The federal rescue of Wall Street didn’t fix the economy – it
created a permanent bailout state based on a Ponzi-like confidence
scheme. And the worst may be yet to come.
-
Matt Taibbi | Rolling Stone
4 Jan 2013
It has been four long winters since the federal government, in the hulking, shaven-skulled, Alien Nation-esque
form of then-Treasury Secretary Hank Paulson, committed $700 billion in
taxpayer money to rescue Wall Street from its own chicanery and greed.
To listen to the bankers and their allies in Washington tell it, you'd
think the bailout was the best thing to hit the American economy since
the invention of the assembly line. Not only did it prevent another
Great Depression, we've been told, but the money has all been paid back,
and the government even made a profit. No harm, no foul – right?
Wrong.
It was all a lie – one of the biggest and most elaborate falsehoods
ever sold to the American people. We were told that the taxpayer was
stepping in – only temporarily, mind you – to prop up the economy and
save the world from financial catastrophe. What we actually ended up
doing was the exact opposite: committing American taxpayers to
permanent, blind support of an ungovernable, unregulatable,
hyperconcentrated new financial system that exacerbates the greed and
inequality that caused the crash, and forces Wall Street banks like
Goldman Sachs and Citigroup to increase risk rather than reduce it. The
result is one of those deals where one wrong decision early on blossoms
into a lush nightmare of unintended consequences. We thought we were
just letting a friend crash at the house for a few days; we ended up
with a family of hillbillies who moved in forever, sleeping nine to a
bed and building a meth lab on the front lawn.
But the most appalling part is the lying. The public has been lied to
so shamelessly and so often in the course of the past four years that
the failure to tell the truth to the general populace has become a kind
of baked-in, official feature of the financial rescue...
...
...The bailout deceptions came early, late and in between. There were
lies told in the first moments of their inception, and others still
being told four years later. The lies, in fact, were the most important
mechanisms of the bailout…
…
…So what exactly did the bailout accomplish? It built a banking
system that discriminates against community banks, makes Too Big to Fail
banks even Too Bigger to Failier, increases risk, discourages sound
business lending and punishes savings by making it even easier and more
profitable to chase high-yield investments than to compete for small
depositors. The bailout has also made lying on behalf of our biggest and
most corrupt banks the official policy of the United States government.
And if any one of those banks fails, it will cause another financial
crisis, meaning we're essentially wedded to that policy for the rest of
eternity – or at least until the markets call our bluff, which could
happen any minute now.
Other than that, the bailout was a smashing success.
THE WHOLE STORY
