Out, Demons, Out!

The WaPo (in the person of Harold Myerson) goes off on the Money-Changers. 

 As the real income of Americans stagnated and their debt mounted, the wizards of Wall Street grew rich by collecting commissions on derivatives of derivatives of derivatives. By 2007, when Wall Street's profits amounted to an astonishing 40 percent of all American profits, the business of American finance was no longer American business -- providing loans for domestic production, technological innovation, that sort of thing -- but swapping bets and hedges on bets and hedges, all for hefty commissions.

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Indeed, if the Treasury had set out to design a system to demonstrate once and for all that trickle-down economics doesn't work, it could not have done better than TARP. Treasury Secretary Henry Paulson has thrown money at the banks, which resolutely refuse to lend it to businesses and homeowners, no matter how creditworthy they may be.

Chickenshit Myerson doesn't mention the Treasury Dep't.'s handing over the treasury to the banks. Harold's pushing a Congressional bill to make the banks lend some of that tax-payer funding, rather than use our money to keep bonuses up & to buy each other, insuring they're too big to fail & eligible for further bail-outs when all the bad debt they acquired comes due.

That's why a bill that Barney Frank is promoting in the House, which would direct banks that choose to take bailout funds to start lending to creditworthy borrowers and designate no less than $40 billion for mortgage relief, is necessary if Congress is to authorize the Treasury to spend another $350 billion on TARP. Over in the Senate, the Democrats seem inclined to think that the need for such legislation is obviated by President-elect Obama's promise to administer the TARP in the ways that Frank's bill would mandate.

If Obama's appointees inspired sufficient trust that they would be willing to take on the banks, such legislation would be unnecessary. Unfortunately, they don't.

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But to regulate banks, Obama has chosen people who have sided with banks against the public interest. They may be exemplary public servants once in office, but for now, they need to be viewed with the same wariness we'd extend to environmental appointees who voted against stricter fuel-economy standards or intelligence appointees who championed torture. That's why Frank's bill must be enacted.

"The rulers of the exchange of mankind's goods," FDR said in his inaugural address, "have failed, through their own stubbornness and their own incompetence, have admitted their failure and abdicated." Today, those rulers' failures are no less obvious, but far from abdicating, they're receiving our tax dollars and doing nothing with them. It's time, Mr. President-elect, to hurl them from the temple.

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