Contemporary Economics in a Nutshell: Felonious Instincts Rewarded by Reverse Robin-Hoodism

Jeffrey St. Clair, AIG and the System: The Masters of Perfidy :

In a sense, it’s only fitting that the government ended up as the ultimate guarantor for those furious seasons of Wall Street greed. After all, by consciously dismantling the regulatory framework that tended to constrain the felonious instincts that come naturally to the Wall Street player (such as the Glass-Steagall Act), the government played a decisive role in fostering the rampant financial criminality and looting that reached its apogee in 2008, crashing the global economy, draining retirement funds and pension accounts and casting millions from their homes and millions more into the perdition of long-term unemployment. All of this coming down in an era of extreme government austerity, typified by over-burdened and underfunded social welfare programs. As with the defunct regulations to restrain corporate crimes, so too had the economic safety net been sheared away--its tethers sliced by Reagan, the Bushes and Clinton—long before the economy cratered. Now there is nothing to cushion the blow on the long fall to the bottom.

The architects of this economic deregulation achieved a truly fearful bi-partisan symmetry that persists to this day. Even now, amid the rubble of Wall Street’s collapse, the neo-liberals and neo-conservatives remain as uniform as conjoined twins in their devotion to a broadly deregulated market. Any talk of bringing back forceful correctives such as a new and improved Glass-Steagall Act was immediately squelched by Obama, flanked by John McCain and Mitch McConnell, as well. If the crash of AIG—the largest in history—was in the sclerotic parlance of the times a “teachable moment” it is apparent that while much was ventured, nothing was learned.

The problem is that the government bailout, which some accounts now estimate will eventually top $24-cap T-for Trillion—flowed almost entirely in the wrong direction. Instead of helping to mend the lives of Wall Street’s victims—the unemployed, the uninsured, the destitute and homeless—Bush and Obama rewarded the perpetrators. They even gave them bonuses.

...consciously dismantling the regulatory framework that tended to constrain the felonious instincts that come naturally to the Wall Street player...
that is so well said!