Save the Banks and Kill the Economy

by Prof Rodrigue Tremblay

It has become a truism to say that the Democrats and the Obama administration now  “own” the crucial issue of the economy. Justly or unjustly, voters are bound to hold them accountable for the poor state of the U.S. economy. This is not an enviable political position to be in just before an election, at a time when disgusted voters are most angry and very anxious about the economy and their economic future. Recent polls indicate that nearly two-thirds of Americans think their nation is in a state of decline and that the economy will remain in the same recessionary state or get worse next year.

Contrary to what President Franklin D. Roosevelt did in the 1930s, President Barack Obama did not confront the banking industry head-on after fraudulent practices caused one of the worst financial crises in U.S. history. In particular, he did not reverse the blanket financial deregulation that the Clinton and Bush administrations engineered in 1999, in 2000, in 2004, in 2005 and in 2007 that allowed for creating mortgage-linked synthetic subprime securities and for betting against them. Instead, his economic operatives (Geithner, Summers, Bernanke, Orszag, Emanuel, (L.A.) Sachs, Romer, Bair, …etc.) threw trillions of public dollars to the largest banks, allowing top bankers to keep enjoying hundreds of million of dollars in yearly bonuses, at a time when some 300,000 Americans are losing their homes through foreclosures every month. Such a persistent epidemic of home foreclosures is creating a tremendous drag on the economy, besides being a social disaster. —The system that is responsible for so many home foreclosures has not been fixed, although valiant attempts have been made to mitigate the process.

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via Save the Banks and Kill the Economy.

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