Government Fails in Banking Crisis
One of government’s main functions is to provide security for its citizens in the form of police, courts, military defense, etc. It has failed to do this in the banking crisis. Government did ameliorate the crisis by preventing a depression era scenario where many major banks fail. The banks not only did not fail, they recovered quickly and their chieftains are making millions. On the financial side, government worked.
On the police side, government failed. Not one of the culprits responsible for bringing America to its knees has suffered any criminal prosecution. Just recently the criminal case was dropped against Angelo Mozillo, the head of Countrywide, and one of the worst offenders in the sub-prime mortgage banking meltdown. Apparently his old company, now part of bank of America, is still the object of a civil suit by some of the people who lost millions because of his actions, but the government says everything he did is okay.
This partly due to government corruption. The banks lobbied heavily for little or no regulation, and continue to do so. The main policing organization, the SEC, failed miserably under its chairman Christopher Cox, who should be criminally libel for his failure, but of course is not. The public seems more upset about his failure to catch Bernie Madoff than about his failure to prevent the worst financial crisis since the Depression. Of course, Congress got paid well by the banks’ lobbyists to keep any laws from interfering with the banks evil deeds.
I like the book All the Devils Are Here because it criticizes many of the major players in the financial crisis for doing bad things. It doesn’t take the position that “bad things happened,” but nobody was responsible. People were responsible, and many of them continue to hold positions of power, including Lloyd Blankfein at Goldman Sachs and Jamie Dimon at J.P. Morgan Chase. The Morgans and the Rockefellers must be saddened that someone of Dimon’s low moral integrity has dragged the names of their institutions through the mud.