Bloodsucking Bankers Immune to Change

The Obama Administration is making an effort to "name and shame" them, but the vampires in banking and on Wall Street are still busy draining liquidity out of the American financial system.

According to the McClatchy newspapers, "The first report under the Home Affordable Modification Program, involving more than 30 lenders that together collect payments on 85 percent of American mortgages, found an especially dismal performance by two major national banks--Bank of America and Wells Fargo--that received $45 billion and $25 billion, respectively, in taxpayers' bailout money."

From February through July, the bloodsucking banks, too busy padding earnings and paying executive bonuses, started only 9 percent of those eligible for mortgage modifications on the process.

Beyond the Main Street parasites, the wizards of Wall Street are also back doing what they did to wreck the economy, giving themselves huge rewards for speculation that, in a classic definition, combines “private profitability” with “social uselessness.”

As Paul Krugman points out, "Even before the crisis and the bailouts, many financial-industry high-fliers made fortunes through activities that were worthless if not destructive from a social point of view. And they’re still at it."

Even the Wall Street Journal is unnerved by the Citibank trader who raked in $100 million while wheeling and dealing under a government guarantee, with the champions of free markets muttering that "disaster for taxpayers is inevitable when private reward is combined with socialized risk."

It's long past time for Tim Geithner and the Obama economic team to get tough with their former associates in the world of manipulating money for the greed of the few at the expense of the many.

Bonfire of the Vanities, a Sequel

When Tom Wolfe dramatized the Age of Greed in the 1980s, his novel satirizing the downfall of a Wall Street Master of the Universe was not taken as prophecy, but reality is overtaking his art.

Now David Brooks, the New York Times pop sociologist in residence, is declaring that "after the TARP, the auto bailout, the stimulus package, the Fed rescue packages and various other federal interventions, rich people no longer get to set their own rules.

"Now lifestyle standards for the privileged class are set by...Democratic staffers, regulators, journalists, lawyers, Obama aides and senior civil servants" who "get to insert themselves into the intricacies of upscale life, influencing when private jets can be flown, when friends can lend each other their limousines and at what golf resorts corporate learning retreats can be held."

Brooks exaggerates, of course, but the trend is undeniable. Automakers flying private jets to ask for government handouts, huge bonuses for Wall Street bunglers and $35,000 commodes for an executive washroom are inflaming a public beset by job losses, home foreclosures and shrinking retirement plans.

The automakers, no matter how badly they have mismanaged their industry, are still in the business of producing something to be used. Their Wall Street counterparts, on the other hand, have been engaged in making huge amounts of money by managing money, a set of skills that 21st century America has overvalued even more than running around an athletic field or making faces for a movie camera.

The traditional economy that depended on goods and professional services has receded into the background (even health care is dominated by not by healers but insurance company money manipulators).

In the dire days ahead, one consolation may be a true Bonfire of the Vanities, in which there is a return to valuing the work of those who build the structures of society and keep it going rather than the Masters of the Universe who play Monopoly with real money and destroy lives.