I No Longer Know Who To Blame

Growing up we all learn to believe in certain things.  Things that become unshakable, the bringers of justice and peace in a world full of chaos and wobbly foundations.  For me, one of those things, was the Federal Reserve.

In hindsight, it was a silly assumption but as a kid growing up, is it hard to believe that the one thing I believed in was the economy?  The ubiquity of capitalism, the penetration of the dollar into our hearts and our conversations, and furthermore the body that regulates all that all seemed like pretty immovable objects to my uneducated brain.

And even in hindsight, maybe I was right to believe in their unstoppability.  The capabilities of the Fed and the apathy that most Americans graced it with did lead it to become that unflappable, unstoppable entity of capitalism.  They were powerful and, most importantly, they had full faith from the American people (or at least the standing administration).

So here we are today: I'm all growed up and after a decade of blind faith, the Fed may have put us in the mess that we're in.  My childhood hero is shattered.  But is it there fault?  Or was it Obama's?  Was it Gramm-Leach-Bliley or Goldman Sachs alone that tipped the house of cards off the table?  Was it Bush's deregulatory policy or the current administration's coddling of "too big to fail" banks?

I no longer know what to believe in but worst of all, I no longer know who to blame.  But I do know this: you guys probably do.

Feel free to leave your comments at the front desk.

Gramm-Leach-Bliley Turns 10

Happy birthday Gramm-Leach-Bliley!  You're 10 years old today!  And now, a celebration the way only MSNBC's Dylan Ratigan can throw it, with poignant commentary.

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The premise is this: back in the day, the Glass-Steagall act prevented banks from doing risky things with people's money by establishing a barrier between investment banks, "main st" or personal banks, and insurance companies.  Any money that you put into one of those institutions could not be gambled in other money markets so consumers could be sure that there money was safe.

This was so from 1933 to 1999.  It was a measure passed after the crash of the Great Depression caused by banks speculating with consumer money in investment markets.

Sounds pretty air-tight right?  This measure would keep people from dabbling in fragile derivative markets using people's pensions or mortgages, which meant that people could not lose their home because a bank's investment accounts tanked.

So what happened?  On Nov. 2nd, 1999 Congress passed Gramm-Leach-Bliley.  An act that undid that regulatory protection remove the barrier that prevented banks from participating in all three markets at the same time.  This gave banks, especially those with more capital in their vaults like Citigroup and Goldman Sachs, the opportunity to make boatloads of money by speculating with people's money and pensions!

Now how did this come to pass?  How did Congress let such an egregious measure pass the gavel and out into the financial world?  Because lobbyists from Citigroup (yes, the one's that owe us hundreds of billions of dollars in bailout money) coerced congress into passing this deregulatory measure.  The deal was made in the backrooms of the White House and Congress and now, we're paying for it.

So grab a hat everybody!  Let's celebrate the only way we can!  By wading through job applications into a crippled job market where credit is harder to come by than ever before.

Deregulation and "too big to fail" got you down?  Feel free to leave comments at the front desk.