullets in the revolver.
Despite Ken Lewis’ assertion, Wall Street is to blame. They are to blame for the stock market crash, the massive taxpayer bailouts, and for the impossible debt this country will have to repay for decades to come. Let’s keep the blame where it belongs, and make sure your congressman knows where the blame should be placed. Congress has the ability to change Wall Street, if only they have the will. By pressuring congress to change Wall Street, we can stop the excessive greed that has brought the greatest nation on Earth to its knees.
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