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“KP: I’m not blaming the banks. I’m blaming the unintended consequences of the rules. I think the rules unduly penalize equality-enhancing financial services.”
by igravious 8y ago
“KP: I’m not blaming the banks. I’m blaming the unintended consequences of the rules. I think the rules unduly penalize equality-enhancing financial services.”
(1) Bankers (rich people) lobby to have Glass–Steagall taken out back and shot in the head.
(2) Banks go nuts with financial wizardry leading to a housing bubble.
(3) Bubble bursts which ends up ruining the lives of millions, mostly lower and middle class folk. Nation enters into the worst recession since the Great One.
(4) Banks are bailed out with taxpayer money because banks have somehow become "too big to fail".
(5) Some regulations placed belatedly and half-heartedly on banks because of (1-4)
(6) Hardly anyone rich loses their shirt and hardly anyone is locked up† and some make out like bandits.
(7) Wall Street salaries and bonuses through the roof.
(8) Gov Regulations (along with Fed quantitative easing – the Fed is kind of a collection of banks, no?) exacerbate income and wealth inequality. Where did the Secretary of the Treasury at the time of the crisis, Hank Paulson, work beforehand?‡
(9) Banking policy "expert" Karen Petrou says “I’m not blaming the banks”
(0) In the words of Ace Ventura, “Allllrighty then!”
† https://www.bloomberg.com/view/articles/2017-07-26/why-no-one-went-to-jail-in-the-financial-crisis https://www.bloomberg.com/view/articles/2017-07-26/why-no-on...
‡ “Before becoming Treasury Secretary, he was required to liquidate all of his stock holdings in Goldman Sachs, valued at over $600 million in 2006, in order to comply with conflict-of-interest regulations. Because of a tax provision passed under President George H.W. Bush, Paulson was not subject to capital gains tax. This saved him between $36 and $50 million in taxes.”
- JamesBarney 8y agoYou'll have to explain 8. From first principles it makes sense that reducing the price of capital would help workers, and hurt capital owners. And all the research I've seen backs up this intuition and show that a loose monetary policy helps inequality.
- pjmorris 8y agoQE 'printed' roughly 3 Trillion dollars out of nothing, including at least 1.7T that went to buying Mortgage Backed Securities from banks whose original mortgage borrowers were never going to be able to pay off those mortgages. That had the effect of raising house prices for everyone, while turning debts of many that were never going to be repaid into the profits for the banks who aggregated these bad loans. Yves Smith over at the Naked Capitalism blog has called it 'the greatest upward transfer of wealth in history.'
- mendelsd 8y agoFrankie Boyle agrees with you (warning: lots of profanity): https://youtu.be/GtWA3jQN1Pg https://youtu.be/GtWA3jQN1Pg
- prolikewh0a 8y ago(11) Wall Street has consistently had more $$ in bonuses than the entire full time minimum wage workforce received in wages [1]. [1] https://www.nytimes.com/2015/03/14/upshot/wall-street-bonuses-vs-total-earnings-of-full-time-minimum-wage-workers.html https://www.nytimes.com/2015/03/14/upshot/wall-street-bonuse...
- igravious 8y agoDon't know why you're being down-voted – unless of course our brothers and sisters and their kin who work in finance don't like being reminded of the great income and wealth disparity between them and those at the bottom of society. “For all of these uncertainties, the broad picture doesn’t change. My judgment is that we can be pretty confident that Ms. Anderson’s estimate that the sum of Wall Street bonuses is roughly twice the total amount paid to all full-time workers paid minimum wage seems like a fair characterization.” Thanks for the article. It is shocking. Where is the moral outrage? There are huge media-storms over all sorts of identity politics hoo-hah and a whimper every now and again over the Inequality Question.