That’s a crony system for you. The banks (and the bankers) with access to the Federal Reserve, which are now officially “too big to fail” and so enjoy an explicit license for moral hazard have only gotten richer. We the people “recapitalized” the banks. We indemnified them. We made them whole even though most of the big banks had leveraged themselves out to stupid levels and so deserved to go down. But the banks had the connections and so they now sit fat and happy.
Same for the car companies and lots of other big vested interests. They had connections in the Obama White House and in other parts of Washington so they were saved.
Meanwhile as the hapless titans were being rescued millions of Americans lost their houses and their jobs. 6 years later, for many, they haven’t come back.
This is what one can expect in a government centered, crony economy. It truly is who you know, not who you can outwork, outwit, and out innovate. It’s a third world game and it is a dangerous game. Just ask nearly anyone in Argentina, a country once wealthier than the USA but which descended into statist cronyism and relative poverty.
(From The Guardian)
The ultra-rich so backed the president that, at his first inaugural, noted one sympathetic chronicler, the biggest problem for donors was finding parking space for their private jets. Since then, despite occasional flights of populist rhetoric, the president has kept close ties with top financial firms, including the well-connected Jamie Dimon, chairman of JP Morgan, often called Obama’s “favourite banker”. He appears to have been instrumental in getting Democrats to support the recent loosening of financial controls on big banks.
These Wall Street connections have continued to play dividends for the president, in terms of contributions. The financiers benefited from Obama’s choice of financial managers, such as former treasury secretary Tim Geithner, widely known as a reliable ally of the financial sector. (He liked to explain his support by equating its importance to that of the technology and manufacturing industries.) To no sensible person’s surprise, Geithner, when he left the Treasury last winter, found his reward by joining a large private equity firm. (By way of completing the circle, Geithner’s successor, Jacob Lew, used to work for Citibank.)