Bankers, hustlers and con men doing well in this economy

Outside the Casino

By BOB HERBERT

The hustlers and high rollers at Wall Street’s gaming tables are starting to feel lucky again.

Hiring is beginning to pick up in the very sector that led the country to the edge of a depression. An article on the front page of The Times on Sunday noted that this turnaround “underscores the remarkable recovery of the biggest banks and brokerage firms since Washington rescued them in the fall of 2008, and follows the huge rebound in profits for members of the New York Stock Exchange, which totaled $61.4 billion in 2009, the most ever.”

The hustlers and high rollers are always there to skim the cream, no matter what’s happening in the real world of ordinary American families.

In a column that was published a few days before Christmas 2007, the very month that the great recession began, I wrote about the record-breaking seasonal bonuses being handed out on Wall Street: an obscene $38 billion, the highest total ever. The subprime mortgage debacle was already upon us and the economy was sinking like a stone, but the casino crowd was celebrating as never before. “Even as the Wall Streeters are high-fiving and ordering up record shipments of Champagne and caviar,” I noted, “the American dream is on life support.”

The fattest of the fat cats live in a perpetual heads-I-win, tails-you-lose environment. But if you step outside the Wall Street casino, you’ll notice that things aren’t going too well in the rest of the country. More than 14 million Americans are out of work, and nearly half of them have been jobless for six months or longer. The unemployment rate for black Americans is 15.4 percent.

School districts across the country are taking drastic steps to cope with collapsing budgets: firing personnel, increasing class sizes, cutting kindergarten and summer-school programs and, in some cases, moving to a four-day school week. The Associated Press, in a demoralizing report, recently noted: “As the school budget crisis deepens, administrators across the nation have started to view school libraries as luxuries that can be axed rather than places where kids learn to love reading and do research.”

The other plot to Wreck the U.S.

The Other Plot to Wreck America

By FRANK RICH

Published: January 9, 2010

THERE may not be a person in America without a strong opinion about what coulda, shoulda been done to prevent the underwear bomber from boarding that Christmas flight to Detroit. In the years since 9/11, we’ve all become counterterrorists. But in the 16 months since that other calamity in downtown New York — the crash precipitated by the 9/15 failure of Lehman Brothers — most of us are still ignorant about what Warren Buffett called the “financial weapons of mass destruction” that wrecked our economy. Fluent as we are in Al Qaeda and body scanners, when it comes to synthetic C.D.O.’s and credit-default swaps, not so much.

Fred R. Conrad/The New York Times

Frank Rich

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Barry Blitt

Readers' Comments

What we don’t know will hurt us, and quite possibly on a more devastating scale than any Qaeda attack. Americans must be told the full story of how Wall Street gamed and inflated the housing bubble, made out like bandits, and then left millions of households in ruin. Without that reckoning, there will be no public clamor for serious reform of a financial system that was as cunningly breached as airline security at the Amsterdam airport. And without reform, another massive attack on our economic security is guaranteed. Now that it can count on government bailouts, Wall Street has more incentive than ever to pump up its risks — secure that it can keep the bonanzas while we get stuck with the losses.
The window for change is rapidly closing. Health care, Afghanistan and the terrorism panic may have exhausted Washington’s already limited capacity for heavy lifting, especially in an election year. The White House’s chief economic hand, Lawrence Summers, has repeatedlyannounced that “everybody agrees that the recession is over” — which is technically true from an economist’s perspective and certainly true on Wall Street, where bailed-out banks are reporting record profits and bonuses. The contrary voices of Americans who have lost pay, jobs, homes and savings are either patronized or drowned out entirely by a political system where the banking lobby rules in both parties and the revolving door between finance and government never stops spinning.