Excuse the light posting: I’ve been on vacation this week. But if you ignore Matt Taibbi’s hysterical prose you’ll actually get the best breakdown (yes, pun intended) of what’s happened between Wall Street, the Fed, and Congress in the last ten years, and it’s truly frightening. The abdication of Congressional regulatory power, cronyism, and concentration of power in the hands of a few men in pinstriped suits — all here:

When one considers the comparatively extensive system of congressional checks and balances that goes into the spending of every dollar in the budget via the normal appropriations process, what’s happening in the Fed amounts to something truly revolutionary — a kind of shadow government with a budget many times the size of the normal federal outlay, administered dictatorially by one man, Fed chairman Ben Bernanke. “We spend hours and hours and hours arguing over $10 million amendments on the floor of the Senate, but there has been no discussion about who has been receiving this $3 trillion,” says Sen. Bernie Sanders. “It is beyond comprehension.”

As for AIG:

In essence, Paulson and his cronies turned the federal government into one gigantic, half-opaque holding company, one whose balance sheet includes the world’s most appallingly large and risky hedge fund, a controlling stake in a dying insurance giant, huge investments in a group of teetering megabanks, and shares here and there in various auto-finance companies, student loans, and other failing businesses. Like AIG, this new federal holding company is a firm that has no mechanism for auditing itself and is run by leaders who have very little grasp of the daily operations of its disparate subsidiary operations.

In other words, it’s AIG’s rip-roaringly shitty business model writ almost inconceivably massive — to echo Geithner, a huge, complex global company attached to a very complicated investment bank/hedge fund that’s been allowed to build up without adult supervision.

2 thoughts on “

  1. “But if you ignore Matt Taibbi’s hysterical prose”

    well that’s the real trick isn’t it

    i tried to read this thing but the rip-roaringly shitty misinterpretation of hunter s thompson’s style foiled me AGAIN

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