Larry Summers is the Latest Sign That Fall Will Bring Joy to Fatcats, Pain to the Rest of Us

[xchrom]

http://www.alternet.org/economy/larry-summers-fed-debt-inequality


Outgoing Director of the National Economic Council Lawrence H. Summers speaks during an address to the Economic Policy Institute December 13, 2010 in Washington, DC.

It’s going to be an explosive fall, financially speaking, regardless of what transpires in the Middle East. The culmination of faux regulation, debt ceiling debates, derivatives growth and the ever-expanding Federal Reserve books will provide lots of volatility- for which the White House will be caught unprepared.

In the wake of the Great Crash of 1929, FDR and Congress passed an act to isolate people’s deposits from the speculative pursuits of financiers. The Glass-Steagall or Banking Act of 1933, was even promoted by some of the biggest bankers of the time, as I will explain in greater detail in All the Presidents’ Bankers.

Their reasons were self-serving, yet they also helped the population. They wanted a safer banking structure, they wanted citizens to feel more confident in the financial system that they dominated, and they were willing to forego their trading and securities creation operations to achieve this goal. They were willing to become smaller and substantively less risky in accordance with the Act that FDR signed on June 16, 1933.

We got nothing like that legislation this time around, just a lot of talk about ‘sweeping reform.’ President Obama signed the Dodd-Frank Act in July, 2010 to supposedly protect consumers from Wall Street. But it did not make big banks smaller. It did not separate their speculative / securities creation ability from their FDIC backed deposit and lending business. It did not require banks to dramatically reduce their derivatives positions, the leverage imbedded in complicated assets, or the dangerous chains of inter-dependent exposures to other firms.

[deminks]

1. Prosperity for them, austerity for us.

And never ending self perpetuating war.

[RKP5637]

2. Living in the US anymore is like living in a huge corporation wherein

one main goal is to screw the employees for outrageous profits for a group of extremely wealthy people, the rest are treated as disgruntled employees with a few bones thrown at them from time to time ... always with the threat of having more taken away.

As the CEO, Obama has done little to help most employees in the big picture ... instead, the corporation is propped up to serve the group of extremely wealthy people. The financial model for the corporation needed to be completely rethought and implemented to foster financial balance, instead, it was patched to return to SOS.

IMO the financial future for the corporation is not rosey, and the top will exercise their golden parachutes when the corporation once again flounders for the employees. ... the board of directors has been dreadful in helping the CEO implement change for the better.

[sulphurdunn]

3. Repeal of Glass-Stegall

has made the public guarantors of financial speculation by assuming the risk without sharing in the profits. Any time I hear these bank bastards bleat about free market capitalism I laugh.

[truebluegreen]

5. I wish I could laugh.

My urges are closer to projectile vomiting.

[Enthusiast]

4. I've heard many asshole TV Republicans

complaining that Dodd-Frank was too much of a regulatory burden for the banks.

[LuvNewcastle]

6. Have they even implemented Dodd-Frank?

It seems like I read a little while back that Schumer and a couple of others were still keeping it from taking effect. Am I confused?

[rhett o rick]

7. k&r thanks for posting. nm