WaPo points out that data gathered shows that Wall Street firms — independent companies and the securities-trading arms of banks — have earned more in the first 2 1/2 years of the Obama administration than they did during the eight years of the George W. Bush administration. Why is this happening?
Behind this turnaround, in significant measure, are government policies that helped the financial sector avert collapse and then gave financial firms huge benefits on the path to recovery. For example, the federal government invested hundreds of billions of taxpayer dollars in banks — low-cost money that the firms used for high-yielding investments on which they made big profits.
Stabilizing the financial system was considered necessary to prevent an even deeper economic recession. But some critics say the Bush administration, which first moved to bail out Wall Street, and the Obama administration, which ultimately stabilized it, took a far less aggressive approach to helping the American people.
That bolded section is pretty-speak, a bullshit attempt to soften the real problem because it doesn’t favor the leftists big-nanny-staters, for the Frank-Dodd bill was written in such a way that those kissing the right people in government’s asses and paying them off with enough lucre in the form of campaign contributions then could not just get oodles of tax payer money, but also make a veritable killing. And the fools keep blaming the banks and capitalism. In the mean time the crony capitalists are raking in money while those that claim to be the 99 percent rail at the wrong people.
“There’s a very popular conception out there that the bailout was done with a tremendous amount of firepower and focus on saving the largest Wall Street institutions but with very little regard for Main Street,” said Neil Barofsky, the former federal watchdog for the Troubled Assets Relief Program, or TARP, the $700 billion fund used to bail out banks. “That’s actually a very accurate description of what happened.”
Neither the Bush administration nor the Obama administration, for instance, compelled banks to increase lending to consumers, known as “prime borrowers.” Such a step might have spurred spending and growth, although generating demand for loans may have proved difficult in the downturn.
Right, because as we saw before, “compelling” banks to do things, like lending money to people that were so high risk that a default was a “when” not an “if”, never ends badly. These fuckwads miss the point: both TARP and the Dodd-Frank bill were about increasing the power of the political class. And tax payers paid for it.
A recent study by two professors at the University of Michigan found that banks did not significantly increase lending after being bailed out. Rather, they used taxpayer money, in part, to invest in risky securities that profited from short-term price movements. The study found that bailed-out banks increased their investment returns by nearly 10 percent as a result.
Guess which bill gave them permission to do this kind of investments? And which bill required banks to keep an inordinately large amount of cash on hand rather than do anything with it too, leading to less lending amongst things. Which one added a massive layer of bureaucracy & costs, while cutting their profits? And which one is now going to cause more trouble. Don’t:
Some of Wall Street’s success has moderated in recent months, with bank stock prices down and layoffs on the rise. This mostly has reflected the renewed slowdown in the U.S. economy this year and the European debt crisis buffeting global markets.
Representatives of the financial industry say regulations in last year’s Dodd-Frank legislation, which Obama pushed for and signed, also have crimped bank profits. But many analysts think the law will make the financial system more stable. The legislation, for instance, requires banks to maintain a greater capital cushion to withstand losses during bad economic times. The measure also created a regulator whose sole purpose is to police lending to ordinary Americans.
Stable indeed. Less loans, and loans are risky in a collapsing economy, are sure to make the lending industry more stable. Less profits means the consumer pays more for services that before might even have been labeled “free”. And there are far more regulations yet to come which all will have onerous effects and create special needs to go beg politicians for exclusions/exceptions. For the right price, of course. But don’t lose focus. The point is these guys are making a killing right now under Team Obama’s rules.
Compensation at these firms also has bounced back. Financial firms paid about $20.8 billion in bonuses for work done in 2010, according to research by the New York state comptroller. In New York City, the average Wall Street salary last year grew 16.1 percent, to $361,330, which is more than five times the average salary of a private-sector worker in the city.
By contrast, millions of Americans continue to face economic difficulties. That is fueling broad public anger at Wall Street and has given rise to the “Occupy” protest movements nationwide.
And yet, it is these very crooks that are helping Wall Street rake in the money, for a nice cushy fee, that now pretend they are standing firm against Wall Street raking in all that money. And the morons are all falling for it. Helps to have outlets like WaPo fluff up the facts – Wall Street has made more money thanks to Obama in 2 ½ years than they did the previous 8 under evil BoosChimpyMcHitler – like they did in this bullshit piece. The data doesn’t lie though: the rich fat cats are making out better under Obama than they did under Bush, and they are doing it in a down economy. And the rest of us are hurting worse and being told to pony up more money. No amount of smoke can hide that.