After a Year Long Perfect Storm, Wall Street is Back to its Old Tricks
No one likes to get bad news after well, a lot of bad news, but that’s exactly what the New York Times has been splashing all over its front page. It would have taken a lot to sugar-coat it, so the Times gave it to us straight: after a year-long perfect storm Wall Street is up to its old tricks:
Backstopped by huge federal guarantees, the biggest banks have restructured only around the edges. Employment in the industry has fallen just 8 percent since last September. Only a handful of big hedge funds have closed. Pay is already returning to precrash levels, topped by the 30,000 employees of Goldman Sachs, who are on track to earn an average of $700,000 this year. Nor are major pay cuts likely, according to a report last week from J.P. Morgan Securities. Executives at most big banks have kept their jobs. Financial stocks have soared since their winter lows.
Unsurprisingly, the article goes on to say that the government is to blame for the majority of this, the voting public is to blame, and that, in turn, the American taxpayer will bear the brunt of the burden:
So investors will lend money to the financial industry on easy terms. In turn, financial institutions will use that cheap money to make risky loans and trades. The banks will keep the profits when their bets pay off, while taxpayers will swallow the losses when the bets go
Indeed, Wall Street lives on.
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