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They’re back. Actually, they never left, they just laid low while the heat of political anger blew over.
They are the schemers and scammers of Wall Street who devised the Phantasmagoric Money-From-Nothing Good Times Machine that was fueled by indecipherable derivatives and other financial fairy dust. If you’re presently stuck in hard economic times, you have them to thank, for it was their hocus-pocus that – poof! –imploded our economy in 2008.
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Responding to public outrage, President Obama and the Democratic Congress passed a reform bill last year that tightened the rules on these tricksters. But now – with Wall-Street hugging Republicans running the House and Obama himself turning Wall Street friendly – the schemers and scammers are demanding that Washington loosen those pesky rules so they can restart that Good Times Machine for their own fun and profit.
For example, the biggest banks are pressing hard for the Treasury Department to exempt a derivatives game called “foreign-exchange swaps” from any regulation. These gambles on the ups and downs of foreign currencies are not only risky, they’re massive, with some $4 trillion being bet on them every day. A hiccup in this speculative game can ruin the day of a whole country. But a handful of Wall Street giants rake in about $9 billion a year handling these high-rolling bets, and they don’t want the public even seeing what they’re doing. “Don’t regulate us,” they say, “trust us.” They assert that the currency game is the one derivatives market that did not crash in 2008.
Not so fast, slick. The only reason it didn’t crash is that the Federal Reserve poured more than $5 trillion into foreign central banks that year to prop it up. To keep up with these tricksters, check out Americans For Financial Reform: www.ourfinancialsecurity.org .
“Note to Banks: It’s not 2006 Anymore,” The New York Times, March 27, 2011.