Bloomberg:
Two U.S. Treasury secretaries and Federal Reserve Chairman Ben S. Bernanke provided capital and cheap loans to banks during the last three years to help fuel an economic revival. It hasn’t worked out. ... “The political class is fixated on how the banking system caused the problem in the first place and therefore how it will have to cure it in the future -- that if you get the banks working again the economy works,” said Robert B. Albertson, chief strategist at Sandler O’Neill & Partners LP in New York. “It drives me into silly laughter. It’s the other way around.”
Atrios responds:
I suppose it should be no surprise that someone (Geithner) coming from the banking world would have thought [banks were] indispensable. Fix the banks, fix the world was the belief. But they never thought through (or didn't care to) the true implications of what happened, that our banking system completely failed in its supposed purpose, that the people in charge therefore have no idea what the fuck they're doing.
Fix the banks, destroy the world is a more likely outcome.
Of all the criticisms of Obama, this is the most obviously legit. The president's economic team hailed from Goldman Sachs, and their entire focus has been on bailing out the banking sector from their own excesses. The banks were functioning "properly" in Wall Street's eyes, when they created the credit default swaps and other schemes that destroyed the world economy.
Yet rather than help consumers, oftentimes victims of Wall Street's excesses, they rewarded the villains, time and time again. And then, they tried to hide it.
Fed Chairman Ben S. Bernanke’s unprecedented effort to keep the economy from plunging into depression included lending banks and other companies as much as $1.2 trillion of public money, about the same amount U.S. homeowners currently owe on 6.5 million delinquent and foreclosed mortgages. The largest borrower, Morgan Stanley (MS), got as much as $107.3 billion, while Citigroup took $99.5 billion and Bank of America $91.4 billion, according to a Bloomberg News compilation of data obtained through Freedom of Information Act requests, months of litigation and an act of Congress.
“These are all whopping numbers,” said Robert Litan, a former Justice Department official who in the 1990s served on a commission probing the causes of the savings and loan crisis. “You’re talking about the aristocracy of American finance going down the tubes without the federal money.”
That Wall Street aristocracy has been coddled by this administration, while regular Americans end up victims to Democratic meekness and Republican obstructionism. It shouldn't be this way. Let Republicans carry water for Wall Street crooks. Democrats should be fighting for everyone else.
The problem with the economy isn't the bankers. Is that no one has money to buy shit. Giving the bankers free money doesn't solve that.