Still Gettin' Screwed by the Banks

One year ago I wrote about Shiti Group and Why does Vikram Pandit, CEO of Citigroup, get to keep his job? According to the AP, Pandit claimed that Citigroup was profitable up through February and has agreed to take a $1 a year salary until Citi is profitable again. To date we have bailed out Citi to the tune of $45 billion. The government forced them to cancel their order for a $50 million corporate jet and hanging on a thread is their $400 million naming rights deals with the Met's stadium. Timothy Geithner let Pandit keep his job while offing the board, a move that is usually reserved for shareholders or the mafia.

Here's the deal, we are still letting the losers dictate the terms of Financial reform. One year ago, scum of the earth like Limbaugh and the entire Fox network and getting the ignorant masses worked up into a Santorum (Santorum "that frothy mixture of lube and fecal matter that is sometimes the byproduct of anal sex." thanks to Dan Savage) by tossing around terms like NATIONALIZATION and SOCIALISM. Why do these guys get any play? Haven't they been entirely discredited? Look at Sweden's bailout. By taking over the banks Sweden not only solved their banking crisis (one that is remarkably similar to ours) but the final cost was less than 2% of GDP. We could be approaching 60% of GDP and if we let Geithner have his way that could climb to 100% of GDP.

What should be do? Last year I was advocating for a temporary take over of the banking system, locking Limbaugh away, shutting down FOX and telling everyone else to enjoy a nice cup of shut the fuck up! Obviously none of this happened and not surprisingly we are no where near reform.

The only way to find out what the financial system is up to is to start checking out this site: Planet Money and listen to the podcast.

So the mess that was the financial system bailout. The populist anger over executive pay and bonus and the voice of reason from Paul Volcker and Simon Johnson seems to be drowned out.
Mr. Volcker recently made two important points:

1. The financial sector does not add anywhere near as much social value as its proponents claim.

2. Too big to fail banks are alive and well - and this poses a major problem to our future prosperity.

The message yesterday and from other statements made by Mr. Volcker is clear. Our biggest banks are out of control and will not be reined in by the measures currently on the table. We need a much stronger approach to big banks - an approach that will strip government-backed banks of their ability to take crazy risks and, most likely, an approach that significantly constrains (and hopefully even reduces) their size.

Chris Dodd (D Conn) in an 11th hour bid to save his legacy before leaving office has supposedly taken the financial reform bull by the horns (puns all intended). But as of yesterday Bob Corker (R-Tenn.), who recently expressed his disappointment with his fellow Republicans on the committee for missing an opportunity to shape the legislation, went a step further on Tuesday, telling the Wall Street Journal that he "absolutely cannot support" the current bill.

Explaining that he has serious concerns about the bill in its current form, Corker added: "I am absolutely not throwing in the towel. I have no plans to support the current legislation. I hope we'll get back to the negotiating table."

Either the Dodd legislation is so flawed that Corker cannot support it because it won't do any good to Corker is now following his obstructionist partners in crime...