After Madoff

The catharsis of Bernie Madoff's sentence was short lived. It didn't take long for the victims to swing into action, commenting on every news article about Ruth Madoff or their sons that they too should be put into prison. But really, what is going on here, according to Frank Rich's fabulous op-ed piece in the 5 July 2009 New York Times, is that we are hungering for something to be done to the wizards of Wall Street who keep gyrating the world's economy and particularly ours, through these boom and busts.

Yet, nothing happens. In fact, banks and financial institutions have increased their lobbying capacities in Washington, DC, watering down any possible legislation that may regulate their secretive and outlandish practices. Meanwhile, in anticipation of even the minor tweaking the Obama Administration has done to these institutions, banks are raising rates on credit cards, fees for accounts, and even the privilege to withdraw your own money. Think about that. You have to pay to get your money!

Henry Blodget, a former securities analyst on Wall Street, made millions during the last bubble induced by the financial industry, the dot.com era. His analysis caused stock brokers to recommend a feeding frenzy for small start ups, and when the dust settled and there was no "there there," Blodget was charged by the New York Attorney General for stock manipulation because he, among other stock analysts, didn't believe in the hype they were selling. He settled the civil case. However, the irony is, Henry Blodget is a talk-head analyst for NPR. NPR! Explaining how the financial industry is creating bubbles, again!

It seems we can not quite clean our closets. The next thing you know we'll have Enron executives on NPR giving us advice on how to speculate on commodities.

So it seems that as each day passes from the Obama inauguration, nothing happens to prevent these kinds of bubbles from happening again. Frank Rich is right, we would probably cheer for a John Dillinger these days, just as much as people did in the 1930s. Someone who had the guts to take it to the banks just as much as the banks and financial industry continue to take it to us.

Another article which demonstrates that nothing has changed is a fascinating account of how Goldman Sachs has been at the bottom of every bubble we have recently experienced. Yet the company and their executives (the roll call of former Goldman Sachs execuitves who have gone on into powerful government positions is breathtaking: Jon Corzine, Governor of New Jersey and former US Senator, Robert Rubin and Henry Paulson, Secretaries of Treasury...). Why would we regulate a cash cow for the powerful?

Ever get that sinking feeling that nothing will change? Remember, unemployment is rising, foreclosures are rising, your bank is charging you more for less....