Related Stories
Banking bailout benefits Wall Street, bankers
Key Excerpts from Article on Website of New York Times
Posted: October 29th, 2009
http://www.nytimes.com/2009/10/17/business/economy/17wall.ht...
Even as the economy continues to struggle, much of Wall Street is minting money and looking forward again to hefty bonuses. Many Americans wonder how this can possibly be. How can some banks be prospering so soon after a financial collapse, even as legions of people worry about losing their jobs and their homes? It may come as a surprise that one of the most powerful forces driving the resurgence on Wall Street is not the banks but Washington. Many of the steps that policy makers took last year to stabilize the financial system reducing interest rates to near zero, bolstering big banks with taxpayer money, guaranteeing billions of dollars of financial institutions debts helped set the stage for this new era of Wall Street wealth. Titans like Goldman Sachs and JPMorgan Chase are making fortunes in hot areas like trading stocks and bonds, rather than in the ho-hum business of lending people money. They also are profiting by taking risks that weaker rivals are unable or unwilling to shoulder a benefit of less competition after the failure of some investment firms last year. So even as big banks fight efforts in Congress to subject their industry to greater regulation and to impose some restrictions on executive pay Wall Street has Washington to thank in part for its latest bonanza. All of this is facilitated by the Federal Reserve and the government, said Gary Richardson, a research fellow at the National Bureau of Economic Research. But we have just shown them that they can have the most frightening things happen to them, and we will throw trillions of dollars to protect them. I have big concerns about that.
Note: For lots more on the realities of the Wall Street bailout, click here.
Related Stories
Latest News
Key News Articles from Years Past
