In 2007, a credit crisis centred in the US subprime market began. It metastasised into a monstrosity of epic proportions that led to the worst and only synchronized global downturn since the Great Depression three-quarters of a century ago. The result was a massive bailout of the largest financial institutions in America and around the globe.
Incongruously, Wall Street has quickly returned to business as usual, handing out record bonuses and resuming their leveraged bets in global markets which is the lions share of profits in firms like Goldman Sachs. Meanwhile, in the US employment as calculated is near 10%, and underemployment is near 17%. Foreclosures are at a record high.
Clearly, there is something seriously wrong with this juxtaposition and politicians know this. This is one reason Goldman Sachs executives were lambasted in yesterday’s Senate subcommittee hearings. Senators wanted Americans to see their righteous indignation on Television so that, when polling time comes in November, Americans will know who is fighting for them.
Yet, I can’t help but notice that financial reform is having a very difficult time making it through Congress. Are the Senators talking the talk? Yes. Are they walking the walk though? Clearly, no. My suggestion is you watch who votes for financial reform and send a message by voting or not voting accordingly in November. Forget about the Goldman hearings. It is a dog and pony show. So much bread and circuses for the unwashed masses.
Below is what I had to say about them on the BBC yesterday night.