That must be why taxpayers didn't get equity stakes in the banks we bailed out -- as Warren Buffet got when he bailed out Goldman Sachs. That means when the banks became profitable gain we didn't get any of the upside gains; we just padded the Street's downside risks.
The Street's political clout must be why most top Wall Street executives who were bailed out by taxpayers still have their jobs, have still avoided prosecution, are still making vast fortunes -- while tens of millions of average Americans continue to lose their jobs, their wages, their medical coverage, or their homes.
And why the Dodd-Frank bill was filled with loopholes big enough for Wall Street executives and traders to drive their ferrari's through.
The cost of such cynicism has leeched deep into America, causing so much suspicion and anger that our politics has become a cauldron of rage. It's found expression in Tea Partiers and Occupiers, and millions of others who think the people at the top have sold us out.
Every week, it seems, we learn something new about how Wall Street has screwed us. Last week we heard from Bloomberg News (that had to go to court for the information) that in 2009 the Street's six largest banks borrowed almost half a trillion dollars from the Fed at nearly zero cost -- but never disclosed it.
In early 2009, after Citigroup tapped the Fed for almost $100 billion, the bank's CEO, Vikram Pandit, had the temerity to call Citi's first quarter the "best since 2007." Is there another word for fraud?
Finally, everyone knows the biggest banks are too big to fail -- and yet, despite this, Congress won't put a cap on the size of the banks. The assets of the four biggest -- J.P. Morgan Chase, Bank of America, Citigroup, and Wells Fargo -- now equal 62 percent of total commercial bank assets. That's up from 54 percent five years ago. Throw in Goldman Sachs and Morgan Stanley, and these six leviathans preside over the American economy like Roman emperors.
Speaking of Rome, if Italy or Greece defaults and Europe's major banks can't make payments on their debts to Wall Street, another bailout will surely be required. And the politics won't be pretty.
There you have it. A federal court will now weigh costs and benefits of a modest rule designed to limit speculative trading in food and energy.
But in coming months and years, the American public will weigh the social costs and social benefits of Wall Street itself. And it wouldn't surprise me if they decide the costs of the Street as it is far outweigh the benefits.
The result will be caps on the size of banks. Some will be broken up. Glass-Steagall will be resurrected. Some Wall Street bigwigs may even see in the insides of jails.
If so, the Street has only itself to blame.
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