How Wall Street Devoured the Recovery

http://www.huffingtonpost.com/les-leopold/how-wall-street-devoured_b_3960271.html

The odds are that we in the bottom 99 percent will never recover. That's because our nation has evolved into something entirely new: a billionaire bailout society. When I first used that phrase in 2009 at a presentation in Los Angeles I could feel the audience squirm. Surely I was exaggerating. Surely, I was just using a rhetorical flourish to stress income inequality. Surely cooler heads would prevail rather than my hot one. Oh, do I wish it were so.

But now we see in vivid detail what the new American order looks like. The top one percent live in another economic universe of high finance that sucks the wealth from the rest of us. In their world, banks (owned by and for the top 1 percent) are able to grow larger and larger so that there is no chance that they will be allowed to fail, even after these same banks took down the economy. (In 1965 they had assets equal to 17 percent percent of the U.S. economy. Today it's more than 65 percent percent.)

Free from any meaningful controls, financial gambling (called proprietary trading in polite circles) is now the dominant activity within our largest banks. In fact, in these too-big-to-fail banks, more money goes to financial gambling than goes to loans to businesses and consumers. These are not banks. Rather they are rigged casinos for the rich. The upside from these corrupt pursuits are kept by the top fraction of the one percent, while the 99 percent hold the bag when those phony bets crash the economy. And who among us doesn't think that will happen again?

Regulation is hapless as billions of dollars slosh through the political troughs. Serious enforcement is virtually non-existent because the enforcers fear that the entire financial system will fail should these criminal banks be prosecuted. Every national policy from the bailouts to "quantitative easing" has further funneled money to the super-rich. Meanwhile, the rest of us are told to plod along until jobs miraculously appear and our incomes finally rise. Dream on.