Four time bombs that will blow up Wall Street
Commentary: Too late to jail bank CEOs; only revolution will succeed
Berkshire contemplates acquisitionsJamie Heller and Erik Holm discuss the implications of the newly released letter to Berkshire Hathaway shareholders from billionaire investor Warren Buffett.
During the S&L crisis two decades ago America had a backbone, indicted 3,800 executives and bankers. Today’s leaders have no backbone. Besides jail time won’t reform the darkness consuming Wall Street’s soul. We’re all asleep, in denial about the moral crisis facing America. Yes, we need a new revolution.
Jail time? We’ve heard that many times before. Journalists have been beating that dead horse for three years. Jailing CEOs made sense in early 2009. But our naïve president missed that opportunity, instead surrounded himself with Wall Street insiders as Bush did with Blankfein’s predecessor. Trojan Horses manipulating a Congress filled with clueless Dems mismanaging tired Keynesian theories.
Taibbi got it right: Washington’s error was in protecting Wall Street’s billion-dollar crooks when they should have been prosecuting CEOs for criminal behavior in getting us into the 2008 mess. So today, the political statute-of-limitations has run. Jail solution is wishful thinking, like praying to the tooth fairy for a miracle. Time for action. Time for a revolution on Wall Street.
Jail Wall Street? Old news. They got away with it. We chickened out“Jail Bank CEOs” makes a great sound bite in the cable pundits’ echo chamber. Remember Taibbi’s earlier indictment of Goldman Sachs: the “world’s most powerful investment bank is a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money.”
But so what? Just three years after Wall Street’s crooks “brought down the world’s economy” Goldman’s Blankfein and his buddies are paying record bonuses, and laughing at us.
Seriously, think about it folks: Since the 2008 meltdown magazines and newspapers have analyzed the 2008 crash to death. It really is old news, history. Journalists churned out book after book: “Greenspan’s Bubbles,” “House of Cards,” “Trillion Dollar Meltdown,” “13 Bankers,” “Dumb Money,” “Bailout Nation,” “All the Devils Are Here,” “The Big Short,” “Too Big to Fail,” “The Failure of Capitalism,” “This Time is Different,” “And Then the Roof Caved In,” on and on, ad nauseum. All talk, no action, and no effect.
Get it? With every book, every editorial, every expose the past three years, Wall Street bankers actually grew stronger, got richer, more arrogant, bolder on bonuses, impervious to attacks, even taunting us, like the dictators Mubarak, Ben Ali and Gadhafi, confident they could do no wrong, confident no one would rebel. Jail? Our moment to act is long past. We blinked.
Yes folks, Wall Street is the “Comeback Kid” story of the 21st century. Like a terrorist in a horror film, Wall Street thrives on threats. Three short years ago, Wall Street was virtually bankrupt, a ward of the state. We could have jailed “just one” of them back then, when they were down for the count. Instead, we bailed them out! Made them richer. Gave them $13.7 trillion, loans, credits, cash, asset buyouts. Gave them keys to the Treasury. They didn’t just recover, they “ran the tables,” to use a blackjack/pool metaphor. Now Wall Street dictators have absolute power, ruling Washington, America, you and me.
Yes, America’s bankrupt, but the rich just do not careAdmit it, we lost the opportunity. Jail a bank CEO and Wall Street will miraculously reform? You’re joking, right? Wall Street got away with a “legal” bank heist. Today the should-be/would-be inmates are running the prison.
Wake up America, listen:
- “Our country is bankrupt. It’s not bankrupt in 30 years or five years,” warns economist Larry Kotlikoff, “it’s bankrupt today"
- Economist Peter Morici: “Capitalism is broken, America’s government is two bankrupt political parties bankrupting the country.”
- David Stockman, Reagan’s budget director: “If there were such a thing as Chapter 11 for politicians” the “tax cuts would amount to a bankruptcy filing.”
- BusinessWeek recently asked analyst Mary Meeker to run the numbers. How bad is it? America really is bankrupt, with a “net worth of a negative $44 trillion.” Bankrupt.
- And it will get worse. Unfortunately, nothing can stop America’s self-destructive Wall Street bankers.
- They simply do not care that their “doomsday capitalism” is destroying themselves from within, and is bankrupting America too. One mega-millionaire sent me an email after reading my Jan. 4 column, “America’s worst 10 years start now.” “Paul, you may well be right about the coming decade, but the rich exist in a different world from the one you write about. They live privileged lives in gated communities. Meet for holidays at the world’s elite resorts. The richest just aren’t worried about today’s economy like your readers. Their issues revolve around who’s the best masseuse, best Pilates teacher, best concierge medical doctor, which private school to choose, what investments they are making at this time, etc. Folks at the top are not concerned with the underlying deterioration of America, except in the abstract, because they aren’t directly affected. That’s why no amount of information from you will ever change things. To them, it’s irrelevant. Best wishes, always enjoy your stuff.”