As everyone knows, the Wall Street banks that have benefited from an unprecedented federal bailout are making money hands over fists in proprietary investments and trades. Lending is still slow, and while they've had access to the low Fed rates, they are charging an arm and a leg for everything. What are they doing with all those profits-after this last year, no one will be surprised to hear that they are NOT figuring out how to return the favor done them with their record profits earned with the life-saving assistance of ordinary citizens. They have no "magnificent obsession" to do good to make up for the extraordinary global harm that their reckless speculation caused. No sir. They are planning to pay record bonuses and using some of those profits to fund intensifying lobby efforts to try to make sure that Congress does nothing to prevent a replay of their cozy game of socialized losses/privatized gains.
So into this picture come the chidings of President Obama's aides, including Wall Street buddy-in-chief Rahm Emanuel. See Fletcher & Goldfarb, Top Aides to Obama Upbraid Wall St., Washington Post (Oct. 19, 2009). "The bonuses are offensive," Obama strategist Axelrod says. "They ought to think through what they are doing." "Not only do they come for a bailout . . . they're now back trying to fight a consumer office and the type of protections that will prevent another type of situation where the economy is taken over the cliff by the actions taken on Wall Street and the financial market," says Rahm Emanuel.
Talk is cheap. Maybe somebody will think that this "increasingly confrontational tone against Wall STreet bonuses" will accomplish something. I don't. In my experience, most Wall Street bankers think they are entitled. If they are "smart" enough to turn the loan of cheap funds from the Fed into more high return investments, they've "earned" their millions in bonuses, they think. So what if the rest of the country is jobless, homeless and hopeless. That's someone else's problems. I suspect they can't even comprehend what it is like to be a member of the lower half of the distributional curve in this country, much less to be at the bottom.
I just went through the home of one of the millionaire familes of the early 1900s in Detroit--a family of 2 adults and five children lived in a 17,500 square foot house (plus two story carriage house) with twenty servants to take care of their every need. The servants were packed into tiny rooms while the family enjoyed seating areas next to their bedrooms. The floors that headed towards the servant quarters in the rear wing of the house even sloped downhill to make clear that the servants were not on the same level as the family's quarters on the same floors (the in-house gym, and other spaces). That same disconnect and sense of entitlement as superiors that existed in the roaring twenties--and the problems inherent in such allocational imbalances--exists between Wall Street and Main Street today.
Tough talk on the Sunday CNN program from a couple of Obama's aides isn't gonna turn the tide. Teddy Roosevelt got out on the stump and talked about the corporate titans of malfeasance. Maybe Obama should turn some of his eloquent speechmaking to targeting today's corporate titans, so that we can start using antitrust to bust up these "too big to fail" banks and using tax laws to tax them and their Big Pharm, Big Oil buddies more fairly by getting rid of the crazy loopholes like the "depletion allowance" and accelerated depreciation, etc.
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