Three Decades of Subsidized Risk

[steven johnson]

Entitlement is considered an anathema in the poor by the conservatives but they are strangely silent on Big Bank entitlement. Welfare for the rich is a favorite of the far right.

The greed merchants needed a co-conspirator, Mr. Forstmann argues, and that co-conspirator is and was the United States government.

"They're always there waiting to hand out free money," he said. "They just throw money at the problem every time Wall Street gets in trouble. It starts out when they have a cold and it builds until the risk-taking leads to cancer."

The Treasury has lent banks money, guaranteed Wall Street's debt and declared every firm to be a commercial bank, from Citigroup with close to $1 trillion in U.S. deposits, to Morgan Stanley with close to zero. They are all "too big to fail" and so free to trade as they please—on the taxpayer dime.

What if the Fed hadn't eased Wall Street's pain in the late 1980s, and again after the 1994 bond-market collapse? What if policy makers in 1998 had allowed the markets to feel the consequences of risk—allowing LTCM to fail, and letting Lehman Brothers and possibly Merrill Lynch die as well? -- There would have been pain—lots of it—for Wall Street and even for Main Street, but a lot less than what we're experiencing today.


Three Decades of Subsidized Risk

[Common Sense Party]

1. Both parties receive HUGE campaign donations from the big banks

and Wall Street firms. Neither side of the aisle has much motivation to shake things up.

[phasma ex machina]

3. The "Secretary of the Treasury" needs a makeover.

They need to rename it "The Goldman Sachs Chair" because Golden Sharks actually own it, regardless of which party's figurehead sits in the White House.

[John Q. Citizen]

2. The Democrats are Republicans and the Republicans are facists. Look at the

health care debate. The Democratic answer is a Republican bill. A Market Based Solution that puts insurance companies in front of people.

Meanwhile the Repos want us to just die.


We need to start the Democratic Party. We could win.

[truedelphi]

4. Hear. Hear.

Reading through Howard Zinn's American History, it was amazing to realize that the Republicans had sponsored ads for the workers during the big labor strikes of 1893. These days, neither party cares about the working class, (Which I guess is now the non-working, homeless class.)

We have gone in 110 years from having two parties that care to having only third party people who care.