Robert - I agree that Obama was wrong to support the bailout. He and the Democrats have changed direction since then and realized a prosperous country must work for a more even distribution of wealth. The Republicans are still trying to protect Wall Street from its mistakes.

Are republicans seeking another bailout for Wall Street? I must have missed that report on the news...

Republicans are trying to repeal Dodd-Frank and are blocking any future banking reforms.

Agreed Robert. Also, most banks that took TARP money, have paid or are in the process of paying back the money. They now realize the bad decision they made. How many people said that TARP was a bad idea?

TARP was a bad idea, but that happened at the end of the GWB administration. Robert is confusedly attributing the behavior of Wall Street and the Bush administration on President Obama and "liberal democrats." President Obama was not in office between 2000 and 2008 when the egregious tax breaks, deregulation, and TARP payments took place. He did however, inherit a huge mess which no reasonable person could expect will be unraveled and resolved within 4 years. The Republican party leadership apparently wants the American economy in freefall and that is in my view unpatriotic.

Hey Bren. Obama voted for TARP

Bren,

Nice talking points. Please put away your crayons.

Though many of us are not crazy about TARP, it did protect us from a major depression, so I have no problem with Obama voting for it.

Further, it is a good thing that Obama not Bush basically administered it. is buddies on Wall Street would have had their snouts much deeper into the trough. Think of the Cheney administration's handling of their contractor pals in Iraq.

CowDung, You try to say hedge fund managers sacrificed because some of them were killed in 9/11? That is some weird logic that totally misses the point. Perhaps it would be better if you explained why the surviving hedge fund managers got big bonuses while the stock market crashed and millions of other people got laid off.

Is it any less a sacrifice than the murdered teachers that the author brought up?

The fund managers likely got their bonuses because they met the requirements spelled out in their contracts, it's as simple as that. Can the 'evil' republicans be blamed for their [the CEO/hedge fund manager's] ability to negotiate lucrative contracts or for the board of directors that agreed to it?

Cowdung - Re: murdered teachers - so you are saying if the author uses poor logic you get to use poor logic as well? Ok.....
I am still not sure why you are so strident in defense of hedge fund managers. If you subtract the bailout then none of the investment firms made their numbers for the year and no one should have gotten bonuses. In any other industry such catastrophic failure would have resulted in a lot of top people being shown the door. In banking you get bonuses.

Who are you to determine who is 'allowed' to get a bonus or not? If the terms of the contract that was agreed to by all involved parties are met, then the bonus due to the employee must be paid.

"Re: murdered teachers - so you are saying if the author uses poor logic you get to use poor logic as well? Ok..... "

He asked the question, so I provided an answer...

@CowDung, I recall that some Wisconsin teachers had contracts too. You guys had your knickers in a twist over 5% of a $50K salary when a few kids can't read so well, and you brush off million dollar bonuses for tanking the economy?

And, CowDung, a bunch of janitors, window-washers, and secretaries died on 9/11 along with the stockbrokers. Quite a few police and firefighters too.

I believe that those teachers with valid contracts were able to keep those contracts in force and were not required to make the contributions as the law stated.

Yes, lots of people were killed that day. The author asked specifically about hedge fund managers and CEOs being killed at their jobs.

Hey Cow, while hedge fund managers died on 9/11 and it was a horrific (and avoidable) tragedy, this was an attack by Pakistani and Saudi terrorists. This is a specious argument.

Yes Bren, the whole point about teachers (and other school officials) being gunned down in the classroom, while CEOs and hedge fund managers are not is stupid--I think everyone (aside from Mr. Patzfahl) agrees on that point.

What does the nationality of the attackers have to do with anything? Does it make the deaths of the CEOs and hedge fund managers any more acceptable or less tragic than teachers being killed in the workplace?

Hey Cow, the term "profit" means surplus funds after expenses. Thus the statement "record profits" means that the amount of surplus funds after expenses was higher than in earlier recorded profits. Hope this helps!

Thanks--I am aware of the definition of a profit.

My point is that in order to make profit, a business has to risk money to do it. A company that risks more money, deserves to make more money in profit. The relationship between the money risked and the money gained is the profit margin.

If a company has a record amount of expenses, there's nothing wrong with that company making 'record profits'...

CowDung, you want bang for your complaint factor quota? Try making a complaint about this: http://t.co/Q5FL4w3E Study: Hundreds of Fraudulent Defense Contractors Are Still Getting Contracts. Trillions are given to the fradulent supply network of the defense contract machine. The war machine the GOP created is out of control and needs to be stopped.

Who's responsible for awarding those defense contracts? I would think that our Commander in Chief or Secretary of Defense could easily stop that sort of thing...

Cow, I'm not sure how a company "deserves" anything. Risk is risk. No one deserves a special pat on the head for taking a risk. And what you describe isn't accurate. Big Oil jacked up prices claiming instability in the Middle East. But very little of the oil sent to the U.S. comes from Libya. Our sources were quite stable. It was just an opportunistic decision. Or Big Pharma. I worked for an insurance company and learned that the pharma companies that did the least R&D charged the highest rates because they wanted to make profits before they lost exclusivity on their patents. But they tell patients the prices are because of R&D.

Capitalism is a good thing. It's the money addicts who throw things off balance. Regulation keeps things, well, regulated. Remove the regulations and it's like the teacher walking off the playground. The bullies swing into action.

By risk you mean BofA taking $55 trillion of their toxic Merrill Lynch derivatives and shifting these derivatives to their retail arm, putting depositors at risk or should I say covered by the FDIC if it runs into trouble.?

Bren:

Do you realize that the oil companies don't actually set the prices at which crude is traded on the world commodities market? Unrest in Libya affects can affect the total supply of oil available--this has an effect on prices everywhere, not just in places that import oil from Libya. If the investors think there will be a shortage, the prices get driven up.

As far as companies 'deserving' anything, it seems reasonable that companies that risk the most money 'deserve' to make the most in profits. 'Deserve' does not imply an 'entitlement' or a 'guarantee'. It just simply states that those who take the risk are more deserving of a reward than those who risk little or nothing. The profit margins of the oil companies (despite the "record profits") are far below the margins of the big pharma companies...

I thought Bush set the oil price, now I am very confused.

No, Bob. The CEOs mishandled the situation so badly that they caused financial hardship for everyone and required a huge bailout from the US taxpayer. And now certain politicians expect public workers and retirees to sacrifice to pay off the bill while the CEOs carry on as usual. Both Democrats and Republicans are at fault for the mess, but it's the GOP that is being less equitable about which Americans have to clean it up.

The performance of a CEO is a matter that needs to be addressed by the board of directors that have authority over that CEO's employment terms. I don't support the idea of allowing the government to butt into the affairs of private businesses, telling them if they can pay bonuses, fire people, or telling them how much they are allowed to provide in compensation for the employees.

Nope. Once they took the loans that made us all stockholders, bondholders in the companies. They are accountable to us to not reward poor performance at our expense.

Cow, if you don't support government "butting in" to tell people who to fire, etc., how do you feel about government invading people's bedrooms and privacy as some Republican leaders believe government should? Why are some invasions acceptable and others not?

I'll stick with my evaluation of the article above, Randy. In fact yours differs from his only to the extent that it attributes partial fault to the Democrats. It still misses a big swatch of the population that's been dealing with the economic realities of the times for years. Something that hasn't really been of much interest to those in the public sector until just recently when they started feeling some of the effects themselves.

Bren:

I don't believe that the government should be 'invading peoples' bedrooms'...

Randy:

The loans may have made us all shareholders (in a sense), but that still doesn't give anyone legal authority to void contracts or make changes to terms of employment that are included in those contracts.

Let's crap can this envy nonsense OK. I understand you are probably projecting, but all most of us care about is minimizing those entities that are screwing up our collective lives.

From what most of us see, investment bankers and hedge fund managers add very little to your economic well-being, vs people who run manufacturing companies. In fact because these financial institutions have been sitting on the loan money that could stout businesses we have seen very little growth in this country.

In the meantime they have found the money to pay themselves huge salaries and bonuses for adding nothing the economy. Now some of you in your little John Galtish fantasy lands see these guys, sleeves rolled, arms akimbo, dynamically doing bold things to earn this money.

The only bold thing they've done is leverage their own influence within these companies to funnel money in their pockets.

It's very instructive to come here and see these knucklehead world views in action.

The OWS movement must be having an effect at consciousness raising, though you would incur a hernia trying the raises the ones around here. Nevertheless, while some like denigrate the protestors as being dirty hippies, enough bricks have been crapped to build a three bedroom house.

It's not your money Keith, they can do whatever they want with it they earned it. Their money does not effect you no matter how much you think you can take away.

Who do you think invests and finances manufacturing companies? If your buddy Obama and the economy weren't so bad this wouldn't be something to talk about. Instead you and the OWS group whine and cry thinking that policies will be written and a check from some hedge fund manager will be coming your way in the mail.

I wish it did actually. I wish they would send you $50,000 just to see how fast you would spend it. Unlike the evil hedge fund manager or the bank guy all of you would waste it on crap that does not increase in value or pay dividends/returns. And the cycle continues.

Fantasia, that's not really true. See
http://www.ritholtz.com/blog/2009/12/citi-tarp-repayment-is-a-tax-dodge/
A lot of money is getting shifted around to make it difficult to assess exactly what got paid back.

Fantasia does have a point. Under Obama the TARP program, along with many other functions of government, have been very welled managed. You couldn't begin to imagine the rampant corruption if President Cheney was running this like he did in Iraq.

I knew this would come up. The government did not force any banks to lend to unqualified buyers. That is just BS. Where the government failed was by rolling back long-standing successful regulations that kept the banks honest. The government did not come up with mortgage tranches or CDOs. The banks successfully lobbied government to remove their fetters and then promptly ran wild. You can chastise the policeman for being asleep, but that does not mean he is to blame for the robbery.

It all depends on how you define 'force'. The government strongly encouraged banks to lend to high risk buyers. Freddie and Fannie are pseudo government run organizations, and HUD was able to require them to target their loans to meet a minimum percentage of the high risk loans. Other banks had to provide similar loans in order to compete. Not surprisingly, many of these high risk loans ended up in default and now we are living the rest of that story...

That's right Sharma, people forget whose fault it is we are here and then these two go on to create the Dodd-Frank Wall Street Reform and Consumer Protection Act.
Ironically, about the only two firms Dodd-Frank doesn’t touch are the two most responsible for the crisis: the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac which Frank and Dodd were supposed oversee.

No. Sorry. Sharma, Cowdung and Barb have swallowed the banks' smokescreen hook, line and sinker. The government did not even "strongly encourage" banks to lend to unqualified buyers. What the government did was discourage "redlining" people that were from poor neighborhoods but otherwise qualified. However there were no punishments. You cannot point to a single example where a bank was reprimanded in any way for refusing a loan to an unqualified buyer. And the government definitely did not "encourage" banks to wrap up risky loans with safe ones in tranches and then get the ratings agencies to rate them AAA. These tranches were then sold to unsuspecting investors as safe. Notice that the firms that took the biggest hit were the least regulated by the government, such as Countrywide and Bear Stearns.

That Dodd-Frank project? The one that is trying to bring a modicum of regulation to Wall Street, or do ou enjoy being screwed by these folks Marsha?

Wouldn't be nice if you knew something Marsha. You talk like Frank-Dodd led to the crash on Wall Street. They, in fact, have tried to pass regulations to prevent what happened in 2007-2008, which in fact were watered down by your friends in the GOP and Blue Dog Dems who should be in the GOP.

You're welcomed Marsha for the free current events lesson.

Doubling down Marsha?

THANK YOU, MARY BOYLE. You are exactly right! It's not about left vs. right, Rep. vs. Dem. because THEY ARE ALL BOUGHT. You can't run for any public office any more without the "big bucks", and those sure don't come from you or me - they come from the corporations. Our politicians on both sides of the aisle are puppets for the huge, conglomerate corporations who, without any regulation, are free to outsource jobs to India and elsewhere, where labor is cheap, in order to make, not just a profit, but HUGE profit! But do the "workers" in those corporations benefit? No! Only the top tier and the shareholders benefit, while many workers are laid-off, offered part-time jobs only, or end up doing 2 and 3 people's jobs all in order to fatten the bankrolls of the corporate elite. Capitalism is a good thing; it is the vehicle for the American Dream. But allowing the new "Robber Barons" of the elite (individuals and the "new" people - the "corporate people") to make themselves more wealthy by the hour, is not capitalism. They hold the cards, they pull the puppet strings, and they are killing our country. Period.

Since the start of 2008, 66 retail unions have failed, compared with more than 290 banks or savings institutions. Besides, I belong to Educators Credit Union, which received NO bailout money.

Not really. One could always invest in funds that don't include shares of the large banking institutions. No one desires an end to Wall Street or the stocks and bonds it trades -- just the practices that lead to bubbles and busts. The big investors can ride those out -- in fact a dip is a good buy opportunity if you know what might be coming and have gone to cash in time.

I like banks to be profitable -- just not obscenely profitable, which means charging depositors a fee for the privilege of their lending our money out to other people.

What ever the return on the IRAs, many of which tanked a few years back due to the mischief on Wall Street, it doesn't justify the obscene salaries and bonuses. On top of the that, now we have grateful banks looking to increase fees.

Banks make money via interest. When the prime rate is low, they don't make as much money on their loans, so they do stuff like you're seeing now to make up the difference. They have to pay the bills just like everyone else, so it shouldn't really surprise anyone that fees go up or are added or that they charge higher rates where they can. It shouldn't really surprise anyone that they're not as free as they were in the past in terms of making loans either. That's a good part of what got them in the trouble they were in when they were bailed out. Those derivatives they packaged really weren't a major problem until the high risk mortgages that were part of them started defaulting. And since we stupidly didn't put any kind of conditions on the bailouts, anything that falls outside of normal operating procedure (big bonuses, for instance) should be expected. No lesson was learned as, perhaps, it would have been had they been allowed to fail. Then again, if we're complaining because more high risk loans aren't being made, we haven't learned much either.

That's another reason why if you just look at the banks alone, you're missing part of the picture.

You always have an alternative to the bank you're with if they become unreasonable. If you're diametrically opposed to paying any fees whatsoever and can't find an institution that suits you (particularly in light of the current interest rates), there's always the mattress.

Why is charging 20% interest on credit cards necessarily greed?

What profit margins are the banks running? If they aren't making money off of mortgage interest, they have to make money from other sources like credit card interest, don't they?

Credit card debt is unsecured. Want cheaper money, walk in the front door of the bank, financial statements in hand. Oh, and some assets to secure the loan too. Currently 15 year mortgages are way under 4%.

If you don't like the game, you don't have to play. Don't have a credit card, or if you do, use it only to the point where you can pay the balance off monthly.

Nobody's forcing anyone to have cards.

Thanks, Nick - great writing, too!

I agree with Mary - enough with all the name-calling - let's be respectful, we are all citizens with views usually based on our personal experiences in life. It's not even enjoyable to read these posts when they are so vicious. Name-calling simply shows that a person has nothing of value to say.

It really doesn't speak well for the validity of your views if the best you can come up with is to call those who disagree with you childish or stupid.

Especially Bob when you call people stupid when your ideas have worked no where, no time. Did I mention no how?

Let's be honest. As JK Galbraith once pointed out, right wing "philosophies" are in place to provide packaging for greed.

Of course we could hardly refer to Steve as intellectual.

I agree with you wholeheartedly. Pointing fingers is not going to be effective, as well as who did what to who. We have a problem. It started after the towers fell. Bad decisions were made. Good decisions were made. People need to put this aside and deal with what needs to be done NOW. From this point forward. Every one of the politicians should be contributing to this problem - not pointing fingers. But what is happening in this world - who did what to who - is not productive. It creates anger, stubborness, envy, and we all want to blame someone for this mess. I agree patchreader 123 - both parties are to blame. BTW - when did people start blaming Presidents for all the problems. We have a WHOLE package here. Most times when we had a Republican President, we had a democratic majority in the background. When we had a Democratic President, we had a republican majority in the background. Putting the blame on someone is what we do when we can't contribute to the solution. That would be like blaming Eve for eating that apple, then every woman after that is not to be trusted. It doesn't resolve problems, it continues to keep us angry.

I think the gist of the article is that we need to get the big money out of politics so that we have leaders and legislators who aren't beholden to a small group who got them elected to serve their interests. That goes for both sides of the aisle. Free Trade and deregulation of the financial markets has been great for business, but not so great for the rest of the population.

It isn't necessarily finger-pointing to criticize one side or the other's proposals on the basis that it worked very poorly before, so why expect a different result this time?

But then it crashed and the banks were left holding the bag - some more than others. And the fed pushed TARP on all of them, especially the big ones. The big ones repaid their TARP money within a couple years and the fed made money off those loans. But now the banks are reluctant to lend again except to those who pose a safe credit risk. And who can blame them? Look at what happened last time. Nobody's going to fall for 'AAA' rated investment derivatives made up of crap again. And nobody wants to be the one holding the bag again. Makes sense, doesn't it?

But why blame the banks? Do you really think that they wanted people to start defaulting on their mortgages? Sure, some of the investment firms did by hedging against their own derivatives and purchasing credit-default swaps, but not the commercial banks that are being vilified in this article. Do you really think that Dick Fuld wanted to be the man who brought down Lehman Brothers in a totally disgraceful fashion? Do you really think that the banks wanted to create an artificial oversupply of housing which caused one of the largest devaluation in American real estate in history? Remember, a mortgage is considered a ‘secured’ loan because banks believed that they would be able to get their principle back at a minimum in cases of default. But with prices tanking, the banks now lose out on full principle recovery upon default. None of this is/was good for banks either.

So again, why blame the banks? If borrowers hadn’t defaulted, none of this would have happened! So blame the dead beat borrowers. Blame the ratings agencies for tricking people into thinking that crap backed securities were a good investment. Blame the government and the GSE’s for pushing lending standards so low. Don’t all these other sources of the problem deserve blame before we start on the banks?