General Discussion
In reply to the discussion: A question for Obama and\or his supporters here: [View all]Red Knight
(704 posts)Because the problem is that we have this thing created which is the combo investment/commercial bank. This allows JPMorgan to gamble away money----deposited money---and know that a chunk of that change is automatically insured. This is why Glass-Steagel was so important--it didn't allow for this sort of mixture. An investment bank was just that and its gambling money was not insured.
So yeah--it kinda has a lot to do with things.
The marriage of government and banks that exists today is deeper than most people know.
The total cost of the subprime losses are around 1.4 trillion dollars. So if they had just fixed that--that's all it would have cost. But the problem was leverage and CDOs and these exotic investment securities that the banks built. That bailout cost more like 13 trillion. They could have paid off everyone's mortgage in the country and bought a home for those who didn't and it would have been a trillion dollars less.
This wasn't about saving the economy. That could have been done bottom up instead of top down(har-har). It was about protecting friends of Hank Paulson.
Obama and all the other politicians work for Wall Street first. Main Street is an afterthought.
That's just the way it is. Until money in politics is cleaned up it will always be this way