20 January 2010

Killing Peter to Pay Pandit

There has been a good deal of ink spread in the last few weeks discussing and dissecting all things Big Bank. Today's Times has an article about Citigroup's continuing problems. What isn't discussed is how these Too Big To Fail idiots are attempting to regain the profits they got during the run up to the Crash.

Some of the punditry refer to the yield curve approach, where banks take nearly free money from the Fed and then lend it out at market rates. But there's not so much lending going on. No, the main mechanism that the banksters are using to extract monopoly profits are through the consumer divisions. That's why all those new fees and stealth interest rate hikes are imposed.

If ever there were a reason to reimplement Glass-Steagall, this is it. Banksters who want to gamble with their own money, or that of investors should be free to. But neither their retail customers who don't benefit from the casino, nor the taxpayers who continue to foot the bill for bailing them out, should be forced to make the dice rollers whole. The counter argument is often made that without the insane profits (when life is easy, of course) of the casino, the retail customers would have to pay these prices. But the Chinese wall of Glass-Steagall was put in place precisely to prohibit the co-mingling of such disparate enterprises.

I am among those who feel betrayed by Obama. He's either very smart, but has his head so far up his butt that he just doesn't see that his actions reflect a disinterest in Main Street; or we've been well and truly had, McCain won.


Roboprog said...

Hey Robert, did you catch yesterday's news on the going decline towards corporatism? The SCOTUS decided that corporations have a right to all the free speech they can eat -- essentially outlawing limits on bribes, er, campaign contributions.

Of course, after a moment of mentioning the decision on NPR, they had to move on so they could cover the "news" about John Edward's illigitimate child in detail about twice as long :-(

I guess I should be happy that they mentioned the SCOTUS decision at all. If it were TV, it probably would not have made the cut.

Robert Young said...

Yeah. With all due respect, the days of "Robo Cop" are not far behind. Just before that piece of crap was revealed, I saw a post on Cafe Au Lait, which I've been following since I started with java, that complained about the 1886 decision which established the "personhood" of corporations.

I'm not sure that it happened that late. There are references to an 1819 decision which had already done this.

Solidified my view that O'Connor made the most villainous decision in decades.