burning down the street
Wall Street has made big bucks over the past 20 years packaging different debts and assets into increasingly complicated financial innovations. And the leaders of Wall Street have made HUGE bucks doing so. They are verily the self-proclaimed "Masters of the Universe," the heroes of capitalism who want the government to leave them alone to do their financial wizardry and make big bucks for themselves and for the investors. (Often to the detriment of the real economy, i.e. the people who make and buy and sell things and provide (real) services.)
Except when their stuff - like securities based on sub-prime mortgages - begin to go bad. Then, they want the Fed to slash rates to zero if necessary and won't be above accepting a federal bailout lest some highly-leveraged Wall Street financial firm go belly-up.
In a great column today, Post business columnist Steven Pearlstein resists the "responsible" take of stabilizing these financial firms to prevent a recession. Instead, Pearlstein bemoans the rise of these masters and their arcane instruments, notes that their huge compensation packages grossly outweigh their own personal financial risk-taking, bemoans the fact that nowadays half the students of top US universities want to go into this sort of business, instead of becoming scientists or doctors or academics or public service.
You should read Pearlstein's column - but if you don't have time, I agree heartily with his conclusion:
So I hope you'll forgive me, dear readers, when I say that the best thing that could happen to our economy is for a dozen high-profile hedge funds to collapse; for investment banking to enter a long, deep freeze; for a major bank to fail; and for the price of a typical Park Avenue duplex to fall by 30 percent. For only then might we finally stop genuflecting before the altar of unregulated financial markets and insist that Wall Street serve the interest of Main Street, rather than the other way around.
Yes, I know it's harsh and vengeful solution, and there will be lots of collateral damage. But as I look out over the destruction sweeping across the financial sector, I just can't silence the small voice in my head that keeps repeating that old '60s expression, "Burn, baby, burn."
(Pardon the strange formatting - blogger is being weirdly uncooperative today.)