Wall Street’s Virulant Strain of Capitalism (privitized profits calculated on accounting fraud then socialize losses as bailouts & corporate welfare) Under Attack by a Fed Banker
Gretchen Morgenson of the NYT has an excellent article out today on the December 7, 2011 U.S. Senate hearing titled “Financial Institutions and Consumer Protection.” In her unmatchable journalistic prose, she writes,
Richard W. Fisher, the president of the Federal Reserve Bank of Dallas, is one. In a speech last month he described, quite colorfully, the problems of these unwieldy institutions and the regulatory ethic “that coddles survival of the fattest rather than promoting survival of the fittest.”
Providing testimony at Mr. Brown’s hearing were Sheila Bair, former chairwoman of the Federal Deposit Insurance Corporation; Simon Johnson, a professor at the Sloan School of Management at M.I.T.; Philip L. Swagel, a professor of international economic policy at the University of Maryland School of Public Policy; and Arthur E. Wilmarth Jr., a law professor at George Washington University Law School.
And later, one of her interviewees queries,
“What in the world are they being paid for?”
At the moment, they are being paid for taking risks that generate lush bonuses when things go well but that require taxpayer bailouts when the tide turns. Main Street understands that this is wrong and that allowing it to continue is dangerous. It’s past time that Washington did something about it.
Gretchen Morgenson’s article here.
Webpage COMMITTEE ON BANKING, HOUSING, AND URBAN AFFAIRS SUBCOMMITTEE ON FINANCIAL INSTITUTIONS AND CONSUMER PROTECTION here
Video Archive of Hearing on December 7, 2011, Financial Institutions and Consumer Protection here
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