America’s bank bailouts: They did not have to be so unfair

Posted: October 31, 2012 in economy
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THIS week’s print edition reviews two new insider accounts that describe the dark underside to America’s bank bailouts. The common theme of both Neil Barofsky’s Bailout and Sheila Bair’s Bull by the Horns is that the U.S. government cared a lot more about saving the incumbent banks and bankers than it did about helping regular Americans blindsided by the collapse of the housing market and the ensuing contraction. As a result, many Americans now believe that the rules are rigged against them for the benefit of a few politically-connected financial speculators: privatized gains and socialized losses. It is difficult to disagree.On one side of the ledger, we see that the big banks are bigger than ever, more than 90% of the gains in GDP in the past four years have accrued to those in the top 1% of the income distribution, and total Wall Street pay is still near record highs despite a sharp drop in employment. On the other, we find that median net worth fell by 40% since 2007, real median income is still 8% lower than in 2007, there are still more than 7 million fewer full-time jobs than in 2007, and there have been at least 4 million foreclosures, many of which could have been prevented through investor-friendly government policies.A few excerpts from the review:Mr Barofsky reports that no one in the Treasury Department and almost nobody at the Federal Reserve seemed …

via Economic Crisis


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