COULD there be a better time to be a bank? If you have capital and courage, the markets are packed with opportunities—as they well understand at Goldman Sachs, which is once again filling its boots with risk. Governments are endorsing high leverage and guaranteeing huge parts of the financial system, so you get to keep the profits and palm off the losses on the taxpayer. The threat of nationalisation has receded, reinvigorating the banks’ share prices. Money is cheap, deposits plentiful and borrowers desperate, so new lending promises handsome margins. Back before the crash, banks’ profits just looked big; today they might even be real.
The bonanza is intentional. Governments and regulators want the banks to make profits so that they regain their health faster after roughly $3 trillion of write-downs. It is part of the monstrous bargain that bankers have extracted from the state (see our special report this week). Taxpayers have poured trillions of dollars into institutions that most never knew they were guaranteeing. In return, economies look as if they have been spared a collapse in payment systems and credit flows that would probably have caused a depression.
Never mind that it's rather 13 trillion rather than 3 trillion, the idea that the worst of the crisis is over seems to be taking hold (including in recommended diaries here on dKos) - and now we get rather cocky articles, as the one above, which is the lead editorial from this week's Economist, the main publication of the global elite, explaining that the bank bailouts, lopsided as they were (and it is acknowledged openly) were a good thing because the alternative could have been worse.
In other words:
we raped you, but don't complain because the alternative was to kill you
Mafia-style racketeering, openly lauded. Nice job if you can get it.
(And if you think this is hyperbole, just read the bits I bolded above again. This is not a socialist DFH writing: it's the Economist, stating that as a matter of fact, and as the thing that had to be done)
Never mind that depression is still ahead of us. The Cassandras are, once again, being mocked (and, in a troubling development, a lot of the left is part of the mockers, in a misguided attempt to shield Obama).
But the result is that finance has not been reformed in any meaningful way. More worrying, the debate on inequality and taxes (you know, the only known way to reduce inequality by eliminating incentives for those at the top to try to accumulate an ever growing share of the pie) basically never happened. The winner-tale-all system that brought us the crisis (including market-based pensions, profit driven healthcare, oligarch-owned and financial "analyst"-driven media, money-controlled politicians) is safe, now that the crisis is over.
Stock markets are going up, so all is well (hey, lots of people have 401ks or market-based pensions - never mind that with $3 trillion + ongoing contributions you could build a rather solid public pensions/health care system...).
And anyway, bankers will be bankers, and if they did stupid things it's only because regulators (stupid, underpaid bureaucrats who could never have been hired by private-sector, merit-loving institutions) did not prevent it - so this crisis, if anybody is to blame (remember, as Greenspan says, crises are inevitable, one in a while) was basically government's fault.
And the alternative is - gasp - socialism, and we can't have that, as Stalin proved (there is nothing - absolutely nothing! - between Stalin and the current financial capitalism, not even the system that prevailed in the US from 1935 to the 1980s)
Germany is having a bigger recession than the US, so so-called virtue makes you lose out on the good times, and be hurt just as bad in the bad times, so why bother?
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If this sounds like the "debate" on torture, it's no surprise. Nothing short of outright capitulation to the most extremist agenda of the right will do. Talking of an ongoing crisis is like not waterboarding: evil. Talking of accountability in either case is: irresponsible.