by Jack Lee
What exactly have we done to insure we don’t have another financial meltdown? In a recent GFK poll 7 in 10 people felt government hasn’t done much of anything; the AP reports that America’s biggest banks are once again going back to their old ways and potentially putting us all at risk on another path to certain disaster.
Massive banks like Goldman Sachs and J.P. Morgan are back to making big bets on bonds, commodities and other exotic financial products which is ramping up risk at every level. But, who can blame them? There are no consequences for bad bets if you are too big too fail. Make no mistake, I’m not in favor of overregulation, however if we are not going to let banks fail, then we’re going to have to modify their risk taking. Personally, I would rather drop all the regulations and let them sink or swim, but that will never happen so we are left with only one other option, constrain the greed and minimize the risk. I’m not sure what President Obama has in mind yet, we’ll have to wait until tomorrow to read the news, but I am not optimistic.
Today marks the first anniversary of the collapse of Lehman Brothers (apparently they were not big enough and they failed) and the day that President Obama will be speaking to Wall Street about his ideas for regulations to save them from their own capricious greed. Unfortunately, this is coming a little late. Since the meltdown began there has been NO new regulations to curb the greedy, self-serving, unsustainable bets made by Wall Street and America’s biggest financial institution, but we did manage to save their bacon by giving them massive amounts of cash for which there has been little or no accountability. 780 billion dollars to be exact has been given away to the very people that caused this debacle in the first place and yet few in Washington have any idea how the money was spent.