Money for Nothing - Krugman on the Results of the Banker Bailout

[MannyGoldstein]

Krugman writes:

http://www.nytimes.com/2009/04/27/opinion/27krugman.html

"All of which explains why we should be disturbed by an article in Sunday’s Times reporting that pay at investment banks, after dipping last year, is soaring again — right back up to 2007 levels...

Still, you might argue that we have a free-market economy, and it’s up to the private sector to decide how much its employees are worth. But this brings me to my second point: Wall Street is no longer, in any real sense, part of the private sector. It’s a ward of the state, every bit as dependent on government aid as recipients of Temporary Assistance for Needy Families, a k a “welfare.”

I’m not just talking about the $600 billion or so already committed under the TARP. There are also the huge credit lines extended by the Federal Reserve; large-scale lending by Federal Home Loan Banks; the taxpayer-financed payoffs of A.I.G. contracts; the vast expansion of F.D.I.C. guarantees; and, more broadly, the implicit backing provided to every financial firm considered too big, or too strategic, to fail...

No, the real reason financial firms are paying big again is simply because they can. They’re making money again (although not as much as they claim), and why not? After all, they can borrow cheaply, thanks to all those federal guarantees, and lend at much higher rates. So it’s eat, drink and be merry, for tomorrow you may be regulated."

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I'm pleased to see that my tax dollars, used by the Paulson/Summers/Geithner Banker Bailout, have had such a salutary effect on banker remuneration. You should be proud too. America is a place where no banker need ever fear for his fourth vacation home.

Now, back to work so you can pay off your 29% credit card debt before your job goes to China, asshole.