zombie-banks

Robert Reich continues to offer excellent commentary on this crisis. He has a new piece on just how unjust and ridiculous this bailout has been, and how little has changed. Read his new piece, The Continuing Disaster on Wall St, One Year Later ASAP. Here are some excerpts:

Let’s be clear: The Street today is up to the same tricks it was playing before its near-death experience: Derivatives, derivatives of derivatives, fancy-dance trading schemes, high-risk bets. “Our model really never changed, we’ve said very consistently that our business model remained the same,” says Goldman Sach’s chief financial officer.

The only difference now is that the Street’s biggest banks know for sure they’ll be bailed out by the federal government if their bets turn sour — which means even bigger bets and bigger bucks.

This issue of moral hazard cannot be emphasized frequently enough. Banks have always known the taxpayer will be there to bail them out, and under current leadership they should feel more comfortable than ever.

President Obama’s speech yesterday did little to quiet his critics. He talks tough on financial reform, but surrounds himself with the perps. Jesse recently wrote this:

He [Obama] may as well walk into the aftermath of a vicious bank robbery and say to the perps with cash still in hand, “Now you boys stop doing that this minute. This is the fifth time you have stolen money and endangered the lives of innocent people. You can keep the money, but you had better not do it again.