[Sosfbay-discuss] Rolling Stone on the Bailout

[Brian Good]

This is a fantastic rant by Matt Taibbi.  As usual I couldn't keep my remixing fingers
off the knobs, so my version here is cut by 40%.  I cut most of the profanity and
attitude.  Just the facts are obscene enough.

http://www.rollingstone.com/politics/story/26793903/the_big_takeover/print



THE BIG TAKEOVER:  The global economic crisis isn't about money - it's about power. How Wall Street insiders are using the bailout to stage a revolution

by MATT TAIBBI  (as digested by Brian Good from 8830 words to 5066)

      We're officially, royally fucked, our empire a permanent laughingstock. Treasury Secretary Geithner will stuff taxpayers' billions into a dying insurance giant, AIG, a corporation that grew rich insuring the concrete and steel of America's industrial heyday only to destroy itself chasing phantom fortunes at the Wall Street card tables, like a dissolute nobleman gambling away the family estate as the British Empire waned.

      The latest bailout came as AIG posted the largest quarterly loss in American corporate history — $61.7 billion. Over three months that's $27 million every hour, $7,750 a second.  After 8 years of ransacking airport travelers' purses and briefcases for explosive toothpaste, Americans had no way to search the balance sheets of companies that held life-or-death power over our society and we didn't spot holes in the national economy the size of Libya (whose entire GDP last year was smaller than AIG's 2008 losses).

     Worse than our foolish role in this gruesome comedy about the marriage of greed and stupidity is our continuing denial — we still think it's an unfortunate accident instead of the creation of  the Wall Street psychopaths we allowed to gang-rape the American Dream. When Geithner announced the new $30 billion bailout, AIG was painted as just another victim of bad luck and crummy markets."When the world catches pneumonia, we get it too," CEO Edward Liddy said, as if AIG was a soup line orphan sick from someone else's financial rain. 

      In fact one cause of its "pneumonia" was its world-sinking $500 billion bets made with money it didn't have after more than a decade of scheming systematically to evade regulators. When AIG finally left the Wall Street casino, broke and busted after dawn, it owed money all over town — and your taxpayer dollars in the bailout scam will go partly to the other high rollers at its table. In this casino, middle-class taxpayers cover billionaires' bets.

     People aren't pissed off enough. Don't think it's only money, just a bonus-killing Wall Street stumble. The worldwide economic meltdown and the bailout together made a kind of revolution, a coup d'état that cemented and formalized a creeping political trend of decades: the takeover of the government by connected insiders who used money to control elections, buy influence and systematically weaken financial regulations.

The crisis was the coup de grâce: Given virtually free rein over the economy, insiders wrecked the financial world, then granted themselves broad emergency powers to clean up their own mess. Thus gambling-addict leaders of companies like AIG end up not jailed, but with a death grip on the Treasury and the Federal Reserve — "our partners in the government," as a shockingly casual Liddy put it after the latest bailout.  This colossal power grab threatens to turn the federal government into a giant Enron — a huge, impenetrable black box filled with self-dealing insiders who scheme for individual profit at the expense of an ocean of unwitting involuntary shareholders, the taxpayers.

I. PATIENT ZERO

 AIG's giant fortune came from a century of bets on sensible policyholders who wear seat belts and build houses on high ground.  They blew it all in a year or two by turning everything over to a financial bureaucrat who seemed to think making huge bets with other people's money made him Brad Pitt.

This guy, Joseph Cassano, Patient Zero of the global meltdown, ran a 400-person unit called AIG Financial Products, or AIGFP.  A pudgy, balding Brooklyn College grad with beady eyes, Cassano cut his teeth in the Eighties working for Mike Milken, the junk bond "genius" who relied on insider schemes to evade detection while wreaking financial disaster.  Cassano's scam was right out in the open, thanks to Washington's deregulation of the Wall Street casino.  "These guys look for holes in the [regulatory] system," says a government source involved with the AIG bailout.  "Whatever is unregulated, all the action is going to pile into that."

Cassano's mess grew from an investment boom fed partly by a relatively new financial instrument called a collateralized-debt obligation (CDO).  It's a box of diced-up assets: mortgages, corporate loans, aircraft loans, credit-card loans, even other CDOs. So long as the debtors pay their bills, money flows in.   No matter how dicey the individual assets, some money always flows in.  A single, unemployed ex-con trying to pay for a six-bedroom house may look like a bad investment, but hide his loan with a bunch of auto loans, credit-card debt, corporate bonds and other crap, and somebody will pay up. Even in an apocalypse, with 90% in default, 10% will still pay.  The inventors of the CDO divided up the stuff and put that $10/$100 into its own level, then convinced Moody's and S&P to give that top "tranche" the highest AAA rating — meaning nearly zero risk.

The seal of approval allowed banks to turn financial waste into investment-grade paper and sell it to pensions and insurance companies, which were forced by regulators to keep their portfolios as safe as possible. Because CDOs offered high returns it was a win-win deal: Banks made a fortune selling CDOs, and the institutional investors made much more holding them than they would in truly safe products like Treasury bills.

"The banks knew they were selling crap," says a London-based trader from one of the bailed-out companies. To get AAA ratings, they cooked upa crazy mathematical "kind of model saying that this or that combination of debtors would only default once every 10,000 years," says one young trader who sold CDOs for a major investment bank. "It was nuts."

By inducing conservative investors to buy even the crappiest mortgages, the CDOs inspired an explosion of irresponsible and predatory lending.  It became hard to find enough subprime mortgages — enough unemployed meth dealers willing to buy million-dollar homes for no money down — to fill all the CDOs.  The volume of CDOs and similar instruments created the need for some way to hedge these massive bets — insurance in case the housing bubble burst.  This was particularly true for investment banks, many of which were "warehousing" CDOs after they wrote more than they could sell. Enter Joe Cassano.

Bold and arrogant, Cassano became chief of AIGFP in 2001. AIG head Maurice "Hank" Greenberg admired Cassano's hard-driving ways, though the top guys never fully understood what Cassano did. Basically Cassano said, "You know insurance, I know investments; you do your thing, and let me do mine." Given free rein, Cassano sold a lucrative form of "insurance" to all those CDO-holders--another new financial instrument called a credit-default swap, or CDS.

The CDS was popularized by young, creative bankers later dubbed the "Morgan Mafia". Plotting in 1994 to bypass limiting requirements for cash reserves to back up loans, they devised an early version of the credit-default swap which, in its simplest form, is just a bet on an outcome. Say Bank A writes a million-dollar mortgage on  a town house and wants to hedge its risk that the borrower will default.  It pays Bank B a premium of $1,000 a month for five years in return for CDS protection by which Bank B agrees to pay Bank A the full million-dollar value of the mortgage if the borrower can't pay.

In the late 1990s Morgan convinced regulators that buying CDS protection moved the risk off their books, so they should be allowed to lend more without increasing cash reserves. 

Using credit swaps, AIGFP made the world's largest bet on the housing boom, promising to pay if the mortgage-backed CDOs went bust.  In theory there's nothing wrong with that, except Cassano didn't have to post any money upfront. When a $100 corporate bond is sold, someone has to show 100 actual dollars. To sell a $100 CDS guarantee, you needn't show a dime. Cassano sold investment banks billions in guarantees with no assets behind them.

Secondly, Cassano's Bank B was selling "naked" CDS deals in which neither party actually held the underlying loan --  not only insuring Bank A's mortgage, but selling CDSs as a speculative vehicle to Banks C, D, and E through Z for the very same mortgage --essentially letting them bet that someone else's house would burn down, letting them take out term life insurance on the AIDS victim down the street. It was Wall Street gambling, and Cassano was taking book for every bank that wanted to bet against the housing market--and he didn't have the cash to pay off if he was wrong.

Over seven years, Cassano sold $500 billion worth of CDS protection, at least $64 billion of it tied to  subprime mortgages. AIG had not even a fraction of that amount, but why worry about a disaster that will never come?  AIGFP's returns went from $737 million in 1999 to $3.2 billion in 2005. Over the past seven years, the subsidiary's 400 employees got $3.5 billion and Cassano got at least $280 million. Then it all went kablooey.

II. THE REGULATORS

Cassano's gamble was possible only because just as he took over AIGFP Sen. Phil Gramm — a grinning, laissez-faire ideologue from Texas — engineered the most dramatic deregulation of the financial industry since paper money was invented. For years, Washington had kept watch over the nation's banks. Since the Great Depression, commercial banks — which serve individuals and businesses — had not been allowed to double as investment banks, which raise money by issuing and selling securities. The Glass-Steagall Act, passed during the Depression, also kept all banks out of the insurance business.

In the late Nineties, all that changed. Funds-hungry Democrats got "business-friendly". In 1997 and 1998, the banking, brokerage and insurance industries spent $350 million on political contributions and lobbying.  Money is fast-talking, and a 1999 bill that repealed key aspects of the Glass-Steagall Act enabled the creation of financial megafirms like Citigroup. Old-fashoned local bankers don't write million-dollar mortgages for meth heads, but if a megabank sold such loans to some fool in China, that's just shrewd business, right?

The next year Gramm compounded the problem with legislation making it impossible to regulate credit swaps as either gambling or securities. Commercial banks — which, thanks to Gramm, now had to compete directly with investment banks for customers — were driven to buy credit swaps to loosen yield-seeking capital. "By ruling that credit-default swaps were not gaming and not a security, the way was cleared for the growth of the market," said Eric Dinallo, head of the New York State Insurance Department.

The blanket exemption allowed Cassano to sell as many CDS contracts as he wanted, building a huge position without government interference. Investment banks hedged their CDS deals; insurance companies didn't have to. AIG bet "massively" on the housing market, says a government source involved in the bailout. 

The biggest joke was that Cassano's wheeler dealering was regulated by the Office of Thrift Supervision.  That the behemoth AIG was (un)regulated by the small OTS (instead of the tougher Fed and SEC) was possible because another 1999 law allowed certain kinds of holding companies to choose the OTS as their regulator, provided they owned one or more thrifts (savings-and-loans).  After    AIG purchased a thrift in Delaware in 1999, the OTS regulated their entire operation.  The London-based AIGFP should have been regulated by one of Europe's tougher outfits, like Britain's Financial Services Authority, but the OTS convinced the Europeans it could handle these giant companies. 

By 2007, the EU had legitimized OTS supervision of three mammoth firms — GE, AIG and Ameriprise.  That was the year the subprime crisis exploded, and in fact the OTS lacked the muscle.    That year the Government Accountability Office criticized the "disparity between the size of the [OTS] agency and the diverse firms it oversees,"  noting that the OTS had only one insurance specialist on staff — though it was the primary regulator for the world's largest insurer!

"There's this notion that the regulators couldn't do anything to stop AIG," says a government official who was present during the bailout. "That's bullshit....  These regulators have ultimate power. They can send you a letter and say, 'You don't exist anymore.'"  When AIG finally blew up, its ostensible OTS overseer, C.K. Lee, said he believed Cassano's credit swaps were "fairly benign products" because the company told him "there was no big credit risk." 

In early March, after AIG's latest bailout, Treasury Secretary Timothy Geithner called AIG a "huge, complex global insurance company attached to a very complicated investment bank/hedge fund that was allowed to build up without any adult supervision." Even so, AIG might have been OK but for its  lack of internal controls. In the six months preceding its meltdown, insiders say, the chief financial officer and chief risk-assessment officer positions were empty.  The 18th-largest company in the world had no one checking its balance sheet and tracking its assets. Consultants that were called in a few weeks before the bailout found that senior executives couldn't answer basic questions, such as how much exposure the firm had to the residential-mortgage market.

III. THE CRASH

  Before 2005, AIG's solid name and AAA rating allowed Cassano to sell CDS protection with little cash in reserve. Then crummy accounting practices damaged AIG's credit rating, triggering clauses in the CDS contracts that forced him to post substantially more collateral on his deals. By 2007 AIGFP's portfolio was clearly poisonous, racking up $352 million in losses even as Cassano told investors on a conference call that he could see no reasonable scenario "that would see us losing $1 in any of those transactions." When a company accountant expressed concerns, , Cassano personally excluded him from the financial review, saying he might "pollute the process."

The following February, with $11.5 billion in annual losses, AIG announced Cassano's resignation,  citing "material weakness" in the CDS portfolio--but they let him keep $34 million in bonuses and retained him as a consultant for $1 million a month through the end of September 2008, even after taxpayers gave AIG $85 billion to fix his mistakes. 

What finally sank AIG was another credit downgrade in September, from AA to A, which necessitated billions in collateral for Cassano's CDS deals-- more than AIG's liquid assets. Even so, management dithered for days, not recognizing the trouble. 

The weekend of September 13th, AIG leaders were summoned to the offices of the New York Federal Reserve. Regulators from Dinallo's insurance office were there, and Geithner, then chief of the New York Fed. Treasury Secretary Hank Paulson, preoccupied with Lehman Brothers' collapse, was in and out. Also present was Lloyd Blankfein, CEO of Goldman Sachs. Strangely absent was OTS.  The next day Treasury officials proposed that Blankfein and the other bankers in attendance try to raise private money.  A one-day time frame made the result a foregone conclusion. The bailout was on.

When AIG's plans to pay $90 million in deferred compensation to former executives became known, Congress balked, and the payments were canceled.  But in January, 2009 AIG decided to pay out another $450 million in bonuses to the 400  employees in AIGFP.  $1.1 million in taxpayer-backed money apiece to the guys who spent a decade punching a hole in the fabric of the universe!

The planet's in flames, and some Wall Streeters still won't fly coach. "These people need their trips to Baja, their spa treatments, their hand jobs," says an official involved in the AIG bailout, apparently not even half-kidding. "They don't function well without them."

IV. THE POWER GRAB

Step one in Wall Street's power grab was to create financial products so complex and inscrutable that ordinary Americans — not to mention federal regulators and even the CEOs of corporations like AIG — were too intimidated to try to understand them. Add shrewd political investments, and the nation's top bankers could scrap any meaningful oversight of the financial industry.  Phil Gramm, chairman of the Senate Banking Committee in the late 1990's, collected $2.6 million in only five years.  His 1999 law that gutted Glass-Steagall passed 90-8 in the Senate, supported by 38 Democrats, including Biden, Kerry, Daschle, Durbin, even Edwards. The Act not only helped create the too-big-to-fail behemoths like Citigroup, AIG and Bank of America — it helped them crush smaller competitors, leaving the big  firms with even more money and power to lobby for further deregulation. "We're moving to an oligopolistic situation," Kenneth Guenther, a top executive with the Independent Community Bankers of America, lamented after the Gramm measure was passed.

>From 1998 to 2008  financial companies spent $1.7 billion on federal campaign contributions for both parties and another $3.4 billion on lobbyists.  The regulatory situation worsened in 2004 in an extraordinary move that never even got to a vote. The European Union was threatening strict regulation of America's big investment banks if the U.S. didn't strengthen its own oversight. The top five investment banks met on April 28th and — helped by then-Goldman Sachs chief and future Treasury Secretary Hank Paulson — proposed to the SEC chief that if they voluntarily curtailed risky activity they should be released from any lending restrictions. The discussion lasted just 55 minutes, and no representative of any major media outlet was there to record the fateful decision.

SEC chief William Donaldson, a former investment banker himself, OK'd the proposal, and the EU  dropped its threat to regulate the five firms. Donaldson and his successor Christopher Cox named a commission of seven people to oversee five companies whose combined assets totaled more than $4 trillion. In the last year and a half of Cox's tenure, the group had no director and did not complete a single inspection. The banks, which had originally complained about being regulated by both Europe and the SEC, ended up regulated by no one.

With capital requirements lifted, those top five banks leaped into the raging housing bubble just like everyone else on Wall Street. Bear Stearns's debt-to-equity ratio soared from 12-1 to 33-1 as it drowned itself in bad mortgage loans. Goldman Sachs, sitting pretty with its CEO Hank Paulson appointed to run the Treasury, jumped into the housing craze too, and by the summer of 2008 Goldman was Joe Cassano's biggest customer, with $20 billion of exposure in Cassano's CDS book. This might explain the presence of Goldman chief Lloyd Blankfein with ex-Goldmanite Hank Paulson that weekend of September 13th.  "If AIG went down," market analyst Eric Salzman explained, "there was a good chance Goldman would not be able to collect." The AIG bailout, in effect, was Goldman bailing out Goldman.

Eventually, Paulson elevated another ex-Goldmanite, Edward Liddy, to run AIG — a company whose bailout money would be coming, in part, from the newly created TARP program, administered by another Goldman banker named Neel Kashkari.

V. REPO MEN

When people lose homes to foreclosure or go bankrupt on credit-card debt, the government doesn't rescue them. But when Goldman Sachs — its average employee made $350,000 last year--faced potential losses on unregulated insurance purchases for its insane housing bets, the government was there in a flash.  Rich bankers bail out rich bankers, using the taxpayers' credit card.

Cloistered Wall Streeters are reluctant to share information with outsiders who don't know what LIBOR is or how a REIT works.  They don't even try to explain, just roll their eyes and say "trust us".  The eye roll is part of the psychology. The State is now being asked not just to call off its regulators or give tax breaks or funnel a few contracts to connected companies; it is intervening in the economy  to preserve the megafirms' influence.  Paulson's bailout transformed the government into a giant bureaucracy of entitled assholedom, one that socializes "toxic" risks but leaves the profits and the management of the bailed-out firms in private hands.  And it all happens in secret, far from the prying eyes of NASCAR dads, liberal readers of obscure novels, subprime mortgage holders and other financial losers.

Some aspects of the bailout were absurdly secretive. A few lines in the Federal Reserve's weekly activities summary show the moment where a big chunk of your money disappeared forever. The H4 report ("Factors Affecting Reserve Balances") is just about all the Fed ever tells the world about its doings. For the week ending February 18th, under the heading "Repurchase Agreements" is the number  zero. It's significant.

In pre-crisis days, the Fed managed the money supply by buying and selling securities through Repurchase Agreements, or Repos, dumping $25 billion or so onto the open market every week, buying up Treasury bills, U.S. securities and even mortgage-backed securities from institutions like Goldman Sachs and J.P. Morgan, who would usually "repurchase" them within a week. That's how the Fed controlled interest rates: Buying up securities gives banks more money to lend, making loans cheap; selling the securities back to the banks reduces the money available for lending, raising  rates.

Look at weekly H4 reports back to the summer of 2007:  As the credit crunch started around August, the Fed buys a few more Repos than usual — $33 billion or so. By November, as private-bank reserves dwindled, the Fed was injecting $48 billion into the economy.  In December, it's $58 billion; by March (the Bear Stearns rescue) it's $77 billion. In May 2008, it's $115 billion, and it stays stratospheric through 2008, as high as $125 billion in short-term loans into the economy — until suddenly, at the start of this year, it's nothing. 

It's zero because the Fed had quit using transparent repurchase agreements to pump money into private companies. Now newly invented government operations are injecting cash into the economy, most of them secretive and with names like Term Auction Facility,  Term Securities Lending Facility, Primary Dealer Credit Facility, the Commercial Paper Funding Facility and a monster called the Asset-Backed Commercial Paper Money Market Mutual Fund Liquidity Facility (ABCPMMMFLF). There's also a Money Market Investor Funding Facility, plus three facilities called Maiden Lane I, II and III to aid bailout recipients like Bear Stearns and AIG.

While the rest of America, and most of Congress, bugs out over the $700 billion TARP bailout, these new Federal Reserve creatures are quietly pumping trillions into private companies ($3 trillion so far in loans, and perhaps $5.7 trillion more in guarantees of private investments). Technically it's not taxpayer money, but it still affects taxpayers because the Fed's activities impact the economy as a whole. This new, secretive Fed activity completely eclipses the TARP program in economic influence.

Who gets that money?  How much disappears through new holes in the hull of America's credit rating?  Are these new institutions temporary?  Will they be permanent, state-aided crutches to Wall Street, designed to systematically suck bad investments off the ledgers of irresponsible lenders?  "They're supposed to be temporary," says Paul-Martin Foss, an aide to Rep. Ron Paul. "But we keep getting notices every six months or so that they're being renewed. They just sort of quietly announce it."

    A GAO letter says the Fed cannot be audited by Congress or anyone else.  The Accounting and Auditing Act of 1950, 31 USC 714(b), dictates that congressional audits of the Federal Reserve may not include "deliberations, decisions and actions on monetary policy matters." The exemption, Foss notes, "basically includes everything." 

VI. WINNERS AND LOSERS

In January, when only $1.2 trillion had vanished, Rep. Alan Grayson of Florida asked where all the money went.  Federal Reserve vice chairman Donald Kohn's response was a classic eye roll:  naming names might discourage banks from taking the money, Kohn said.  When Grayson asked about the terms of the loans the Fed was making, and whether the valuations of purchased assets were in line with market rates, Kohn answered evasively: "The ones that have market values are marked to market." In essence, the Fed told Congress to lay off and let the experts handle things: Don't worry. Trust me.

The Fed is a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. The Senate spends "hours and hours and hours arguing over $10 million ... but there has been no discussion about who has been receiving this $3 trillion," says Sen. Bernie Sanders. "It is beyond comprehension." 

It's not just the Fed--the Treasury, too, maintains secrecy surrounding its implementation even of the TARP program, which was mandated by Congress. What criteria did the Treasury use to determine which banks received bailout funds and which didn't?  When the Congressional Oversight Panel, charged with monitoring the bailout money, asked Paulson  how he decided who got the money, Treasury directed the panel to a copy of the TARP application form on its website.

One member of Congress theorized that "if you knew Hank Paulson, you got the money." Thus the big banks devour market share at the expense of smaller regional lenders.  Paulson's buddies at Citi and Goldman and B of A got theirs fast — remember that TARP was originally passed because money had to be lent that day, that minute, to stave off emergency. Five months into the TARP program, some smaller banks not only haven't received funds, they can't even get a call back on their applications.

"Community bankers [feel] that no one up there cares much if they make it or not," says Tanya Wheeless, president of the Arizona Bankers Association.   This is completely backward, since small, regional banks did little of the predatory lending that sank the economy.  They stick mainly to "bread-and-butter banking," says Wheeless.  Still, the lion's share of bailout funds has gone to larger, "systemically important" banks. "It's like Treasury is picking winners and losers," one state banking official said.

The bailout hurt regional lenders by boosting the political power of their giant national competitors.  After the relentless building of ever-larger megacompanies and a deregulated environment that gradually fed all the little fish to an ever-shrinking pool of Bigger Fish has brought us near collapse,  the government should slowly break down too-big-to-fail monsters to manageable units. Instead, regulators close ranks and use near-secret bailout processes to double down on the same faulty, merger-happy thinking that caused the problem, creating a constellation of megafirms under government control that are even bigger, more unwieldy and more crammed to the gills with systemic risk.

Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company that owns the world's most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company has no mechanism for auditing itself and is run by leaders who have little grasp of the daily operations of its disparate subsidiaries.

So AIG's rip-roaringly shitty business model has been writ almost inconceivably massive — and, to echo Geithner, "without adult supervision". How much of what kinds of crap is actually on our balance sheet, and what did we pay for it? When exactly will the rent come due, when will the money run out? Does anyone know what's what?  Where on the spectrum of capitalism to socialism are we?  Is there a dictionary term for it? It would be funny, if it weren't such a nightmare.

VII. YOU DON'T GET IT

The real question now is whether the Obamites will restore sanity to the financial system and permit the general public to participate or whether the new financial bureaucracy will remain obscure, secretive and hopelessly complex. It may bode ill that Obama's Treasury secretary, Geithner, is one of the architects of the Paulson bailouts; as chief of the New York Fed, he helped orchestrate the Goldman-friendly AIG bailout and the secretive Maiden Lane facilities used to funnel funds to the dying company. Neither did it look good when Geithner — himself a protégé of notorious Goldman alum John Thain, the Merrill Lynch chief who paid out billions in bonuses after the state spent billions bailing out his firm — picked a former Goldman lobbyist named Mark Patterson as his top aide.

Geithner's early moves reek of Paulsonism. He talks about partnering with private investors to create a "bad bank" that would systemically relieve private lenders of bad assets — the kind of massive, opaque, quasi-private bureaucratic nightmare that Paulson specialized in. Geithner even refloated a Paulson proposal to use TALF, one of the Fed's new facilities, to essentially lend cheap money to hedge funds to invest in troubled banks while practically guaranteeing them enormous profits.  Hedge fund managers love this idea.  "This is exactly what the financial system needs," said Andrew Feldstein, CEO of Blue Mountain Capital and one of the Morgan Mafia. Strangely, few aside from those who run hedge funds express such enthusiasm.

While the finances may be complex, the politics aren't. By creating an urgent crisis that can only be solved by those fluent in a language ordinary people can't understand, Wall Street shut the vast majority of Americans out of their own political future.  The age of the CDS and CDO has made us financial illiterates. By complicating an already too-complex economy, Wall Street used the crisis to effect a historic, revolutionary transformation of democracy into a two-tiered state with plugged-in financial bureaucrats above and clueless customers below.

Most galling is when Wall Streeters think they deserve not only their huge bonuses and lavish   lifestyles but also the awesome political power their own mistakes have granted them. When challenged, they cite their stress, 90-hour weeks, divorces, and hemorrhoids.

"Wait a minute," you say. "No one ever asked you to stay up all night eight days a week trying to get filthy rich shorting what's left of the American auto industry or selling $600 billion in toxic, irredeemable mortgages to Taco Bell clerks. Why do we give taxpayer money to you?  Why aren't you in jail?"

They'll just roll their eyes.  You Don't Get It. These people were never about anything except turning money into money to get more money; valueswise they're on par with crack addicts or sex obsessives who burgle homes to steal panties. Yet these are the people in whose hands our entire political future now rests.

Good luck with that, America. Enjoy tax season.

###

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