HBO debuted "Too Big to Fail" the other night. It's the story of the bank crises, the fed's involvement and the scare tactics used to convince Congress they had to pass emergency legislation to bail out some failing banks while others were left to fail. I watched it with skepticism as it painted a somewhat heroic picture of then Treasury Secretary Hank Paulson, former CEO of Goldman Sachs, as well as Ben Bernanke, Chairman of the U.S. Federal Reserve. Both men were appointed by George W. Bush.
Most of us were bamboozled into believing the bank bailout was the only way to save the economy, both domestic and foreign. We were led to believe the money we gave the banks would be re-paid, credit loosened and the economy stimulated as banks used the money to lend again for new business loans, home purchases and the like.
But that didn't happen. This rush to save the banks was much like the rush to invade Iraq after 9/11. It happened too fast, there was too much pressure put upon Congress, no strict criteria for the banks to follow other than to pay back the money. The American people? We had little to say about the mess. We barely understood it. But we weren't consulted either.
Thursday eve, Huff Post led with this screaming headline and a story that supports what my gut told me at the time:
The Fed Loses Cred (excerpt)
In the midst of the global financial crisis in 2008, the Federal Reserve lent Goldman Sachs, Credit Suisse and Royal Bank of Scotland at least $30 billion each at interest rates as low as 0.01 percent with no public disclosure of the details, Bloomberg News reported on Thursday.
It gets worse but you'll want to read it yourself. The purveyors of the mess are enjoying their beach homes, their yachts, their golden parachutes. They aren't suffering. We are.The latest revelations about the covert infusions of credit provided by the Fed to some of the world's largest banks has amplified accusations that the central bank is a power unto itself, operating according to its own devices and in the interest of major financial institutions -- and beyond accountability to taxpayers.
When are we going to demand repercussions and responsibility from these institutions via our elected officials, our judicial system, our President?
Or are they all in on the fix?