But what's really going on? Is the government serious about rooting out corruption in finance? If so, lots more charges (and indictments) need to follow. This humorous post on The Exiled illustrates why that can't, and won't ever happen. Quote:
..the POTUS dropped this bombshell: “The only people who ought to fear the kind of oversight and transparency that we’re proposing are those whose conduct will fail this scrutiny.”
The Big Secret, of course, is that every living creature within a 100-mile radius of Cooper Union would fail “this scrutiny”—or that scrutiny, or any scrutiny, period. Not just in a 100-mile radius, but wherever there are still signs of economic life beating in these 50 United States, the mere whiff of scrutiny would work like nerve gas on what’s left of the economy. Because in the 21st century, fraud is as American as baseball, apple pie and Chevrolet Volts—fraud’s all we got left, Doc. Scare off the fraud with Obama’s “scrutiny,” and the entire pyramid scheme collapses in a heap of smoldering savings accounts.
It is the same-old Too Big To Fail argument that we've heard for two years, and unfortunately accurate. Our economy, multiple economies actually, if you count the the financial economy, the consumer economy, the (horribly compromised) health care economy, whatever, are all ponzi schemes, stacked and nested. It is all both Too Big To Fail and a House Of Cards at the same time. That's a very poor combination, obviously.
To get back to my hypothetical question, no, I don't think the government is serious about cleaning up the Street. They need Wall Street as much or more than anyone. America is is deep shit financially and is making desperate deals with the Federal Reserve (i.e. quantitative easing) to stay afloat. The Federal Reserve is just the biggest of the big fish on wall street. What Obama really fears is the another bank, such as Goldman, will become more powerful than the Fed. Then the government loses all control, loses the ability to say which bank must marry which bank (like a Mob godfather?), or which bank lives and which bank gets eaten, etc. They need Wall Street for all sorts of covert ops:
- manipulating commodity prices
- keeping the stock market propped up (the Plunge Protection Team)
- paying for foreign adventures
- playing the benevolent/malevolent god to obstreperous congressional districts
- most of all, keeping interest rates low
Goldman is getting hauled out and whipped because they are too big, too arrogant, too profitable and too powerful. It has nothing to do with fraud.
Obama's just trying to establish dominance.