Bankers riding high while Main St jobless and the taxpayer is paying the bill?
When complaining that Wall St has recovered while Main St is jobless , try telling that to the thousands of bankers who lost their jobs with the demise of Lehman Brothers, Bear Stearns, Merrili Lynch, Wachovia,Washington Mutual, Country Wide, not to mention all the banker's jobs that were slashed at BofA, Citibank, Wells Fargo, Morgan Stanley, even JP Morgan and many , many others due the the financial crisis.
As to the fat cat owners of the banks, try telling Citibank stockholders, whose stock was at $50 a little more than a year ago and is now around $3 , that they have recovered while Main St suffers. Similar drops in most other bank stocks have also occurred.
You say the bailout took away "moral hazard", try telling that to the CEOs of AIG, Merrill Lynch, Lehman , Bear Stearns,Wachovia, Fannie Mae, Freddie Mac, GM and Bank of America and many others who are now out of jobs.
While I've defended Banks against demonization during this panic/ crisis, clearly they got themselves in trouble big time ( see my previous post); however here is an except from an article which you'll probably never hear about, except perhaps in passing, about what TARP has cost us taxpayers.
"Out of the $700 billion originally allotted, only $245 billion was invested in banks. With B of A now fully repaid and Citi and Wells on its heels, every major bank will likely repay TARP in just over one year. Several smaller banks failed, taking their TARP investments with them, but profits from other banks more than offset their losses. The Treasury now expects it'll reap an aggregate $19 billion profit on its investments in banks."
All the losses from TARP will be from non banks like AIG, GM and Chrysler. However, I'm sure it won't stop the demonization of the "banks" who were " given $700 billion of the taxpayers money ." With a couple of more "bank bailouts" like that maybe we can invest our way out of the deficit.
Eric
Eric: You are right. However this vast loss of jobs has a purpose in the higher scheme of things. Joseph Schumpeter's book, Capitalism, Socialism, and Democracy coined the phrase: Creative destruction, and this is a corollary of that principle. Basically in an ever changing dynamic society, these people were all doing the wrong thing at the wrong time. Too many economic engineers for our needs. A generation of bright talent all unconscious of a limited need for slicing and dicing credit. Ciao. Marc
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