Robert Reich: Why Obama Must Take On Wall Street

It has been more than a year since all hell broke loose on Wall Street and, remarkably, almost nothing has been done to prevent all hell from breaking loose again.

In fact, close your eyes and you could be back in the wilds of 2007. Bankers are still making wild bets, still devising new derivatives, still piling on debt. The big banks have access to money almost as cheaply as in 2007, courtesy of the Fed, so bank profits are up and bonuses as generous as at the height of the boom.

The only difference is that now the Street's biggest banks know they are "too big to fail" and will be bailed out by taxpayers if they get into trouble -- which means they have every incentive to make even riskier bets. And, of course, American taxpayers are out some $120 billion, while millions have lost their homes, jobs and savings.

All could be forgiven if the House and Senate committees with responsibility for coming up with new regulations were about to come down hard on the Street and if the Obama administration were pushing them to. But nothing of the sort is happening. Yes, the White House has indicated interest in charging banks for the cost of the bailout, but this is not real reform; it's just making up for some of the direct costs of cleaning up the mess.

...Money is powerful. Talk is cheap. Mr Obama recently called the top bankers "fat cats", and the bankers insisted they were shocked -- shocked! -- to learn how intransigent their lobbyists had been in opposing financial reform. The bankers even claimed a "disconnect" between their intentions and their lobbyists' actions. This was all for the cameras, of course.

But the widening gulf between Wall Street and Main Street -- a big bail-out for the former, unemployment checks for the latter; high profits and giant bonuses for the former, job and wage losses for the latter; buoyant expectations of the former, deep anxiety and cynicism by the latter; ever fancier estates for denizens of the former, mortgage foreclosures for the rest -- is dangerous. Americans went ballistic early last summer when AIG executives got big bonuses after taxpayers had bailed them out.

They will not be happy when Wall Street hands out billions in bonuses very soon. Angry populism lurks just beneath the surface of two-party politics in America. Just listen to Sarah Palin or her counterparts on American talk radio and yell television. Over the long term, the political stakes in reforming Wall Street are as high as the economic.

More: http://www.huffingtonpost.com/robert-reich/why-obama-must-take-on-wa_b_422071.html

No heavy lifting for this President.

Robert Reich, in his last paragraph sums it up nicely. I thought I would put it in bullet form. I'll list Wall Street 1st because we all know that's what our federal government would do.

Wall Street got: 1. Trillions of dollars in direct and indirect bailouts by our federal government. 2. Billions of dollars in higher profits and bigger bonuses thanks to the bailouts. 3. Continued opportunity for more and more profits, bigger and bigger bonuses. 4.Massive estates and over priced luxury vehicles.

Main Street got: 1. Talk, lots of talk about change by our federal government. 2. Decreasing wages and salaries and huge unemployment rate. 3. Continued job losses, abandon communities, empty downtowns, belt tightening, food pantries, unemployment checks, gas price increases, food stamps, a few hundred dollars back from taxes paid out, and more talk. 4. Bankruptcy, foreclosure, and cash for clunkers.

Now compare the 2. Is it fair? Is it equitable? Is it what America stands for?

Should be an interesting test of the President's mettle.

After seeing how the Democrats "took on" the health care industry. They took them on like a whore takes on a John.