Is this handbasket fireproof?
We don't find ourselves talking back to the car radio much these days, but last evening's news got us going. First they put on the chairman of the Federal Reserve, Ben Bernanke, who was prattling on about how the Fed would do more to stop the invisible "recovery" from slipping back into an undeniable depression. Gee, Ben, you've got the money market at about 0.000001% interest; what else can you do? Print money is all. And apparently that's what he'll do. Our kids will eat that $20 loaf of bread yet.
Then they tell us that Moody's is threatening to lower the federal government's bond rating below AAA. What a joke. Moody's -- are they still in business? Those are the grifters that assigned AAA ratings to all the garbage securities that went bad three years ago. Somehow they're still pontificating about creditworthiness, and not from a jail cell, where some of them belong. Anyway, they're making their usual Wall Street Republican noises. As the financial collapse they engendered illustrates, the smart thing to do with Moody's is to not pay too much attention.
After we parked the car and went into the house, we started reading last Sunday's New York Times magazine, where we found this valuable interview with Sheila Bair, the just-departed chair of the Federal Deposit Insurance Corporation. When people like Henry Paulson and Tim Geithner were picking the middle class clean, handing the spoils over to Wall Street, Bair did what she could to stand up to them.
Here are a couple of money quotes from the interview:
"They would bring me in after they’d made their decision on what needed to be done, and without giving me any information they would say, 'You have to do this or the system will go down.' If I heard that once, I heard it a thousand times. 'Citi is systemic, you have to do this.' No analysis, no meaningful discussion. It was very frustrating."...
"I've always wondered why none of A.I.G.'s counterparties didn’t have to take any haircuts. There's no reason in the world why those swap counterparties couldn’t have taken a 10 percent haircut. There could have at least been a little pain for them." (All of A.I.G.’s counterparties received 100 cents on the dollar after the government pumped billions into A.I.G. There was a huge outcry when it was revealed that Goldman Sachs received more than $12 billion as a counterparty to A.I.G. swaps.)
Bair continued: "They didn’t even engage in conversation about that. You know, Wall Street barely missed a beat with their bonuses. Isn’t that ridiculous?"
She looked out for bank depositors, homeowners, and taxpayers -- you know, the folks who make this country a great place. Bair thought that investment banker fat cats, who privatized profits without paying government insurance premiums, should also absorb their losses, like grown adults.
But no. Too often she was ignored -- certainly by thieves like Paulson, but also by hot shots like Geithner in the Obama administration. The President's heart may be in the right place, but the crew he's assembled around him is continuing right along in the Bush and Clinton traditions of feeding the very few rich and pushing everyone else down.
I wish Bair, a Dole Republican from Kansas, would run for President. I'd vote for her, over Obama or anybody else in the field at this point.